Summarize and humanize this content to 2000 words in 6 paragraphs in EnglishAston Villa’s senior figures acknowledge selling key players is par for the course.Raising additional funds is critical for the overall running of the business, especially after a £119.6million post-tax loss in the 2022-23 season and now, following the 2023-24 campaign, an £85.9m post-tax deficit. Across two seasons, Villa have suffered post-tax losses of more than £200m ($254m).Staying in line with profit and sustainability rules (PSR) will remain a constant challenge and is determined by Villa’s appeal on the pitch. The more success, the more revenue and transfer spend. From Villa’s standpoint, deep investment was required to generate significant change — as shown in Unai Emery’s tenure, transforming a relegation-threatened side to a Champions League one — with hefty losses seen as inevitable. The hope is that, in time, the success Emery has led will bridge the gap. Whether Villa can do it all within a PSR timeframe is the more pressing matter.Regardless of whether Villa secure Champions League football for another campaign, staying in line with PSR — which dictates teams cannot incur losses of over £105m over a three-year period — requires players to be sold. Villa accept this given that with costs higher than current revenues, the deficit will need to be covered by transfer departures this summer.Here, The Athletic takes a look at some of the key talking points.What are the headline figures?Villa lost £85.9m pre-tax last season, which, though a £34.4m (29 per cent) improvement on 2022-23, was still the club’s third-worst financial result in history. It takes their pre-tax loss since the July 2018 takeover by Nassef Sawiris and Wes Edens to £411.4m.The duo injected £148.2m in equity funding last season, taking their total funding at the helm beyond the £600m mark. A further £94m was provided in the second half of 2024.
Edens, left, and Sawiris took over in July 2018 (Zac Goodwin/PA Images via Getty Images)That funding has often — though not always — gone on improving the playing squad. Villa spent £167.6m on new players — the fourth time in five years they have topped £100m. The cost of assembling their squad sat at £503.1m at the end of last June, which was the eighth highest in England but did trail seventh-placed Newcastle United by more than £100m.By contrast, Villa’s wage bill was £252m last season, topping Newcastle and Tottenham Hotspur. That marked a club record and was England’s sixth-highest wage bill, which still meant finishing fourth was an overachievement. The wage bill — up 30 per cent on 2022-23 — included bonuses for achieving Champions League qualification.What do these accounts tell us?The immediate threat of PSR may not be quite as relenting as last year, but for a club whose revenues are not comparable to the top European-calibre teams Villa want to compete with and against, it will remain the elephant in the room. In the previous set of accounts where Villa posted the worst financial result in Europe — according to UEFA’s Club Finance and Investment Landscape report — they had the ninth-highest revenue in the Premier League (£217.7m), behind teams such as West Ham United (£236.7m) and Newcastle (£250.3m).Though Villa’s revenue has markedly improved, owing to unlocking Champions League riches, a major issue impacting this is their stadium capacity. West Ham, for example, boast a ground that holds 20,000 more spectators than Villa Park’s 42,640.It is not lost on senior figures that their desire to transform the club is much harder and slower than in the age before PSR, where the likes of Chelsea and Manchester City could accelerate progression with few spending limits.What are the positive signs and what should cause worry?Villa are taking steps to increase revenue streams and break beyond its ceiling. In December, they announced a regeneration project at Villa Park, which includes a 3,500-seater venue for “year-round entertainment”, larger areas outside the stadium and a plaza that connects the stadium with the club shop. Investment in infrastructure does not impact the bottom line (at least not until it is built and generating income), which means Villa can invest in methods that will grow revenue and ease PSR longer term.Villa’s income is rising, up 27 per cent in a year and 145 per cent in the past decade. All three income streams grew in 2023-24 and the club were able to increase gate receipts by nearly 50 per cent to £28m. That is still well behind Newcastle (£50.1m) and West Ham (£44.6m).Arguably more impressive was commercial income, where Villa’s takings rose to £63.3m. Commercial revenues are up £24.2m in just two years and should rise again in 2024-25 following new deals with Adidas and Betano, alongside an upgrade in the sleeve sponsor agreement with Trade Nation.
Emery has transformed Villa on the pitch (Neal Simpson/Sportsphoto/Allstar via Getty Images)Despite rising revenues, Villa’s costs have generally grown faster. A record wage bill meant wages as a proportion of turnover hit 91 per cent — the worst of any Premier League club last season. Those European bonuses will have impacted the figure, but the club’s surge from the Championship to the Champions League has come at a cost.The cash lost from day-to-day operations worsened last year to £47.7m and was the second-highest operating cash outflow in club history after the 2018-19 Championship promotion season.The hope is operating cash flow will improve with sustained forays into the lucrative Champions League, but it’s clear why Sawiris and Edens have been so loose with the purse strings to date. On top of operating cash outflow, Villa’s net cash transfer payments topped £100m last year, too.Though redeveloping Villa Park’s North Stand was shelved in late 2023, Villa have not shirked infrastructure investment under Sawiris and Edens. They spent £16.4m cash on capital expenditure last season, taking the tally since their takeover to £69.4m. In the six years before their arrival, that figure was £12.9m. Are they close to breaching PSR?Villa were deemed compliant with last year’s accounts but did not soften their frustration towards current PSR guidelines. In June, Sawiris said he was considering taking legal action against PSR rules.Around this time, Villa had proposed to raise the maximum permitted losses from £105m to £135m last year, but that was rejected at the Premier League’s annual general meeting.Villa are skirting trouble with — and are expected to incur a considerable fine from — UEFA’s PSR limits, which restricts spending on “player and coach wages and transfers and agent fees to 70 per cent of the club’s revenue” from the 2025-26 season onwards. This year, Villa have to fall below 80 per cent, having been above the 90 per cent limit in the 2023-24 campaign.Domestically, last season’s accounts lay bare how tight things became, too. Across the 2022-24 PSR cycle, Villa’s pre-tax loss was £205.8m, meaning the club needed £100m in deductible expenditure to hit the £105m PSR limit.Conveniently, and unlike just about every other club in the land, Villa disclose key deductibles in their accounts. Across the last three seasons, they spent £48.1m on youth development costs, £14.6m on community development and a further £13.3m on their women’s team. Combined with depreciation on fixed assets, this reduced Villa’s pre-tax loss by around £90m — though that still leaves them £11m shy of compliance.The Premier League brought no new charges following Villa’s 2023-24 financials, so we know they complied last season. They extended their accounting period, ostensibly to book sufficient player sales in 2023-24 to avoid a PSR breach, but clubs still have to calculate their PSR result over a 36-month period.To that end, extended accounting periods, like Villa’s 13-month 2023-24 accounts, have to be prorated. It isn’t as simple as just taking 12/13ths of that year’s figures. It’s unclear, but the likelihood is this prorating resulted in Villa coming in under the £105m loss limit — just.What is clearer is that the last-minute deal, in an accounting sense, to sell Douglas Luiz to Juventus last June spared Villa from a PSR charge. Douglas Luiz departed for Turin for €50m, with Samuel Iling-Junior and Enzo Barrenechea coming the other way. Without the profit booked on the midfielder’s sale — around £40m — and the £10m earned from Everton in a similar deal that saw Villa sell Tim Iroegbunam and acquire Lewis Dobbin, the pre-tax loss in the last PSR cycle would have topped £250m.
Douglas Luiz’s sale to Juventus was a necessity for Villa (Zac Goodwin/PA Images via Getty Images)Going forward, Villa will benefit from a huge increase in broadcast money this season. Their Champions League run has earned them an estimated €80m-plus in Champions League prize money.Yet they will suffer from 2021-22, when they made a £0.4m pre-tax profit, falling off their PSR calculation, as well as another expected increase in the underlying wage bill and continued squad improvements.The accounts disclose Villa’s net spend between July 1 and October 9 was positive at £27.3m, which doesn’t include the £19.4m spent on Donyell Malen in January or any costs involved in the arrivals of Marcus Rashford, Marco Asensio and Axel Disasi. The £64.3m sale of Jhon Duran to Al Nassr looks to have been required work from a PSR perspective.How will it impact their transfer planning this summer?Villa have large assets, with the current standing and Champions League campaign meaning they can ask for significant fees. This happened with Duran in the recent transfer window; had Villa been a mid-table side and Duran had not scored the goals he did in the Champions League, they would not have commanded that level of fee.
Duran’s form this season raised his price when he was sold to Al Nassr in January (Jose Breton/Pics Action/NurPhoto via Getty Images)There are several players with suitors. Villa have informed Boubacar Kamara they wish to extend his contract, but he is on other teams’ shortlists, as well as Jacob Ramsey, Morgan Rogers, Leon Bailey and Ollie Watkins. Should Villa qualify for the Champions League again, Emery will want a similarly big squad and will intend to acquire top-level pedigree. Throughout, however, consideration must be given to who leaves.Will Champions League riches help? As Villa sources, speaking on condition of anonymity to protect relationships, point out, financial success always comes after on-pitch success.For context, last season’s Conference League campaign, which ended in the semi-finals, raised €16.2m. Now in the quarter-finals of the Champions League, Villa will make more than €100m from prize money and improved gate receipts.If they come through a fairly daunting quarter-final with Paris Saint-Germain, it won’t just provide on-pitch glee. A further €15m in prize money awaits.Sources who share existing knowledge of recent deals have told The Athletic that commercial agreements with Villa include ‘kickers’. This means the club will receive additional revenue every time they qualify for the Champions League.Other recent commercial partnerships, such as with new front-of-shirt sponsor Betano, have incentivised clauses: Villa will unlock a new amount of sponsorship money from the betting company upon qualification. The same is true with existing shirt sleeve sponsor Trade Nation, with Villa using its better position to negotiate a more lucrative agreement for next season.(Top photo: Charlotte Wilson/Offside/Offside via Getty Images)
