Tottenham Hotspur’s 2-0 defeat to Manchester City means Aston Villa have secured fourth place and qualified for next season’s Champions League. It is a seminal milestone in Villa’s recent history, a mark of Unai Emery’s influence and will bring broader benefits to the day-to-day running of the club.
It has come at the just the right time, too, for the progression of the team on the pitch and as a way of mitigating some of the growing financial constraints they are facing.
But just how much is Champions League football worth to Aston Villa? The Athletic explains here.
When Villa released its latest set of financial accounts, the reliance on Emery and his players to reach new heights was underlined. For a club that had not participated in Europe in 13 years before qualifying for the Europa Conference League last season, it appeared unusual to be so dependent on finishing in the top four this time around.
However, the £119.6million ($149.8m) incurred in losses post-tax was the standout, concerning figure. It has served to be a delicate financial act, with Villa juggling aspirations on the pitch and financial compliance off it. Broadly speaking, strategy centres on managing concerns around profit and sustainability rules (PSR).
Although Villa stated the post-tax loss fell in line with “the strategic business plan” and that it “operates within the Premier League’s PSR”, off-field decision-makers, such as president of business operations Chris Heck, have made concerted attempts to increase revenue streams hastily.
From a footballing viewpoint, Villa sold promising youth talents last summer while retaining buy-back clauses. This ensured they banked pure bookable profit that could go into their financial accounts while keeping a form of influence over players’ futures.
Champions League riches will add to the revenue pot for the next set of accounts and help alleviate the pressures of breaching PSR, which Villa have been dangerously straying towards. Last month, NSWE, Villa’s ownership group, appointed Bjorn Schuurmans as a secretary. Schuurmans is a lawyer by trade and has worked in tax and structuring at other companies. This area of expertise, ostensibly, will be relied upon in managing this summer’s finances.
Villa Park has been rocking in Europe this season (Michael Regan/Getty Images)
Villa’s wages-to-turnover ratio — the percentage of money spent on employees’ salaries — stood at 89 per cent in 2022 and 2023, the fourth highest in the Premier League. It is a concern, though, that the three clubs above were Leicester City, Nottingham Forest and Everton, all of whom have breached PSR rules and are in varying processes of being sanctioned.
It is what made the yearn for Champions League football at Villa Park next season so pressing. Not only did it stand as a monumental achievement and further evidence of Emery’s brilliance, but it pulled the club out of the deeper depths of PSR ramifications. In short, Villa’s qualification will bring an immediate cheque for £16.02m, an increase from the £13.44m teams received for entering Europe’s blue-chip competition this season.
Next campaign’s Champions League will introduce a new format, with a 36-team league phase. Overall, £372million in prize money will be distributed, boosted by the sharp climb in the number of games. There will be 189 fixtures — 64 more than the previous competition structure and with a guarantee of one more home game in the league phase.
In short, more games means more money and, considering Villa generated £18.76m from gate receipts last season — revenues generated by the sale of matchday tickets — this is particularly relevant when increasing broader areas of revenue.
Each of the 36 clubs will be ranked by an average of the two calculations. One share will be given to the last-ranked club and all the way through to the 36 shares given to the top-ranked club.
Carved up, the prize pot is forecasted to be worth around £2.13billion, again a rise from the £1.75bn this season, representing around a 22 per cent revenue increase.
Every win in the league phase is expected to bring £1.81m, with a draw worth £603,000. As with the Premier League’s distribution of wealth, the higher up the table you finish, the more money you get. This will range from £8.61m for the top team, while clubs in the top eight will receive an additional £1.72m as a bonus for qualifying for the knockout stages, with £860,000 going to those from ninth to 16th.
Money will be split four ways: 30 per cent in performance-related fees, 25 per cent of total revenues in participation fees, 15 per cent for a ‘market pool’ (the value of TV rights sold in a club’s country) and another 30 per cent in a club’s 10-year coefficient calculation.
Villa are ranked 81st in the UEFA coefficient, having failed to improve on that standing after they were knocked out in the Europa Conference League semi-finals by Olympiacos.
Olympiacos knocked Villa out of the Conference League at the semi-final stage (Naomi Baker/Getty Images)
Crucially, though, Villa’s revenue streams will be augmented by its growth in reputation and place in the Champions League. Sources who share existing knowledge of recent deals — and spoke on the condition of anonymity — have told The Athletic that commercial agreements with Villa include ‘kickers’. This means the club will receive additional revenue due to reaching the top four.
Other recent commercial partnerships, such as with new front-of-shirt sponsor Betano, have incentivised clauses: Villa will unlock a new amount of sponsorship money from the betting company upon qualification. The same is true with existing shirt sleeve sponsor Trade Nation, with Villa using its better position to negotiate a more lucrative agreement for next season.
In February, The Athletic learned that Villa had attempted to extract itself from its initial agreement with their previous front-of-shirt sponsor, Asian gambling company BK8, seeking a more lucrative contract that would help drive revenue and comply with PSR.
At the time, Betano, despite multiple attempts to speak to those responsible, did not respond for comment. The new deal is a respectable increase on the pre-existing agreement with BK8 and will be on Villa’s kit for the 2024-25 campaign, alongside kit manufacturer Adidas. Villa cut ties with previous kit manufacturer Castore a year early.
Despite the heavy losses incurred, Villa’s 2022-23 revenue increased to £217.7million, up from £178.4million in the previous year. This is expected to rise again, factoring in Conference League participation as well as Champions League qualification.
“The baseline, ballpark sum for an English club is a minimum £50million,” Dr Dan Plumley, a sports finance expert and lecturer at Sheffield Hallam University, told The Athletic.
“That’s the sum we’ve usually attached to Champions League qualification, but there will be scope for more next season. It’s going to be more lucrative because of changes to the distribution and the English clubs will continue to win because of their position in the market pool.”
Villa’s Champions League qualification puts a flag in the sand of the Emery era. Off-field figures share the view that his coaching has lifted several departments across the club, who now all need to play catch-up in matching the elevated standards on the pitch.
It is specifically because of Emery and his players that Villa will have access to greater riches — allowing them to ease PSR fears and benefit those responsible for managing the club’s budget in the years to come.
(Top photo: Michael Regan/Getty Images)
Read the full article here