Yahoo News All we know about Aston Villa's FFP plight as crucial June 30 transfer deadline looms
Aston Villa were hoping to leave the Premier League AGM with more flexibility around spending and financial losses with the club believed to be close to the line in terms of the Profit and Sustainability Rules' (PSR) maximum £105m losses over three years.
Villa were nearly £120m in the red in 2023, but the figures contributing to what UEFA claim to be the highest losses in Europe are in line with the strategic business plan of V Sports. The club's revenue increased during the year to £217.7m, up from £178.4m. Sky Sports have also claimed that Villa are one of six top-flight clubs who face having to sell players before the end of June to comply with the current financial rules.
PSR is set to be replaced by new spending cap rules from 2025/26 after the current set of parameters caused controversy in the Premier League this season following points deductions for Everton and Nottingham Forest. Clubs have voted in principle that sides not in Europe would be allowed to spend 85 per cent of their club revenue on squad costs, which involves wages for their players, amortised transfer fees and agent fees.
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However, clubs that are in Europe would only be allowed to spend a maximum of 70 per cent on squad costs, in line with UEFA rules. It makes Villa's job to continue competing at the top end of the Premier League table and in Europe all the more challenging as the likes of Tottenham, Chelsea and Manchester United - who finished directly below Villa last season - have far greater revenue streams.
Villa were one of three clubs, along with Manchester United and Manchester City, who voted against the new squad cost rules, while Chelsea abstained. Premier League clubs therefore voted 16 to 3 in favour of the introduction of a spending cap.
The cap would involve the teams at the top being able to spend on transfer fees and salaries a multiple of what the bottom club in the division earns - last year, basement side Southampton made just over £100m. The proposals are aimed at creating a fairer financial landscape in the Premier League.
The Times claim Villa want to increase the allowed losses over three years by an additional £30m, from £105m to £135m. Villa are said to have raised the issue with clubs earlier this season, but after formally raising it at the league meeting, they were knocked back.
Another key discussion point at the meeting which could have had a direct impact on Villa is a new financial proposal which aims to improve English sides’ competitiveness in Europe. The Times claim Crystal Palace put forward a plan to give clubs like Villa more flexibility around spending and financial losses.
That's because the Palace chairman, Steve Parish, believes UEFA's coefficient payments are unfair and are not based on merit according to the most recent season. UEFA's coefficient payments are based on a club’s past 10 years of results in European competitions, which meant Newcastle United were given only £3.8m last season compared to Manchester City's £28m package.
Of course, due to Villa's absence in UEFA's elite club competition in the last decade, they will be in a similar position to Newcastle next season after qualifying for the Champions League for the first time in 41 years.
However, reports indicate the proposal - which would have given Villa an extra £20m to £30m in allowable financial losses - has also failed.
What will the summer window look like?
What most fans want to know is how Villa's PSR position will affect their business in the summer transfer window as the club gears up for their Champions League campaign. The truth is Unai Emery is not expecting to recruit many players this summer and has previously admitted Villa must be "intelligent" in the transfer market due to the strain caused by PSR.
Following City's win at Tottenham earlier this month, Villa's place in next season's Champions League was confirmed, but while qualification for UEFA's elite club competition will bring in a tens of millions of pounds of revenue, Emery claims Villa will still have to box clever this summer.
"Of course the Champions League helps us, to increase our level, our demands and objectives for next year," Emery explained. "To play Champions League for the players is something they like. The players we have here and in case we want to add players, to show them our objective, maybe it could help.
"But we have to be intelligent. We must arrange at the beginning the fair play and through that to try and be intelligent to try and build a new team. More or less we are not thinking to add or sign a lot of players.
"We are trying to be intelligent, how we can improve the squad with some players. Of course, we are going to be very demanding in getting the best possible to improve the squad. But we have to work now, deeply analysing it."
He added: "Financially, being in the Champions League is better than not. Our budget could be better, but we have to manage at the beginning the fair play for this season, then we can build. I think we can be intelligent and build a strong team to compete in the Champions League, the Premier League and the cups."
It promises to be an interesting summer at Villa Park considering the financial strain they are under, but they're not alone in that regard. Despite the challenges they could face to improve the squad, Emery is already planning how the club can compete at the top table of European football on a consistent basis.
"When I arrived here, my conversations with Nassef Sawiris and Wes Edens were about winning trophies and getting into Europe," he explained. "To get there you have to be competitive. Even if we don’t have the budget, we have to be intelligent and clinical in our decisions. This is still my objective. We are in the Champions League and we want to keep it. It is our challenge.
"It is a dream. It is very difficult. When we were at the beginning of the season playing two matches against City and Arsenal, we won both matches. We were there. Those teams are amazing with consistency.
"Always I want to get better and I have my dreams. And I believe in my dreams. Of course my objective is to win the Premier League or the Champions League. We are not contenders, but it is our dream to get something like that in the league in the Champions League."
Villa are aware of growing interest in a number of their players, including Jacob Ramsey and Douglas Luiz. Tottenham and Newcastle United are both admirers of Ramsey, but he does not want to leave his boyhood club this summer.
Ramsey endured a stop-start season due to injury, but has all the attributes to one day become a regular in the England national team. He played a key role in Villa's ascent up the league table last term before sustaining a foot injury while on international duty in the summer.
Villa signed Morgan Rogers for an initial £8m in January and the 21-year-old impressed in the 11 Premier League appearances he made before suffering a muscle injury in the defeat at Brighton. He appeared to grow in confidence after each game he played.
As for Luiz, Juventus hold a concrete interest, while Arsenal are known admirers. The Brazil international is contracted to Villa until 2026 and is one of the club's most valuable assets.
It is understood Villa will listen to offers for Diego Carlos, who is one of the club's highest earners. The Brazilian has two years left on his current deal after joining the club in the summer of 2022 under Steven Gerrard.
How Villa plan to increase revenue
It's pivotal that Villa take advantage of their dramatic improvement on the pitch under Emery by continuing to secure lucrative sponsorship deals which will help them remain competitive in the top six every season. A significant part of Villa's increase in revenue in 2023 was driven by finishing 7th in the Premier League versus a 14th place finish the year before, but there were also improvements in gate receipts, sponsorship and commercial revenue.
The 'big six' have grown huge revenue streams because they are global brands, meaning sponsors are more willing to open their wallets in order to be more visible. Heck briefly explained his plan to continue exporting Villa across the globe at the end of last year.
"On the business side we have three priorities that everyone lives throughout the day and the week and the season," Heck told Villa TV. It is very important to us.
"Local is number one, global is number two and then culture is three. Talking about our fans in local, that is the heart of this club and what we are going to do going forward, all the changes in Villa Park, the construction, it is not going to be for one group of fans, it is going to be for all of our fans.
"I think when we have the focus of that fans first mentality, we can achieve our goals. Regarding the globalisation of the club, a lot of the hard work is done for us, with what Unai and Monchi has built on the pitch.
"The attention we are getting is unparalleled. It only works if we build up our content and we have something for our fans not only locally but globally. That of course turns into sponsorship."
Heck has grand plans to drive Villa's revenue to help assist Emery and the footballing department in remaining at the top level. From next season, Villa's kits will be manufactured by Adidas after Sawiris - who owns around seven per cent of the German company - and Heck struck an agreement.
The deal is reportedly worth multi-millions of pounds for the men’s and women’s teams, and the academy. It came after complaints from playing staff earlier this season about ‘wet-look’ Castore shirts. Kit manufacturer sponsorship revenues have been combined with total merchandising revenues to provide as good a measure of club popularity as any, and Adidas will hopefully help take Villa into a global market in the years to come.
Greek online betting platform Betano will also be the most lucrative front-of-shirt sponsor in the club’s history. The Betano deal is set to run for two years until 2026 when the ban on gambling companies on shirt fronts comes into effect.
Back in December, UEFA added Betano as a global sponsor of this summer's 2024 European Football Championship. The betting firm will also sponsor the next two editions of the Copa America. Betano currently features on the shirts of Portuguese clubs FC Porto and Sporting CP, as well as Brazilian clubs Atletico Mineiro and Fluminense.
Earlier this week, Villa announced an extension of the club's sleeve and trading partner agreement with Trade Nation. The first agreement was signed in June 2023 and the partnership will now run until the end of the 2025/26 season.
“The growth of sponsorship has doubled, in the sense of our three big assets - the front of shirt, the kit provider and the sleeve sponsor," Heck said. "Those deals are massive. We're really excited about getting those deals going in the summer, and we'll have a foundation to build on this business with those sponsors. As we add on more sponsors, we add on more nuances with the stadium and premium seating and merchandising.”
So, what has Heck said about Villa's challenge with PSR?
"It's a factor which affects the product on the pitch," he admitted. "It affects every fan. We have a real focus on tackling that problem, but it'll take a lot of time, a lot of effort and a lot of changes as we grow our business. We use the analogy with FFP that we have a train which is the football side, and a train on the business side.
"The train on the football side is going lightning fast and that's a good thing. The business side has to catch that train. We're working around the clock trying to do sponsorship deals, changing the stadium to be beneficial to Financial Fair Play, find new revenue streams, take in our merchandise in-house and things of that nature."
The deals which Villa have secured under Heck put them in a position to "kick the door down" on the Premier League 'big six'.
"What we’ve done in 11 months, we’ve cleared up a lot of, let’s say, not great contracts," the Villa chief said at SportsPro Live 2024. "We have reinvented ourselves. I haven’t been talking much because honestly we have been working to get this accomplished and now it’s time to share that the big six, who we are chasing, quite frankly we are ready to kick the door down."
