Aston Villa financial crisis – the view from an insolvency expert

Aston Villa Football Club is due to hold a meeting to discuss their current financial situation, after their owner last week paid an overdue tax bill to avoid a winding up-order from HMRC.

The payment of their tax bill is just the first in a number of difficulties the club is likely to face.

Lee Causer, Restructuring & Insolvency Partner, comments: “Avoiding a winding-up petition from HMRC was an important first step for Aston Villa, but there is still a long way to go for the management.

“Under the football creditors’ rules, other football clubs are entitled to be paid as creditors before HMRC, and Aston Villa still owes £11m to them from player purchases. This will be one of the main concerns facing the football club in the coming weeks and months.

“Reduced ‘parachute’ payments from the Premier League after their relegation two years ago will add further pressure onto their cash flow in the coming year.

“Chinese legislation makes it difficult for the owner, Tony Xia, to provide an injection of cash to fund any shortfall, which makes finding a solution to the current financial predicament even harder.’’

Mark Lamb, Head of Moore Stephens’ Football Clubs group added: “The current state of Aston Villa’s finances should be a warning to all clubs and investors in football, regardless of their size.”


Leave a comment

 Security code