Aston Villa sent clear FFP verdict on 'mini transfer window' after Nassef Sawiris intervention

Aston Villa are the "big winners of this mini transfer window".

That's the verdict of a Business of Football guru following the player-trading manouvres Villa's powers-that-be have been making ahead of this Sunday, June 30.

In a transfer merry-go-round designed to keep Unai Emery's Champions League gatecrashers the right side of PSR rules and competitive enough to challenge on several fronts in 2024-25 and beyond there have been many movements.

Midfield maestro Douglas Luiz to Juventus, with rookie Tim Iroegbunam joining Everton and Chelsea chasing Omari Kellyman are the outgoing deals either done or in motion, while Chelsea's Ian Maatsen, Juventus duo Samuel Iling-Junior and Enzo Barrenechea and Everton youngster Lewis Dobbin are the names to be added to the claret and blue roster.

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This summer's early wheeling and dealing has been prompted by Sunday's accounting deadline as clubs pushing the limits of spending allowances strive to spruce up their balance sheets for the current financial year's accounts.

It has led to suggestions that Villa and clubs including Everton, Chelsea, Newcastle and Nottingham Forest are seeking to exploit loopholes to squeeze within the rules.

Mat Kendrick, host of our Claret & Blue podcast, quizzed Dave Powell, football finance for Birmingham Live and associated Reach PLC titles, for his expert insight into Villa's transfer activity.

MK: Tell us about the June 30 mini transfer deadline and why it is particularly significant this summer?

DP: The short answer is it's the end of the financial year for most Premier League teams. Not all, but most. Usually, Villa's end of financial year would have been the end of May, but they've extended it to 13 months. They did that earlier this year. So theirs finishes on June 30. Basically it's the last final knock-ins of a financial year whereby you can raise revenue through player trading.

Now, for the most part, all of your commercial revenues are already in, you've had all of your season ticket money from the previous season and all of your prize money, so the only lever left to pull really is player trading. It’s the last few days now where clubs can actually raise funds that would appear in their accounts to make their picture a little bit healthier and alleviate any PSR concerns they may have.

This has taken on greater significance this summer because we've seen two episodes of points deductions for Everton, one for Nottingham Forest, and Leicester will come up with a deduction. They’ll be starting behind the rest. Clubs know now that there will be serious sanctions.

I think player trading is the main reason Villa have extended their accounting period to include June. Because of the transfer window, there's no way to do business in May, so if you're extending that window into a period where you can conduct your business, then that's beneficial.

MK: How much of an issue is the £105 million yearly loss limit for Premier League clubs?

DP: The £105 million limit (the amount of losses clubs are permitted to make each each, based on a cycle of years) has been in situ since 2012. It was supposed to stop us having another episode like Portsmouth when they went into administration after spending heavily without the revenue to support that spend. That was the idea behind it.

But this limit has not kept pace with inflation. Regulation doesn't keep pace with the pace of football growing. Wages have risen exponentially, transfer fees have risen exponentially, and the cost of running a football club has gone the same way. This £105m figure becomes harder to make work every year if you haven't got the revenues to match it, which ultimately stunts growth of those who want to try and break into that little enclave of wealthy teams.

Everton tried and failed to do it in the early years of Farhad Moshiri, hence the reason why they’ve had to roll with the punches in recent years. But what’s happened with Everton is that the regulators came down hard on them, partly because the Premier League wants to show it has some teeth when it comes to regulatory matters. With the white paper and the football government's bill, they don't want powers taken away from them because they feel it will diminish the product of the Premier League on a global scale.

But ultimately the Premier League spent £30m fighting their own clubs in legal fee over the course of the past year and it’s become a real mess. They've now set a precedent for the kind of punishment they will dish out and they've said it's been explicitly laid out that if you are in breach you will suffer a points deduction now.

MK: How do these sanctions impact the thinking of Villa and their Premier League rivals?

DP: If you're a mid-table side and you're thinking 'well okay we're not going down, the squad's strong enough, but we're not troubling the top four', maybe you that decision to risk it. But for someone like Villa, once you've tried to be part of that ‘elite’ and you’ve latched onto that group, to get a three or four points deduction could be the difference between making the Champions League or not, or making European football or not.

The flip side, for a club like Everton, is they know they will need to comply because they know they haven’t got the money to strengthen so they could be battling relegation again. Another points deduction could have a significant impact on their ability to stay in the Premier League. Last season’s sanctions have focused minds, and it will be the reason why everyone's taking this very seriously and doing their level best to ensure that they remain within the limits by the time the auditors come snooping.

MK: How big a challenge is it for Villa to comply financially but get the squad at a level to be truly competitive?

DP: Villa are going to be fighting on several fronts. They will be trying to replicate what happened last season in the Premier League as well as being competitive in the Champions League. It's very difficult when you're running with a small squad to do both of those things. Newcastle found that a challenge and the Champions League isn't the Europa Conference League. You're not throwing kids in, really. It's going to be an elite event requiring sell-out crowds, playing the best of the best, and it's going to involve experienced players. So to have a deeper rotation in your squad, that's important. But it comes at a cost for Villa, which is unfair.

MK: What do you make of Villa’s stance and the interview Nassef Sawiris gave to the Financial Times?

Sawiris was quoted as saying: “Some of the rules have actually resulted in cementing the status quo more than creating upward mobility and fluidity in the sport.The rules do not make sense and are not good for football. Managing a sports team has become more like being a treasurer or a bean counter rather than looking at what your team needs. It's more about creating paper profits, not real profits. It becomes a financial game, not a sporting game.”

DP: You can see why Nassif Sawiris has taken such issue with it. When Villa made their representations to the Premier League and its member clubs that they should be increasing this PSR threshold to £130 million, that's still actually £16 million less than what it would be if it were in line with inflation. I think they would have been hoping for more support than they got on what they were asking to do. But the majority of clubs in the Premier league have to pass these things and it's not always to the benefit of all the clubs to do that. Villa will know this coming season they've got plenty to look forward to in terms of additional revenue .They knew this small bit of pain was coming down the tracks if they wanted to be successful. Villa don't particularly want to lose someone like Douglas Luiz but I think they've been quite cute in bringing in Ian Maatsen and adding more players than they've lost.

Most clubs can't draw in commercial revenues the same level as Manchester United, Manchester City and Liverpool because they're not they're not brands of the same level. They've been playing these competitions for the same amount of time as those clubs and to us here in the UK we we have a different view of ‘big teams’ through the prism of the English game. We look at clubs like Villa, who have been European champions in their history. It's not always been United and Liverpool and think 'why shouldn't they challenge?'.

Chelsea is a construct of being able to spend money before financial regulation arrived properly in 2012. Same for Manchester City. During that period of time, you had Roman Abramovich and Sheikh Mansour come into those respective clubs. They poured huge levels of money into it. Chelsea actually changed the dynamic of the transfer window forever from 2004 when Abramovich came in. Those clubs were allowed to do that because there was no regulation. They broke no rules in doing that.

But now the rules are obstructive around other clubs trying to be more competitive and allowing more ownership spend. I am a believer you have to have some handbrake on how much owners can spend because that's when you run the risk of it becoming farcical. But I think Villa were bang on and had a real case to try to rise raise this PSR limit to £130m because it just hasn't kept in line with inflation, it costs far more to run a club now. I think Sawiris is well within his rights to be angry.

MK: Is this a classic case of the established 'elite' trying to keep pesky upstarts like Villa down?

DP: Those who 'have had' don't like having it taken away or threatened to a greater extent because the biggest clubs have been built on success annually and they've built brands on it. It's a crucial time in football when it's changing generally. We have a generational shift. The way we consume football is different. The way different generations consume football is different. We have different markets now. Who would have thought back in 1994 that the US would be such a fertile market for English football? Now it could actually help save the growth of the Premier League because our own domestic rights are starting to stagnate a bit and the US wants to continue to rise.

Those big clubs don't want the status quo disrupted at this crucial time. They don't want noisy neighbours. They want people to play their role as 'extras' in the Premier League soap opera not the main protagonists. I know we had Leicester but they were never scared Leicester were going to upset the the odds regularly. It was a tale that they took on the chin because it actually made the Premier League a more compelling watch for that season. It actually generated headlines globally and cut through the noise because it was such a crazy tale.

But if you've got designs to actually be there and be a part of this for the long run and you start getting yourself at the table and eating someone else's food that's when people have a problem with it. That's when you know there will be a significant amount of pushback from from the established big clubs when you're trying to make that happen.

MK: Last season Villa sold Cameron Archer, Aaron Ramsey and Jaden Richard Philogene-Bidace for big fees, but nobody batted an eyelid. What do you make of suggestion that Villa and others have over-inflated transfer fees for rookie academy kids this summer? Is it because Villa are now perceived as a threat?

DP: I saw people saying how crazy it was that clubs like Villa were supposedly inflating transfer fees and how could someone like Tim Iroegbunam be worth £9m, how is Lewis Dobbin worth £10m, how is Omari Kellyman worth £19m? They are because someone was willing to pay it. How was Rhian Brewster worth £25m, how was Jordan Ibe worth £15 million? It's what someone is willing to pay. Sponsorships are different because there is a market value to sponsorships. But you can value talent in a completely different way. So I find it a completely kind of flawed argument to say these values can be inflated. I mean, you don't know, you could be selling a player for £19m who turns out to be a £75m player. You don't know that, that's the risk you take. There's no way of ever seeing that.

So, yeah, Villa are noisy neighbours now and they did it with a structure and a strategy, but also with people with smarts and connections and money who are willing to play a long game with this. That means that the biggest clubs have got to continue to work and try to push the envelope. They don't always like doing that because they haven't been challenged in a big way for a while, which is why I think it's a real shame Villa haven't been allowed to really. I think having the ability to spend a little bit more and the strength to keep hold of Douglas Luiz and add players around him would have made for a really, really interesting season to come. I still think Villa will be good, but they're starting from two steps behind again and it's deeply unfair.

MK: How shrewd are Villa’s footballing, financial and commercial teams being to navigate a way through this?

DP: They are hugely important to football clubs now. There are teams of accountants and finance officersbecause it's so important to remain within these regulations. It has never been more crucial to have strong leadership from a commercial aspect as well. I know Chris Heck came in at Villa and ruffled a few feathers, according to some reports. Having to change over from some existing deals that were in place and move into new, improved deals. But sometimes that's just a cold, hard way of having to do business with what's best for the long run.

Nassif Sawiris is a stakeholder in Adidas. Villa have become a global brand and want to get products and merchandise into the hands of global fans so they need a global partner, which is why they've got Adidas. It's not just finance officers that are so important. It is vital to have a good, strong leadership team in across the board, which has to make tough decisions. I think that's what has happened at Villa. There's been a cultural change there and that will continue. I mean, yes, it's run like a business and every element of the business has to wash its face and show its delivery.

Having a strong financial team who know the ins and outs, know how much you can and can't do snd how much wiggle room you've got at any moment in time is ultimately hugely important. And that's what Villa will know. They'll know precisely how much they can spend. I imagine this year they'll be right on the button when it comes to PSR, but that's all they need to be. The slate wipes clean next year. And with the new revenues they can find I think the outlook is quite rosy.

MK: Do you expect there to be some more transfer movement ahead of the June 30 deadline this weekend?

DP: Yeah, I do. There's a few clubs who are willing buyers for these academy players, provided there's willing buyers for their own. If opportunity knocks, then I think things will happen. But I think the onus is now less on Villa. Everton are almost there as well with what they need to do.

Newcastle will have work to do because they have a considerable PSR gap to make up and there’s talk of Alexander Isak being sold. While they had additional revenue from the Champions League last year, it wasn't as much as they possibly hoped. They banked about 30-odd million, but was two less games than Villa will have this season and also Newcastle spent considerably to acquire talent. With that comes higher costs and higher wages so I imagine they'll have to try and move on players to remain compliant and won't be able to add in the same way that Villa have so close to the end of this window.

Looking at all of this I think Villa are the big winners of this mini transfer window. But I think there will be a few more clubs moving players around to try to give themselves that breathing space and to reduce losses. Villa have to be applauded really for how they've managed to approach the back end of this mini transfer window and still come out with a a strong squad. They need to replace Douglas Luiz, but they can do that in a new financial year. I'm hopeful that it's going to be quite a rosy future for Villa.