Aston Villa have announced a loss of £17.7m for the year to 31 May 2012 compared with a £54m loss in 2011.
Since Martin O’Neill left, Villa have been furiously trying to slash expenses, through lower wages and the sale of their best players. Last year Villa reported a profit of £26m from the sale of players.
And that has had an impact both on the balance sheet as well as on the pitch. Consider that in the last five years Villa have sold Gary Cahill, Gareth Barry, James Milner, Stewart Downing and Ashley Young. All England inter nations.
Through the sale of the more established players in their squad, Villa were able to cut their wage bill last season by £13.8m to £70m.
Villa have attributed this reduction in turnover to a 16th-placed finish in the Premier League, fewer live TV matches, lower crowds, the average league attendance fell from 37,220 in 2010-11 to 33,873, and early exits from both domestic cup competitions.
The challenge for Villa and their owner Randy Lerner is that those wages are still high. The club’s turnover last season fell by 12.6% or £11.6m to £80m. That puts wages at 88% of turnover, completely unsustainable.
Villa seems to be setting themselves up for life in the Championship and Robin Russell, Villa’s chief financial officer, could not even spin the negative results saying:
‘Having appointed Paul Lambert as manager in June 2012, he is building a youthful, progressive first-team squad and we continue to offer our season ticket holders and supporters some of the cheapest ticket prices in the Premier League.’
In addition chairman Randy Lerner waived interest on loans totalling £107.1m made by him to Villa, which created a one-time benefit to the club of £20.3m.