Football
Villa owner considering legal action over Premier League spending rules
![Villa owner considering legal action over Premier League spending rules Villa owner considering legal action over Premier League spending rules](https://cdn.theathletic.com/app/uploads/2024/06/11061033/GettyImages-1956017548-scaled-e1718100659225.jpg)
Aston Villa owner Nassef Sawiris says he is considering taking legal action against the Premier League’s profit and sustainability rules (PSR).
In an interview with the Financial Times, Sawiris — Egypt’s richest man — said the regulations, which place a limit on the amount clubs are able to lose across a three-year period, “do not make sense” and “are not good for football”.
Villa had a proposal to raise the maximum permitted losses from £105million to £135million rejected at the Premier League’s annual general meeting last week.
Sawiris, who called PSR “anti-competitive”, said he was seeking advice over the prospect of taking legal action against them.
“Some of the rules have actually resulted in cementing the status quo more than creating upward mobility and fluidity in the sport,” he told the Financial Times in an interview. “The rules do not make sense and are not good for football.”
He added: “Managing a sports team has become more like being a treasurer or a bean counter rather than looking at what your team needs.
“It’s more about creating paper profits, not real profits. It becomes a financial game, not a sporting game.”
Premier League clubs have, however, agreed to trial a new financial system next season, including a cap on spending to replace PSR from the 2025-26 season.
The Premier League said in a statement: “Clubs agreed to trial an alternative league-wide financial system next season on a non-binding basis. The existing PSR will remain in place, but clubs will trial squad cost rules (SCR) and top to bottom anchoring rules (TBA) in shadow.
“This will enable the league and clubs to fully evaluate the system, including the operation of Uefa’s equivalent new financial regulations, and to complete its consultation with all relevant stakeholders.”
Everton and Nottingham Forest were given points deductions last season for breaching the £105m limit. In March, Villa reported a loss of £119.6m ($152m) after tax in the year ending May 31, 2023.
The Athletic reported last week that champions Manchester City had begun a separate legal case against the Premier League’s associated party transaction (APT) rules.
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Analysis by Jacob Tanswell
For the past 18 months, there has been the inescapable feeling internally that Aston Villa would need to move on a first-team player for substantial profit if they intend to continue spending in line with performance on the pitch and to stay on the right side of PSR.
In the recent set of financial accounts, Villa reported a loss of £119.6m ($152m) after tax in the year, compared to the marginal profit of £300,000 from 12 months prior.
It is delicate financial act, with Villa juggling on-pitch aspirations and financial compliance off it. Strategy centres on managing concerns around PSR with NSWE, Villa’s ownership group, appointing Bjorn Schuurmans as a secretary. Schuurmans has worked in tax and structuring at other companies and will be relied upon in managing this summer’s finances.
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.
Concerningly, the three clubs above them were Leicester City, Nottingham Forest and Everton, all of whom have breached PSR rules and are in varying processes of being sanctioned.
Villa feel PSR sanctions are restrictive and impede upwardly mobile clubs from regularly competing among the elite and why they proposed the idea to increase PSR losses, only for one other Premier League club to vote in favour.
(Photo by Zac Goodwin/PA Images via Getty Images)