Aston Villa are currently up to £107million over the Premier League’s soon-to-be introduced squad cost control ratio, a new study has found.
Villa’s income will soar next season thanks to their qualification for the Champions League and two new lucrative commercial deals with Adidas and Betano.
But research research conducted by UCFB lecturer Christopher Winn for Off The Pitch has found that Villa would have been at least £67m over the FFP red line had it been introduced this season.
That figure rises to a maximum of £107m in a worst-case scenario, according to the analysis.
The study found that only a handful of clubs are currently prepared for the new FFP landscape (now called Profit and Sustainability Rules, or PSR), which will see clubs limited to a squad-cost-to-earnings ratio of 85 per cent under thePremier League system and 70 per cent under UEFA’s structure.
That ratio will be supplemented with financial anchoring, which will impose a limit on how much clubs can spend on wages, transfers and agent fees based on as yet undecided multiple of the TV cash received by the Premier League’s bottom-placed side in a given season.
The rules will be voted on when the Premier League meets for its annual general meeting in June. Most clubs are in favour of the rules, but Villa are one of just three clubs to oppose them.
Villa’s Financial Fair Play situation analysed
Significantly, the figures are based on Villa’s 2022-23 accounts, the last season for which there is financial data available. Villa posted a loss of £120m on total revenue of £218m that season.
As the nuances of the new PSR rules are yet to be decided, the study outlines three scenarios.
In Scenario 1, profit on annual player sales is factored into the equation, revealing that Villa are £83 million over budget.
Scenario 2 adopts the same approach but extends it over a three-year rolling period, aligning with UEFA’s methodology, and in this iteration, Villa’s overspend reduces to £68 million.
Meanwhile, in Scenario 3, profit on player sales is removed from the equation entirely, focusing solely on a club’s operational revenue. Under this scenario, Villa’s overspend increases to £107 million.
How will Champions League qualification boost Villa’s FFP prospects
Villa are on course for turnover of over £300m next season, breaking their own club turnover record and the record for a club outside the so-called Big Six.
That is thanks in large part to Champions League qualification, which Tottenham’s defeat to Man City last night confirmed.
Top-tier European football will be worth around £64m to Villa all in all. And additional commercial income will see that figure rise further.
Meanwhile, the new kit deal with Adidas and the front-of-shirt partnership with Betano are believed to be worth a combined total of £32m.
Those figures will improve Villa’s FFP position, but owners Wes Edens and Nasseff Sawiris are still likely to be forced to reign in costs over the course of the next Profit and Sustainability assessment window, especially given that rules for clubs competing in European competitions are stricter.
Unfortunately for Villa, that might mean cutting the wage budget or selling a star player.