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Villa face £45m FFP shortfall

The authoritative Swiss Ramble has taken a look at Aston Villa's financial fair play position. The conclusion is that they will be fine for 2017/18, but will need to take action to meet the 2018/19 target.

FFP is assessed over a three-year period (current season plus previous two seasons). The annual allowable loss is £13m in Championship and £35m in Premier League, so Villa's maximum FFP losses are £83m in 2016/17, £61m in 2017/18 and £39m from 2018/19.

One point that should be noted is that FFP losses are different from losses in the accounts, so Aston Villa can exclude around £11m a year (for academy £5.9m, community £2.0m and infrastructure £2.9m) plus once-off stadium revaluation (booked as £45m impairment in 2015/16).

The Swiss Ramble notes, 'In this way, I’ve calculated that Aston Villa were £38m below FFP limit of £83m in 2016/17.'

So Aston Villa 2017/18 loss before tax is estimated at £37m, i.e. £22m worse than 2016/17. After excluding £78m (FFP deductions £33m plus stadium impairment £45m), the total FFP loss for 3-year monitoring period would be £55m, i.e. £6m below 2017/18 FFP limit of £61m.

For 2018/19, Villa's parachute payment falls from £34m to £17m. If we assume no other changes and zero profit on player sales, we can see how much money Villa need to find to meet FFP limit of £39m. The shortfall is £45m, which must be made up by cuts in wage bill or player sales.

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