Aston Villa could end up paying out as much as £62million in a development that is set to impact their financial fair play quota limit next season.
Villa, who rounded off their campaign with an uncharacteristic 5-0 defeat at Crystal Palace, have qualified for the Champions League in 2024-25 after a remarkable season of progress.
Unai Emery will have delighted owners Nassef Sawiris and Wes Edens with this stunning feat, which is likely to be worth upwards of £60m all told next term.
But while Villa are on course to smash their club turnover record thanks to their achievements, Champions League qualification comes with a series of costs as well income.
Villa could pay up to £62m in bonuses and add-ons
Villa’s official accounts show that the maximum they could pay out in performance-related bonuses and add-ons is £62m.
The figures, which are detailed in the ‘contingent’ liabilities section of the financial statement, are made up of payments to their own players and other teams through transfer clauses.
In reality, the figure will likely be slightly smaller than that as not every performance-related condition will have been achieved.
But Villa’s extraordinary achievements this term mean the true amount will be relatively close to £62m.
How do Villa’s bonuses compare to other Premier League teams?
Villa’s are the contingent liabilities have risen by almost 700 per cent from just £9m three seasons ago.
Their £62m figure is more than the likes of Liverpool at £34m, although is short of Man United’s £133m and Man City’s £262m.
Everton are another outlier. Their contingent liabilities total £105m, but, unlike Villa, the majority of that total is likely to have gone unpaid.
Financial fair play: Can Villa spend big in the transfer market?
Villa are on course to bank around £300m in turnover next season.
And yet financial fair play (now called Profit and Sustainability Rules, or PSR) is acting as a constraint in terms of their ability to compete with the very richest in the transfer market.
According to analysis from Off The Pitch, Villa’s spending in recent season means that they have somewhere between a £67m and £107m PSR deficit to make up.
That calculation is based on the squad cost control ratio and financial anchoring system the Premier League looks set to introduce at their next AGM in June.
However, as Villa will not release their 2023-24 accounts for some time, the formula employed uses the figures from 2022-23 to gage Villa’s readiness to comply with the new financial fair play rules.
The extra revenue they will generate from the Champions League, as well their two new £20m-a-year deals with Adidas and Betano respectively, will allow them some wiggle room in the summer.
However, player sales will also be needed if Emery is to have full manoeuvrability in the window.