Having lived in the Midlands for over 50 years, I regard Aston Villa as the leading regional club, a status that has gone from aspiration to fulfillment. My chiropodist is a keen season ticket holder so we always discuss the club’s progress.
Here I rely on the latest assessment by the Swiss Ramble of the
club’s 2024/25 accounts. He has an unrivalled
data set and forensic financial skills which he applies from his Zurich
base. Read more on his Substack page.
This has the makings of another fine season for Aston Villa,
as they on course for fourth place in the Premier League, while they have
guaranteed their qualification for the Champions League.
In addition, they could get their hands on some silverware
by winning the Europa League, as they are favourites to beat German side
Freiburg in this week’s final in Istanbul.
It bears remembering how far Villa have progressed under
owners Nassef Sawiris and Wes Edens, who bought the club in July 2018. They have invested big money in order to
compete with the traditional elite, which is reflected in the club’s
financials, but in addition it “has made significant progress against its
stated objective of delivering sustainable improvement on and off the pitch.”
However, Villa have had to contend with restrictions imposed
by PSR, which represent a major challenge for aspirational clubs. Arguably, Villa have been victims of their
own success, as qualification for Europe brings with it the need to comply with
UEFA’s financial regulations, which are much tougher than those applied in the
Premier league.
As per the accounts, things look pretty good, as Villa swung
from an £86m pre-tax loss to a £17m profit, with revenue shooting up £102m
(37%) from £276m to a club record £378m, though profit on player sales fell by
£13m (20%) from £65m to £52m. This was
offset by steep cost growth, as operating expenses rose £92m (22%) from £426m
to £518m, while net interest payable was up £3.6m (66%) from £5.3m to £8.9m.
However, the year-on-year improvement was entirely due to
the £114m profit they made on the disposal of a couple of investments to
another group company, namely the women’s team and the operating rights to The
Warehouse property.
Record revenue streams
All three main revenue streams set new club records, mainly
thanks to more success on the pitch, including participation in the Champions
League. Broadcasting was the star of the
show, rising £57m (31%) from £184m to £241m, but there was also good growth in
the other revenue streams. Commercial increased by £31m (52%) from £60m to
£91m, while gate receipts rose £10m (37%) from £28m to £38m.
In recent years Villa have stepped on the gas with player
trading, which has become a necessary evil in a PSR world. As a result, they
have made a substantial £237m in the last four seasons, which is almost nine
times as much as the £27m in the preceding 4-year period.
In absolute terms, Villa’s £200m revenue growth in the last
three years has only been outpaced by Arsenal £321m, while their 112% increase
was actually the best in the Premier League, comfortably ahead of Arsenal 87%
and Newcastle United 86%.
Following this significant growth, Villa’s £378m revenue is now seventh highest in the Premier League, though they are still a fair way behind the Big Six. Indeed, four of those clubs generate around £300m more than Villa, led by Liverpool £703m, Manchester City £604m, Arsenal £690m and Manchester United £667m.
Villa received €83.7m after reaching the quarter-finals of
the Champions League, before losing to Paris Saint-Germain. This compromised
€18.6m participation fee, €45.2m prize money and €19.8m value pillar (the
replacement for the TV pool and UEFA coefficient).
This season Villa have already earned €35.2m after reaching
the Europa League final, made up of participation fee €4.3m, prize money €22.0m
and value pillar €8.9m. If they do manage to win the trophy, they would earn
another €6.0m plus €4.0m for making the UEFA Super Cup.
Villa have suffered from having a much smaller stadium than
most of their competitors with Villa Park’s capacity being only 42,657. There
have been various proposals on increasing this over the last few years, but
they have all come to nothing, due to issues largely relating to the
surrounding infrastructure.
Villa’s wage bill increased £21m (8%) from £252m to £273m,
which means that this has almost doubled in just three years.
Shillings in the meter?
There was a colossal increase in Villa’s other expenses,
which surged £57m (80%) from £71m to £128m.
Most fans will overlook this cost category, focusing on wages and
transfers, but this has become an increasingly important factor for football
clubs. In fact, it has more than tripled at Villa in the last three years. Like other clubs, they had to cope with the
inflationary impact on a number of services, especially utilities, but this
growth still seems pretty extraordinary.
To underline how big an issue this is for Villa, their other
expenses accounted for 34% of turnover, the second highest in the Premier
League, only surpassed by Tottenham’s 36%.
Villa spent £162m on player purchases in 2024/25, around the
same level as the previous season, which the club said was needed “to remain
competitive”. This was the fifth
highest in the Premier League, but only around half of the top three clubs,
namely Manchester City £353m, Manchester United £343m and Chelsea £305m.
Debt and owner funding
Villa’s gross financial debt more than doubled from £69m to
£146m, driven by a steep £91m increase in external debt from £20m to £111m. They repaid a £20m overdraft, but drew down
£78m from a £100m revolving facility and added a £33m loan, factored on
receivables, both taken out with Goldman Sachs.
Sawiris and Edens have significantly increased the club’s
investment in facilities, adding up to £139m in the last seven years, which is
around ten times as much as the £14m in the preceding 7-year period. As well as hospitality renovation at Villa
Park, a lot has been spent on the Bodymoor Heath training ground, including a
hotel for players and staff, new pitches and improving facilities for the
academy and women’s team, plus investments in new retail stores.
There is little doubt that Sawiris and Edens have “put their
money where their mouth is”, as the owners have injected nearly £700m of
capital in the seven years since their arrival, including £94m last season.
That means that they have stumped up £366m in the last three years alone. The previous owners were not exactly
slouches, though their funding was a lot lower at £177m in the 7-year period
between 2012 and 2018.
The Swiss Ramble concludes: ‘Their operating losses of
around £140m in each of the last three seasons is a better representation of
the club’s financial position than booked profit, though UEFA’s sanctions for
breaching their PSR regulations had already provided a fairly strong indication
of their issues.
The financial challenge remains, despite Villa setting a big
new club record for revenue, not far short of £400m, after they grew this at a
faster rate than any other club in the Premier League. The losses are symptomatic of the investment
required for a club aspiring to challenge the leading clubs, due to to funding
investment in the squad. In Villa’s case, this has helped drive strong
improvement on the pitch, leading to qualification for the Champions League and
a possible victory in the Europa League.’
Comments
Post a Comment