This article analyses Aston Villa finances in respect of the 2020/21 season.
Season Review
Aston Villa competed in the Premier League for a second consecutive season for the first time since 2015/2016. The Villains finished 11th in the Premier League, concluding a solid season. In the cups, Aston Villa exited at the third and fourth rounds of the FA and Carabao Cups respectively.
The club performed well financially in the 2021 season compared to the previous season, however losses of £37m (2020: £99m) were still high and required further owner funding.
Aston Villa Finances – Revenue
Aston Villa saw total revenue rise considerably. Revenue rose from £110.3m to £183.6m (66%), driven by the deferral of 2019/20 broadcast revenue.
Matchday
Matchday revenue fell from £11.1m to £0.3m (-97%). This was due to most of the season being played behind closed doors. The club has stated it missed out on £17.5m of matchday revenue in 2021 due to COVID-19.
However, it is safe to expect an increase of this stream of revenue with the return to full stadia.
Broadcast
Broadcast revenue rose by £79.4m (102%), increasing from £77.7m to £157.1m. This was driven by the club recognising some of its 2019/20 broadcast revenue in 2020/21 due to its financial year ending on 31 May 2020, meaning 10 Premier League games were played in the 2021 financial year.
As a result of the broadcast revenue deferral, broadcast revenue will fall significantly in 2022 back to a ‘normal level’.
Commercial
Commercial revenue rose by £4.7m, from £21.5m to £26.5m (22%). The Villains stated that commercial revenue would have been £4.8m higher without COVID-19 and will be hoping to capture some of this growth in 2022.
The club also has its shirt (Cazoo), kit (Kappa) and sleeve (OB Sports) deals expiring at the end of the 2021/22 season, bringing commercial growth opportunities.
Aston Villa Finances – Revenue summary
It was a record revenue generating season for Aston Villa. However, this was driven by the broadcast revenue deferral resulting from disruptions to the 2019/20 season. 2022 revenue will fall back towards a normal level but provides a platform for future growth.
Aston Villa Finances – Operating costs
Operating costs increased by £24.2m, a 17% increase from the 2020 season (£145.1m) to £169.3m. This was driven by an increased wage bill as investment continued.
Wages
Aston Villa’s wage bill increased from £108.8m to £137.8m (27%). Despite this inflation, the wages to revenue ratio decreased (from 99% to 75%) due to the considerable increase in the club’s revenue. This will however reverse next season given the anticipated revenue decline (without broadcast deferrals).
The upward trend in wages highlights the club’s desire to be more competitive and consistently achieve top half finishes.
Other costs
Other operating costs fell from £33.9m to £28.7m (-15%) due largely to matchday cost savings.
Aston Villa Finances – Operating costs summary
Aston Villa has invested heavily in its playing squad to improve its competitiveness. This has resulted in large increases in its wage bill which it hopes will pay off in greater domestic performances.
Aston Villa Finances – Transfers
As far as net transfers go, Aston Villa had a net transfer spend of £88.7m. The club spent £91.2m on transfers and received just £2.5 million. The most notable signings were Ollie Watkins (£28m); E. Martínez (£14.5m) and B. Traoré (£15.4m).
Amortisation
Despite significant spending, amortisation of player rights decreased by £14.5m (-21%) to £56.1m. Having spent £117m in 2021/22, amortisation is likely to rise.
Profit on player sales
Aston Villa’s profit on player sales remained minimal at £1.6m due to limited player sales. The club-record sales of Grealish will see this figure rise to over £100m, increasing the club’s income considerably.
Transfer debtors / creditors
Aston Villa does not disclose transfer debtors / creditors in its accounts. However, trade debtors / creditors can be used as a proxy. Please note some of this will not relate to transfers so is likely overrated.
Trade debtors stood at £8.4m at 31 May 2021, while creditors stood at £80.8m, a net creditor position of £72.4m, in-line with the high net spends in recent times. The sale of Grealish may reverse this, however the majority of this sale seems to have been reinvested.
Aston Villa Finances – Transfers summary
The Villains have shown considerable ambition with its spending and appointment of Steven Gerrard. The sale of Grealish enabled further investment and the club will now be hoping its spending is vindicated by the club’s performances and future player sales.
Aston Villa Finances – Profitability
Aston Villa incurred a loss of £37m for 2021. The club has incurred significant losses in recent years which has required significant owner funding.
Operating profit / loss before player trading
Before player trading, Aston Villa recorded an operating profit of £16.8m. In contrast, it had an operating loss of £31.6m in the year before (2020). This equates to a positive change of £48.4m (-153%). This was driven by the broadcast revenue deferrals and will reverse in 2022 as a result to either a break-even or loss position.
Operating profit / loss after player trading
After player trading, Aston Villa recorded an operating loss of £38m. Compared to the £100.3m loss in 2020, there was a decrease of £62.2m (-62%). This was also driven by broadcast revenue, but also the decline in player amortisation. The sale of Grealish will more than offset decline in revenue, and likely resulting in an improved position in 2022 (but likely still a loss).
Profit / loss before tax
Before tax, the club’s loss fell from £99.5m to £37.3m (-62%) — a positive change of £62.1m.
Aston Villa Finances – Profitability summary
Once again, the data shows that the club is making a big investment, namely in its squad. In fact, the operating profit margin before player trading is 9%, whilst the operating profit margin after player trading is -20%. Aston Villa will require a return on its investment in the near future or the continued deep pockets of its owners.
Aston Villa Finances – Assets / Liabilities
When it comes to net assets, Aston Villa went from £115m in net assets, in 2020, to £175m in net assets, in 2021. This highlights the investment made by the owners.
Cash flow
Aston Villa’s cash reserves fell from £20m to £13m. This was mainly driven by cash inflows from financing activities (£96.9m), which largely absorbed cash outflows from operations (£0.7m), player transfers (£85.8m) and capital expenditure (£4.2m).
Debt
Aston Villa had net cash of £15m. Despite the costs caused by the pandemic, Aston Villa’s operating loss and capital investments were financed from shareholder equity (not debt). The club has limited debt as a result of its owners’ deep pockets, who have invested over £220m in just the past two seasons.
Aston Villa Finances – Final Remarks
Aston Villa has ambitious plans for the future, highlighted by its appointment of Steven Gerrard and significant transfer spending, epitomised by attracting Coutinho to the club. It remains to be seen whether this investment will pay off, with the club still operating in mid table / the bottom half.
Aston Villa will likely require continued investment from its owner in the next couple of years to avoid the need for significant player sales, so the continued commitment of its owner will be vital to its financial stability.
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