Aston Villa: Financial relief after sale of a prized asset

ASTON VILLA have had a mixed season in 2022-23; comfortably placed in mid-table in the Premier at present, but they have also sacked manager Steven Gerrard and tumbled out of the FA Cup to League Two side Stevenage on their own ground. Any hopes of building on the previous season’s campaign in which they finished 14th haven’t fully been realised, although they could finish in the top half of the Premier League, which would be some sort of progress.

From a financial perspective, the 2021-22 season saw them significantly benefit from the sale of Jack Grealish to Manchester City for £ 100 million in August 2021. Villa, after making accumulated pre=tax losses of £ 420 million between 2013 and 2021, made a small profit of £ 0.4 million in 2021-22, but it was the sale of Grealish that turned operating losses of  £ 96 million into profit. In some respects, the timing of the sale couldn’t have been better or more  appropriate for Villa. In addition, since the end of the 2021-22 financial year, their owners, Nassef Sawiris and Wes Edens, have invested a further £ 98 million in the form of share issues.

Turnover in 2021-22 went down by 2.8% to £ 178.4 million, mainly due to a fall in broadcasting revenues of 21.6% to £ 123. 2 million. In 2020-21 they totalled £ 183.6 million, but this was attributable to the greater number of games played. Matchday earnings totalled £ 16.1 million, a massive return to normality after the wipe-out of the previous covid-affected campaign. Commercial income went up by 49% to a record £ 39.1 million. Villa’s revenues have only been bettered once before, the £ 183.6 million generated in 2020-21. Unsurprisingly, Villa’s profit from player sales was also at a record £ 97.4 million, higher than the combined profits made across the past decade. 

Villa were very active in the transfer market. They spent some £ 204 million and recouped £ 103 million from sales. Among the new signings were Emiliano Buendia from Norwich City for £ 33 million, Leon Bailey from Bayer Leverkusen (£ 30 million), Southampton striker Danny Ings (£25 million) and Everton’s Lucas Digne (£ 25 million). Of these notable acquisitions, Ings has already left for West Ham United for £ 12 million. 

Gerrard was hired in November 2021 and lasted just over a year and 40 games, with a very mediocre win rate of 32.5%. Former Arsenal and Villareal coach Unai Emery was his replacement and so far his win rate is 50%.

Villa’s wage bill in 2021-22 totalled £ 137 million slightly less than the previous season, consuming 77% of income. In 2020-21, the ratio was 75%, a big improvement on 2019-20 (97%) and a pleasing development from the excesses of Villa’s championship years when wages outstripped earnings by 175% in 2019. The pursuit of Premier League football has prompted many Championship clubs to spend far more than they can ever afford. This situation is unsustainable and represents a big gamble on the part of clubs who desperately covet a place in the top flight.

Villa Park is one of the oldest stadiums in Britain and Villa enjoy strong support. Their average attendances in 2021-22 were 41,670 but the club is aiming to expand their home and take the capacity up to 50,000 through the rebuilding of the north stand, the oldest part of Villa Park. The club has a 28,000 waiting list for season tickets. 

It is well documented that Aston Villa’s golden era was the period between 1887 and 1900 when the club won five Football League championships and three FA Cups. Their last trophy was the Football League Cup in 1995-96, 27 years ago. This is the second longest period in the club’s history without a piece of silverware, the longest was between 1920 and 1957. Villa are a big club that could become a contender for  major honours on a regular basis. But in order to move up the ladder, the club has to find ways to increase its revenue streams and move turnover way beyond £ 200 million. Leicester City have shown that the Midlands, which has a plethora of medium-sized entities with loyal support, can produce clubs that win prizes. A visit to the winners’ podium is long overdue for one of football’s grand old names.

Sheffield United: There may be a new blade in town

SHEFFIELD UNITED, who are pushing for a return to the Premier League, could soon be in the hands of a new owner, a move that could help stave off a financial crisis and reposition the club for future growth.

The Bramall Lane regulars thought their club was going to be bought by American investor Henry Mauriss for £ 115 million, but the deal never materialised or got beyond the approval process. The latest interest comes from Nigerian businessman Dozy Mmobuosi, who has tabled a £ 90 million bid for the Blades. 

Sheffield United are currently in second place in the Championship and are well positioned to win a promotion place. They had a taste of the Premier League between 2019-20 and 2020-21 and last season, they finished fifth in the Championship and were knocked out out of the play-offs by Nottingham Forest.

While in the Premier, Sheffield United’s income went up from £ 20.8 million to £ 143 million in 2019-20 and £ 115 million a year later. Their last Championship campaign before promotion saw them pay out 195% of income in wages. With the enormous increase in revenues, United’s wage bill of £ 77.9 million in 2019-20 was a more respectable 54% of earnings.

The club recently admitted that the money earned from their two-year stint in the Premier has now been spent – on wages (£130m), transfer fees (£100m) and club infrastructure (£40m), and that in hindsight, more should have been allocated to the latter. 

In both 2019-20 and 2020-21, Sheffield United made pre-tax profits totalling £ 18.9 million and £ 10.3 million respectively, but cracks have appeared in the club’s finances and they failed to make a transfer instalment payment to another club. It has been reported that the club is Liverpool and it was part of the acquisition of forward Rhian Brewster in October 2020 for £ 23.5 million. It has also been reported that Prince Abdullah, the current owner, had to inject up to £ 20 million into the club and potential new owner, Mmobuosi, has paid an eight-figure sum to ensure two players, Sander Berge and Iliman Ndiaye, can stay at the club and the club could stave off the threat of administration. Both were set to be sold to ease Sheffield United’s problems. As it stands, there could be an exodus of the club’s best players in the summer if the situation fails to improve. 

The result of the Brewster affair is that Sheffield United have been placed under a transfer embargo, which applies only to the EFL, so if they win promotion, they will be free of the sanction.

Mmobuosi is 43 years of age and owns the telecom company Tingo. He is said to have a net worth of £ 7.6 billion, although the Daily Mail reported that Tingo has seen its market value collapse over the past two years. The EFL is currently examining the takeover but it could be a while before the decision around Mmobuosi’s suitability becomes public – the EFL is spending much more time on its due diligence at the moment.

Sheffield United is a big club by many standards and Sheffield remains the world’s first football city, with two sizeable clubs in United and Wednesday and Sheffield FC, the game’s oldest club. United are certainly not out of place in the Premier League, but in order to sustain football at that level, they need to find ways to grow their financial base in order to become more competitive alongside the top clubs. It’s a challenge, but maybe new ownership will transform the Blades.