By David Owen
February 28 – Relegation-threatened Aston Villa have disclosed a swingeing £68.9 million loss for the year to end-May 2019, the season culminating with a play-off victory over Derby County that took them back into the Premier League.
A statement on the Birmingham club’s website laid much of the blame on “exceptional promotion-related costs of £45.8 million”.
The statement read as follows: “Exceptional promotion-related costs of £45.8 million including a one-off £30 million contingent payment to former owner Randolph D Lerner were substantial contributory factors in the £68.9 million loss recorded in Aston Villa’s group accounts for the year ended May 31, 2019 published today.
“The club’s ultimate parent company, NSWE SCS, introduced £30 million by way of a capital injection to enable the club to settle the liability when former owner Recon Group Limited defaulted on the payment.
“The payment was made in accordance with the provisions of the purchase agreement of May 2016 between Recon Group Limited (Buyer), Randolph Lerner / Alfred Lerner Declaration of Trust (together the Sellers) and Zhejiang Ruikang Investment Co. Limited and Jian Tong Xia (together the Guarantors).
“The terms of the agreement stipulated that if Recon Group Limited and the Guarantors failed to pay the £30 million bonus due to the Sellers on Aston Villa’s promotion back to The Premier League, the Club would be liable for the payment.
“On June 6, 2019, Recon Group Limited (Hong Kong) confirmed default on the payment. The liability was settled through payment on July 12, 2019. As a result, the club made provision for a £30 million liability in the 2018/19 year-end accounts.
“NSWE SCS is wholly owned by Wes Edens and Nassef Sawiris.”
The club also revealed that turnover for 2018-19 was down £14.3 million at £54.3 million due mainly to reduced parachute payments, and that the ownership group introduced £105.7 million into the club in capital injections during the year, meaning Villa remained “debt free”.
The statement said the club could confirm that “in the three-year period ending May 31, 2019, the club complied with the EFL’s Profitability & Sustainability Rules. After promotion, The Premier League reviewed and confirmed compliance in accordance with their own policies and procedures.”
Accounts filed at Companies House show that Aston Villa Football Club Limited has reported regular losses in recent years, amounting to £32.5 million at the pre-tax level in the year to end-May 2018, £7.56 million for 2017, £29.65 million for 2016 and £57.3 million for 2015.
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