Aston Villa Owner Calls for Premier League Financial Regulation Reform

Key Takeaway

• Aston Villa owner Nassef Sawiris criticizes Premier League's financial regulations as "anti-competitive" and considers legal action for reform.
• Current rules incentivize non-sporting investments and the sale of homegrown players, leading to unintended financial outcomes.
• Premier League clubs are divided on new financial regulation approaches, with trials set for next season to address spending limits.

Aston Villa Owner's Call for Reform

Nassef Sawiris, the billionaire owner of Aston Villa, has called for a comprehensive overhaul of the Premier League’s spending regulations. Sawiris, who co-owns the club with US private equity billionaire Wes Edens, criticized the current system, describing it as a “financial game” that hinders ambitious owners from challenging the established elite. He argued that the existing rules, particularly the profit and sustainability regulations, are “anti-competitive” and lack transparency. Sawiris is considering legal action against these rules, stating, “Some of the rules have actually resulted in cementing the status quo more than creating upward mobility and fluidity in the sport.”

The Premier League, known for its global viewership and substantial TV revenue, has attracted significant investment from private equity firms, sovereign wealth funds, and billionaires. However, the dominance of Manchester City, which has won four consecutive titles and faces 115 allegations of financial rule breaches, has sparked debate over the league’s competitiveness. Other clubs like Everton and Nottingham Forest, which have faced points deductions for financial losses, have also voiced their discontent with the current regulations.

Financial Incentives and Perverse Outcomes

Sawiris highlighted that the rules limiting club losses over a three-year period have led to unintended consequences. These regulations, intended to prevent reckless spending, have encouraged clubs to invest in non-sporting ventures like music venues to boost revenue or to prioritize the sale of homegrown players to maximize accounting profits. “Managing a sports team has become more like being a treasurer or a bean counter rather than looking at what your team needs,” Sawiris said. “It’s more about creating paper profits, not real profits. It becomes a financial game, not a sporting game.”

Aston Villa, which finished fourth in the Premier League and qualified for the UEFA Champions League, has been losing money despite increasing revenues. The club reported a net loss of approximately £120 million for the 2022-23 season. Sawiris and Edens initially purchased a 55% stake in Villa for £30 million in 2018, rescuing the club from financial crisis and achieving promotion to the Premier League. The club's valuation exceeded £500 million following a capital increase funded by US investor Atairos.

Proposed Changes and Divided Opinions

At the Premier League’s annual meeting in Harrogate, clubs agreed to test two new financial regulation approaches next season. One approach limits spending on players to 85% of revenue, while the other links spending to the income of the bottom-ranked team. These changes will be trialed alongside the existing profit and sustainability regulations. However, team owners remain divided on the best path forward. Some advocate for tighter rules to prevent the richest clubs from driving up costs, while others seek more spending flexibility to remain competitive.

Sawiris criticized the financial regulations that incentivize the sale of homegrown talent, arguing that they penalize clubs' loyalty to their young players. Selling an academy player, valued at zero in the books, allows a club to book an immediate profit, which can then be spent on new players with the cost spread over several years. “This obvious flaw is to the detriment of the fans,” he said. The spending rules, designed to prevent clubs from going bust by limiting losses to £105 million over three seasons, have not kept pace with inflation since their introduction in 2013. Sawiris also described the penalty decision-making process as “opaque and . . . seemingly arbitrary.”

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