Aston Villa have revealed that the club lost a staggering £111.78m in their bid to return to the Premier League last season. Fortunately for Dean Smith’s side, their attempts to reach the promised land were successful. But the repercussions of relegation this season would be severe and could send the club into a downward spiral, much like the fate that Leeds United suffered almost 20 years ago.
The most worrying statistics for fans of the Birmingham based club are that wages rose by 16 per cent to £7m, while turnover dropped by an enormous 20 per cent to £51.4m because of a reduction to their parachute payments from their previous relegation. Villa were also forced to pay former owner Randy Lerner £30m because of their promotion from the Championship.
Currently, Smith’s side are fighting for their Premier League status, sitting in the relegation zone two points from safety with a game in hand. While it is believed they will break even this year, only Real Madrid have a more significant deficit regarding money generated and spent on transfers this season than Aston Villa’s £145m. A return to the Championship could leave the Midlands club in yet another financial panic and almost certainly force them to sell their prized assets in order to balance the books, similarly to how Leeds United fell in 2002/03.
Having reached the Champions League semi-final just two seasons earlier, Leeds sold off £72.1m worth of players in an attempt to curb their overspending, including Rio Ferdinand to Manchester United which made him the world’s most expensive defender at £30m. However, the results were disastrous, sending the team into a downward spiral which culminated in relegation to League One in the space of just three seasons. The former powerhouse of English football have not returned to the top-flight since as overspending ravaged their club financially.
As shown by Aston Villa anticipating they will balance their books this term, the disparity in wealth between the Premier League and Championship is vast and falling on the wrong side of that line is a substantial issue for any club. Villa are gambling with incredibly high stakes in their pursuit to return to their former status just as Leeds United had done the early 2000s, but if it does not go to plan the consequences could be eerily similar.
