One of the biggest narratives in the Championship this season has been the question regarding Aston Villa’s finances. Just how financially stable are the club, after spending so much after being relegated? Villa have been wasteful with their spend, and boy - they did spend a lot. The questions are only natural.
With that in mind, and with Aston Villa having just released their accounts for the 16/17 season, what’s the general take on Villa’s affairs?
How are Villa doing?
We discussed this deeply in our writers chatroom. How are Villa doing? Phil Vogel brought up a good point - we don’t exactly know. We can make a very good guess based on what we have, but what we have is a year behind. What we do know is that Villa have improved in some aspects, and as long as that keeps going the right way - we don’t have a whole lot to worry about. Of course, we’re not going to know anything until this time next year. We’ve also signed John Terry and a bunch of other high-cost players since then.
Still, the reality of the situation is that Villa are in a pretty poor financial state. That cannot be ignored. Any club who has to make a system-changing transformation just to cope with Financial Fair Play regulations is not in good shape. We cannot ignore that. Villa are going to be under some serious pressure if they are not promoted this season, as their parachute payments are going to drop in size next season. That’s a big chunk of income that will vanish.
Wages are tricky. Villa are bleeding money in wages, but these aren’t even listed on Villa’s accounts.
While the big contracts of Gabby Agbonlahor, Alan Hutton and John Terry will expire, they’d need to rid themselves of Henri Lansbury and Micah Richards as well - who are earning decent cash at Villa and aren’t really playing (though, are hardly comparable). Wages are the thing that could cripple Villa, and they cannot be anything outside of efficient. Anyone who isn’t contributing, but is on big money, needs to leave the club. This wage bill is grotesque, and it’s scary to consider.
Villa will need to be tricky if they seek to survive. Losing parachute payments is one thing, but what about cashing in on players? We can’t ignore that Villa made a decent wedge of cash through player sales. This isn’t going to be the case next season unless Villa sell first-team stars. Villa’s revenue suffered a 33 percent drop after relegation, so ideally we won’t see any drastic drops when the 17/18 accounts are revealed.
Villa’s gate income is still decent, but it’s a drop in broadcast revenues and sponsorship that have had a huge impact, as well as a decline in commercial performance. It’s to be expected from the club’s status in the second tier, but it is still a hard pill to swallow. Relegation has had a huge impact on the club in more ways than one.
The Xia regime
It must be said that Tony Xia, Keith Wyness and the rest of the crew have probably done the best that they can to get Villa out of the Championship.
However, they could have done a lot better at the start of their regime. Villa must have wasted around about £30 million last season on players who did not work out. Simply put, that is unacceptable and accountability for the deals of Aaron Tshibola, Ross McCormack, Pierluigi Gollini has to lie somewhere. Deals like this have cost the club money that it soon won’t be able to afford.
However, we must note that Wyness and Xia have done a fine job so far, apart from that early stumble. Hindsight is a glorious thing and we will likely be grateful for the foresight shown by Wyness if Villa falter in their battle for promotion in this current season.
The Lerner damage
Whether it was meant, or not, Randy Lerner’s reign at Villa damaged the club. Almost 600 members of staff lost their jobs due to rampant workforce in-efficiency at Villa Park which was corrected by the current regime. Overhiring has killed or crippled many a business, and Villa aren’t outside of that. While a number of staff left on their own accord (thanks for letting us know, Dan!), it’s still annoying to see the state that this club was left in, and the impact it has had on many people.
Tom Fox’s salary was also huge. £3 million for what? Thankfully, Villa’s current CEO seems to have more gumption about him, and is on a whole let less than Fox. Good.
Villa would have been in real trouble if Lerner’s apathy had continued, along with his reign. While he may have been able to stabilise Villa and turn them around into being a Championship also-ran, they could have also ended up like Sunderland, thanks to panic buying. It is somewhat of a mercy that we do not have to deal with that what-if scenario.
The good news?
It could have been worse! Villa managed to cut their losses and there’s some stuff to be positive about. Namely, Aston Villa aren’t unaware of the consequences of missing promotion. They have planned out the worst-case scenario. That’s more than we can say for most regimes at most football clubs.
The bad news?
It could have been a lot better. Villa pissed away a lot of money on pointless signings. Ross McCormack’s transfer from Fulham was almost a record-breaker for Villa, and what did he achieve? Villa doubled down by signing Jonathan Kodjia and then Scott Hogan in expensive transfers. Ideally, these decisions are left in the place.
We can’t judge much from last season’s accounts, truly it is this season’s that will tell us a better story, for sure. They don’t much matter in the big picture as the parachute payments were fat, the money was there and the target was promotion. We just need to hope that the lessons were learned, and based on what we know - they have been. Fair play to Wyness and co.
Villa could have done with a bit less wastage last year. What’s more, next year does not at all look comfortable for this team if they are still plying their trade in the Championship. Promotion will be essential, and that’s pressure we don’t need. Time to get the job done.