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Aston Villa finances YE 2014


jackbauer24
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Someone had commented on the last set of accounts (Feb 14) but thread was locked due to age. I know our financial past has been discussed to death but what about the future?

 

The latest report will not be due til late Feb but what are people's views on where we currently stand and are there are any accountants that can take a guess at what our future may hold?

 

I must admit, going forward, I'm struggling to understand why we are such paupers - is it simply a case of paying off old debts and how many years will that take?

 

Very roughly I think our basic turnover should be around £85m, with wages hopefully dropping closer to £65m (from £75m) so that means we should be making somewhat of a profit this year (I know there are other operating costs). Or is it not this simple?

 

I am no accountant but why are we struggling to financially compete when the likes of West Brom, Leicester and QPR can outspend us in transfers and wages. All within the remit of FFP.

 

If the debt were wiped out, would we be competing with these 'smaller' clubs? How long will we paying for past mistakes?

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I think all debts are owed to Randy, who won't see any of that back unless he sells the club. I think now the club is self-sufficient due to cutbacks and increased TV money, which covers what we were losing plus allows an extra £15m or so for transfers I believe. Fox must have been brought in to help with getting new commercial revenue streams to help us increase turnover, along with reducing the wage bill and buying players with potential big resale value. I think that's the plan from now on, Lerner won't donate any of his money any more.

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I suppose the question really is, what can the average Premier League team afford transfer and wages wise? If you're not the likes of Man City/ Chelsea then what is within affordable ranges based on average turnover?

 

If we are (except the debt) now self sufficient, why are we such paupers in comparison with a majority of other teams? Are everyone else living far beyond their means and we'll be sitting bottom of a five team league when everyone else has gone bust?!

 

Newly promoted Leicester have just spent £9m on a striker with around the kind of wages we offer, how do the likes of these teams afford it?

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I suppose the question really is, what can the average Premier League team afford transfer and wages wise? If you're not the likes of Man City/ Chelsea then what is within affordable ranges based on average turnover?

 

If we are (except the debt) now self sufficient, why are we such paupers in comparison with a majority of other teams? Are everyone else living far beyond their means and we'll be sitting bottom of a five team league when everyone else has gone bust?!

 

Newly promoted Leicester have just spent £9m on a striker with around the kind of wages we offer, how do the likes of these teams afford it?

All these teams must get very similar TV revenue, I assume the difference is the wage bill. Leicester must have come up with a Championship wage bill which is nothing compared to ours which has been 80% of turnover or something. We also have had next to nothing in through player sales compared to some other teams. There are much better people on here to understand it all than me, but that's how it kind of works in my head.

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Yay a new thread for me to bore people about finances.

The reason newly promoted teams can spend so much is they largely will have the same income as us for that year, the vast majority of our income is from TV revenue and it is the same with them.

The difference is two fold, firstly they have a lower cost base aka lower wages and support staff and secondly they have much smaller 3 year losses so they can spend over the amount we would if their chairman isn't worried about making a loss.

With regard to our own finances we have been dealing with the MON/Houllier fall out and still are the reason for this is 3 fold.

1. Players on high wages we couldn't afford without CL income.
2. Having to replace players that weren't good enough or didn't fit the 4-3-3 system and were on those high incomes.
3. Amortization 

For point three I will use Darren Bent as an example.

Brought for 18m on a 4 year deal this means that every year since we signed him not only have we paid him somewhere between 70 and 80k a week (3.5m to 4m per year) depending on which paper you read but due to amortization on the accounts we have lost a quarter of his fee per year off our accounts so a further 4.5m per year assuming Bent didn't hit any of the clauses that would have made him fee grow to 24m. Just for clarity if it was a third year deal it would be a third of his fee per year and for a 5 year deal it would be a fifth of his fee.

I am sure one of our resident accountants can explain amortization better but the point is we have very large 3 year losses and with FFP rules on losses being reduced this year again from the current 45m euros to 30m euros max loss per 3 year period it is important we continue with not making losses for now.

With regards to the turnover mentioned on the OP it will actually be much higher due to the new TV deal and we won't be making a loss anymore spending circa 15-20m per year on fees.

With regard to the future once the end of this huge 3 year loss period is over and players like Bent/Given/N'Zogbia's contracts have all run down we should be in a very healthy position moving forward as not only will we continue to have 15 - 20m a year to spend we will have also freed up a large portion of the budget for wages and be able to spend that extra 10m euros a year (30m euros over 3 years) IF Randy wants to lose money again as it can't be done in the form of a loan now but as a capital injection from his own pocket.



 

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Yep I know but we haven't made losses for a couple of years...

It would be easier to understand your post if you specified the years you are talking about. Is the "huge three year loss period" the last three years (during which, you say, we haven't made losses for a couple of years) or is it the last three years during which there were losses - would that be 2008/9 - 2010/11?

 

Confusion about timing is enhanced by mentioning MON/Houllier as the managers responsible for the losses but referencing Bent, Given and N'Zogbia as players with expensive contracts. The last two were of course hired during McLeish's time.

 

Anyway, is it true we haven't made losses for a couple of years? I thought last year's accounts showed a loss - can't be bothered to go back and check.

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IF I understand this then (and I'm not sure I do!) we will remain in a crappy situation until the summer when we lose the bigger earners and the effects of loss of value in their initial transfer fee.

 

We then might be making £20-£30m profit a season so, seeing as Lerner will not be spending his own money anymore, it's fair to think this will largely (at least 50%) be used to service the current overall debt. Say we paid off £20m a year I assume we're talking ten years to be out of debt in the current climate. So if Lerner stays it's much of the same for another ten years? Only hope new owners working in a paying of the debt off as part of deal.

 

As for newly promoted sides, they are using their three years worth of losses up in one year in the hope of Premiership survival? Which leaves them screwed next year and beyond unless they can shift players for high transfers (Southampton). Is this correct?

 

But where do West Ham, Newcastle and even West Brom get there seemingly higher budgets from? Everton and West Ham spent over £30m each.

Edited by jackbauer24
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once bents gone thank god, that frees up a huge amount of wages. given was a ridiculous signing by that muppet mclose. 5 year contract wtf???

Haven't we been talking about freeing up wages for years? All talk of FFP and finances is pretty pointless because the bottom line is we have an owner who no longer wants to own the club.

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Yep that is a very valid point jonah. But surely even that fool lerner must realise he has to invest money to prevent us going down or he will lose a significant amount of money on the club value if we went down. Lets face it, we have been lucky there have been some real woeful sides over the years or we would have been relegated by now.

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How is Fox going to increase turnover if we are not entertaining to watch? The fans are turning away from Villa park in there droves. I think there was just over 20k at Blackpool game.

Or if you want to be positive, he know he has a core support of over 20,000 odd who will probably watch Villa  no matter how bad they are. If we never started to be entertaining again at home we should be looking at 35k+ crowds again regularly.

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Yep that is a very valid point jonah. But surely even that fool lerner must realise he has to invest money to prevent us going down or he will lose a significant amount of money on the club value if we went down. Lets face it, we have been lucky there have been some real woeful sides over the years or we would have been relegated by now.

I imagine that Lerner has concluded he can keep the club in the premier league without increasing the wage bill, and that he can keep around a 30,000 core of fans going along to watch lower half table survival week in week out.

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This season and last.

I mentioned the previous managers due to the three reasons of costs.

Everything I said was true

But last year's accounts did show a loss (I've checked now  :) ) so I don't know what you mean by saying "we haven't made losses for a couple of years".

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How is Fox going to increase turnover if we are not entertaining to watch? The fans are turning away from Villa park in there droves. I think there was just over 20k at Blackpool game.

Or if you want to be positive, he know he has a core support of over 20,000 odd who will probably watch Villa no matter how bad they are. If we never started to be entertaining again at home we should be looking at 35k+ crowds again regularly.

But we're not going to be entertaining and averaging bigger crowds without investment first. I'm not sure what fox can realistically do. I imagine more and more teams in the league are starting to make more money than us from commercial revenue.

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