Aston Villa braced for £62m FFP payout, could wipe out Champions League cash

Aston Villa braced for £62m FFP payout, could wipe out Champions League cash

The Villans could end up paying out up to £62 million in a development that could affect their financial fair play quota maximum next season.

Villa, who finished their season with an unusual 5-0 defeat against Crystal Palace,

have qualified for the Champions League in 2024-25 following an impressive season of improvement.

Unai Emery will have delighted owners Nassef Sawiris and Wes Edens with this amazing achievement,

which is expected to be worth more than £60 million next season.

However, while Villa are on track to break their club turnover record as a result of their achievements,

Champions League qualification entails both costs and money.

Villa might pay up to £62 million in incentives and add-ons.

According to Villa’s official accounts, the club’s maximum performance-related bonus and add-on payout is £62 million.

The amounts, which are detailed in the ‘contingent’ liabilities section of the financial statement,

consist of payments made to their own players and other teams via transfer clauses.

In actuality, the result will be slightly lower than that because not all performance-related conditions will have been met.

However, Villa’s exceptional results this season suggest the true figure will be close to £62 million.

How does Villa’s bonus structure compare to that of other Premier League teams?

Villa’s contingent liabilities have increased by over 700 percent from £9 million three seasons ago.

Everton is another oddity. Their contingent liabilities total £105 million, however unlike Villa,

the vast majority of that amount is believed to have gone unpaid.

Financial fair play: Can Villa spend much in the transfer market?

Villa are on track to generate approximately £300 million in revenue next season.

Nonetheless, financial fair play (now known as Profit and Sustainability Rules, or PSR) limits their capacity to compete with the transfer market’s wealthiest players.

According to Off The Pitch analysis, Villa’s recent spending has resulted in a PSR deficit ranging from £67 million to £107 million.

That figure is based on the squad cost control ratio and financial anchoring mechanism that

the Premier League intends to implement at their upcoming AGM in June.

However, because Villa will not reveal their 2023-24 accounts for some time,

the calculation used utilises 2022-23 data to assess Villa’s fitness to comply with the new financial fair play standards.

The additional cash they will generate from the Champions League,

as well as their two new £20 million-per-year contracts with Adidas and Betano, will give them some wriggle room in the summer.

However, player sales will also be required if Emery is to have full control over the window.

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