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We crunched the numbers to estimate the severity of Aston Villa’s Financial Fair Play problem

We take a look at Villa’s accounts and how they stack up against Financial Fair Play requirements.

Aston Villa v Middlesbrough - Sky Bet Championship Play Off Semi Final:Second Leg
BIRMINGHAM, ENGLAND - MAY 15: Jack Grealish of Aston Villa reacts after being fouled by Ryan Shotton of Middlesbrough as Referee Mike Dean looks on during the Sky Bet Championship Play Off Semi Final second leg match between Aston Villa and Middlesbrough at Villa Park on May 15, 2018 in Birmingham, England.
Photo by Clive Mason/Getty Images

Aston Villa’s failure to win promotion to the Premier League brought about an immediate concern: Financial Fair Play compliance for the 2018–19 season. In the days since, Villa supporters have gone back and forth trying to assess the magnitude of the problem — some assert that they’re sure it’s not a very big deal, while others seem to believe that Villa will have to sell the entire team this summer.

What follows is an exercise in trying to use publicly available data, as well as reasonable assumptions, to get an idea of the steps Villa will need to take this summer to achieve FFP compliance. (Spoiler: Neither the aforementioned crowds are right.)

Why is FFP such a big concern this season? It’s easy math: Villa’s maximum allowable loss over the three-year period decreases by £22 million at the same time that their parachute payment drops by £18 million.

Please note: This is not an attempt to hit the FFP gap on the nose or to speak definitively on, well, anything — however, not knowing everything isn’t a reason to know nothing. I’ve done some research over the last couple months, and wanted to share some of the figures I’ve estimated.

Again, please remember that the figures used for 2017–18 forward are estimates and that there’s probably an assumption or two in here that’s ultimately wrong. I hope you agree that small discrepancies or missed figures are going to be alright. The goal is to provide a rough idea to set expectations, and I hope you find this exercise helpful in that ende

A few rules of the road before we get going:

  1. When a player is bought, his transfer fee is paid for equally over the length of the contract. For example, if a player is bought for £8 million and signs a four-year deal, the club will incur an annual amortization expense of £2 million. At the end of the first year, the player’s book value will be £6 million; after two years, £4 million; etc.
  2. When a player is sold, his incoming transfer fee is evaluated against the player’s book value, and the profit or loss is recorded on the accounts. For example, if the club sell that same player after two years, with a book value of £4 million, for a £10 million fee, the club would only record £6 million as profit.
  3. However, when a player is sold, the club also get out from any future expected amortization expense — the club would shed £2 million in expenses in the first year, then £2 million the next year. Adding the profit/loss to the decrease in amortization expense over the length of the contract gives you the benefit of the full fee. It’s notable, however, because Villa are primarily interested in passing FFP for 2018–19 and likely not as worried about 2019–20 impacts.
  4. Some expenses are excluded from FFP calculations — namely academy, community and infrastructure expenses. These costs were right around £11 million for the 2016–17 season.
  5. That would also mean that if Villa wanted to redevelop the North Stand, as has been floated as an idea for many years now, the costs they incurred would not count against FFP. Similarly, when Villa impaired the cost of Villa Park on their books in 2015–16, it didn’t count against their FFP books. This is how Villa’s £81 million loss that year only gets recorded as a £25 million or £30 million loss for FFP purposes.

And some rules I’m implementing in my analysis:

  1. The club’s financial accounts for the 2016–17 season are published and easily made available. We will use those figures to inform our calculations for that season, and use the same figures to inform our estimates for 2017–18 and 2018–19.
  2. I’m going to vary four figures over the course of the analysis: turnover/revenue from parachute payments, wage expense, profit on player sale, amortization expense. We know the structure of the parachute payments, and we know the transfer business Villa have done. While there will still be guesswork involved, we should be able to get a pretty good ballpark estimate on all these figures. Transfermarkt values will be used for transfer fees.
  3. Everything else is going to be held constant. While I expect some small variations here and there, the club’s matchday income, as well as sponsorship income, is likely to be roughly the same. Ditto for the club’s other expenses. Remember that the goal of this exercise is not to give an exact figure, rather to give an educated estimate that should inform our expectations of summer business as supporters.

With that done, let’s dive in. Keep in mind that the maximum available loss for the three year period running from the 2016–17 campaign through 2018–19 is £39 million.

2016–17 accounts

This is the easy one. Villa reported a £14.5 million loss for 2016–17, but had ~£11 million in expenses that can be excluded from FFP calculations.

Thus, we estimate that Villa had an FFP loss of £3.5 million for the 2016–17 season.

2017–18 estimates

This is where things get a little tougher. First and foremost, we’ll decrease turnover/revenue by £8 million to account for the drop in parachute payments from £41 million to £33 million.

Wages are next, and they’re a little tricky, because it’s difficult to understand the wage agreement used in loan deals (and Villa have some big-money loans both ways). For example, Villa paid 70% (£42,000/week) of Robert Snodgrass’ wages this year, while West Ham paid the remaining 30%. Villa had a number of loanees in the last two years going both ways, and the particulars mean this is an amount that could be a little fuzzy.

That said, I think Villa’s wage bill increased for 2017–18, if for no other reason than they paid John Terry £60,000/week and Snodgrass £42,000/week. I’m going to increase the wage bill by £3.5 million for this season, moving it from £61.5 million to £65 million.

The next consideration is profit from player sales. Villa sold the following players in the last 12 months (remember, all values are from Transfermarkt):

  • Jordan Veretout was sold for £6.3 million, against a book value of £5.4 million. The profit on his sale was £900,000.
  • Nathan Baker was sold for £3.9 million. As he was an academy graduate, he had no book value as no fee was required to sign him. The profit on his sale was the full £3.9 million.
  • Carlos Sánchez was sold for £2.7 million, against a book value of £1.35 million. The profit on his sale was £1.35 million.
  • Leandro Bacuna was sold for £1.35 million, against a book value of £168,000. The profit on his sale was £1.18 million.
  • Aly Cissokho was sold for £1.3 million, against a book value of £563,000. The profit on his sale was £737,000.

Altogether, on five player sales, Villa brought in around £8.1 million in profit. This is an £18.5 million decrease from the previous year, when Villa had profit of £26.6 million on player sales.

So far, we’ve had three categories, and three places where Villa’s loss grew. That’s not the case on player amortization, though. Villa got out from the following amortization expenses between 2016–17 and 2017–18 for a total of £5.6 million:

  • Jordan Veretout: £1.8 million
  • Carlos Sánchez: £1.35 million
  • Leandro Bacuna: £84,000
  • Libor Kozák: £1.46 million
  • Aly Cissokho: £563,000
  • Alan Hutton: £334,000*

*Note: Villa get out from Hutton’s amortization expense as he was handed a one-year contract extension last year, “after” his book value was reduced to £0.

However, Villa also paid transfer fees for Glenn Whelan and Ahmed Elmohamady.

  • Whelan was bought for £1.53 million and signed to a 2-year deal, making his amortization expense £765,000
  • Elmohamady was bought for £990,000 and signed to a 3-year deal, making his amortization expense £330,000

Net, I’ve estimated that Villa’s player amortization expense dropped by £4.5 million, from £23.7 million to £19.2 million.

Putting it all together, we take last season’s £3.5 million loss and…

  • Increase it by £8 million due to the decrease in parachute payments.
  • Increase it by £3.5 million due to the estimated increase in wage.
  • Increase it by £18.5 million due to the decrease in profit on player sales.
  • Decrease it by £4.5 million due to the decrease in amortization expense.

…which means that I’ve estimated Villa’s 2017–18 FFP loss to be £29 million. This runs Villa’s total loss over the two years to £32.5 million, which only leaves a maximum allowable loss of £6.5 million for the 2018–19 season.

Note: I’m counting Jordan Amavi’s transfer to Marseille under the 2018–19 figures, but it doesn’t make a difference at all right now.

2018–19 season

If you reset the profit on players sales to £0 and decrease parachute payments from £33 million to £15 million, Villa would be set for a loss of around £55 million, which is significantly more than the £6.5 million. Correspondingly, the club would need to make moves to make up a £48.5 million gap, which sounds really dire. The reality isn’t as bad, though.

When the final whistle blew in the play-off final, Villa took an immediate step toward FFP compliance, as millions of pounds flew off the wage bill. John Terry’s £3 million in wages are now gone, as are the £2.1 million Villa paid Robert Snodgrass this season. The same holds true for the big wages Gabby Agbonlahor and Alan Hutton were on, as well as the other players that have left the club. All in all, I’m estimating that Villa have already dropped the wage bill by around £13 million.

Additionally, three players have already left the club: Carles Gil, Pierluigi Gollini and Jordan Amavi will all seen their loan moves go permanent this summer. Villa get the following profits on player sales:

  • Amavi will be sold for £7.2 million, against a book value of £3.96 million, for a profit of £3.24 million.
  • Gil will be sold for £1.7 million, against a book value of £840,000, for a profit of £860,000.
  • It appears Gollini will be sold for £3 million, against a book value of £2.25 million, for a profit of £750,000.

Put it all together, and Villa have already arranged for £4.85 million in profit on player sales.

Similarly, Villa have already decreased their amortization expense for next year by the following amounts:

  • Jordan Amavi: £1.98 million
  • Carles Gil: £840,000
  • Pierluigi Gollini: £1.13 million

In all, Villa have already decreased their expected amortization expense for next year by around £3.95 million.

Factoring all this in, I’d estimate that Villa’s remaining FFP gap is somewhere between £25 million and £30 million (though it could certainly be a few million in either direction as well).


All things considered, if that’s all the club have to make up from this point, it’s not an awful position to be in, especially considering the club could have sell-on fees coming from Adama Traoré and Jordan Veretout transfers.

However, I think it will be hard for the club to achieve FFP compliance without selling at least a couple players that would be expected starting XI members next season. It’s one thing to say Villa should offload fringe guys like Aaron Tshibola, Ross McCormack, Gary Gardner or even Henri Lansbury, but it’s another thing to actually find clubs that want to buy them for enough money to make a difference.

In my opinion, the biggest takeaway is that I don’t think Villa need to sell Jack Grealish. They might choose to sell him for a number of different reasons, but the club should have different options, with a chance to sell a handful of Albert Adomah, James Chester, Scott Hogan, Conor Hourihane and Jonathan Kodjia to clear the gap instead.

Villa have choices and options, and I trust that the club knows how it wants to proceed. Keith Wyness has known this possibility has coming for a while now — fingers crossed that their path forward is one that secures the long-term stability and future of this great football club.