Villa lose £370m in a decade

The authoritative Swiss Ramble has provided an analysis of the recently published accounts of Aston Villa. Losses increased by £21m from £15m to £36m, as revenue dropped £5m (7%) from £74m to £69m and profit on player sales fell £11m from £27m to £16m. On the other hand, the club received £3m compensation for HS2 rail project, which will go through part of the training ground.

The £5m revenue fall was mainly due to a £7m lower parachute payment, which meant broadcasting was £7.7m (16%) lower at £40.3m. This was offset by increases in gate receipts, up £1.1m (10%) to £11.8m; commercial, up £0.3m (2%) to £13.4m; and player loans, up £1.1m to £3.0m.

Revenue has fallen £48m (41%) from the £117m peak in the 13/14 Premier League to £69m. It is worth noting the importance of parachute payments, down from £41m to £34m, though still half of total revenue in 17/18. These will further fall this season to £17m, then stop in 19/20. Despite the decrease, Villa's £69m revenue is the highest in the Championship, ahead of Boro £62m and Norwich City, though may be overtaken by Sunderland when they publish their 2017/18 accounts.

Almost all Championship clubs lose money, but Villa's £36m loss is one of the largest of those that have reported to date in 2017/18, around the same level as Birmingham City £37m and QPR £38m.

Villa have consistently lost money with £370m total losses posted in the last 10 years. Incredibly, last season’s £36m loss is only the 5th largest in this period. As former Finance Director Mark Ansell said, 'Villa have gone to the casino, rolled the dice and it hasn’t worked.'

Profit on player sales fell from £27m to £16m, including Amavi, Veretout, Baker, Sanchez and Bacuna. This is still pretty good, but a fair bit lower than the large profits clubs recently relegated from the Premier League made from this activity, e.g., Norwich City £48m.

Villa have increasingly relied on player sales in the last three seasons, averaging £26m annual profit, compared to just £1m in the previous three seasons. Excluding player sales, the 17/18 loss would have been even higher at £52m. Will be much lower in 18/19 (Gollini, Gil and Traoré sell-on).

Villa have booked £109m of exceptional expenses since 2011: £23m to sacked managers (many years), £41m reducing the value of poor player purchases and £45m writing-down the value of Villa Park (2016).

Gate receipts rose 10% (£1.1m) from £10.7m to £11.8m, thanks to reaching the play-offs and staging 3 more domestic Cup games. This is the highest in the Championship, around 20% more than the closest challengers such as Norwich City and Sheffield Wednesday. Average attendances have held up quite well in the Championship, falling just 5% from 33,690 to 32,097. Villa’s crowds have been steadily declining, down 20% (8,000) from the recent high of 40,000 in 2008, but they are nearly 10% higher this season at around 35,000.

Commercial revenue should increase in 2018/19 with new deals: 32Red will be the new shirt sponsor, replacing Unibet, whose logo will feature on training wear; while Under Armour will be replaced as kit supplier by a partnership between Fanatics and Luke 1977.

The wage bill rose by £12m (19%) from £61m to £73m, due to the arrival of John Terry and numerous expensive loans, with players, managers and coaches increasing from 175 to 184. As a consequence, wages to turnover ratio worsened from 83% to 107%. This well above the UEFA recommended level of 70%, but is not unusual in the Championship. Half the clubs have a ratio over 100%. Even so, the £73m wage bill is by far the highest in the Championship, around 50% more than the next highest, even though two of those (Wolves £51m and Cardiff City £48m) included substantial promotion bonuses.

Gross debt has been slashed from £50m to just £6m, as the new owners repaid £48m of old loans, leaving £1m loan notes plus £5m other loans. Debt has greatly reduced from £190m high in 2013 following £90m loan waiver and £89m conversion into equity.