Aston Villa have likely secured a new borrowing facility because the finances of a Premier League team are inherently volatile throughout the season.
That is the view of finance guru Kieran Maguire, speaking exclusively to Football Insider about Villa’s new arrangement with Barclays.
Birmingham Live reported last Thursday (28 July) that Villa have struck an agreement with the bank for the new borrowing facility.
The deal is secured against future TV and matchday income, and its exact parameters are not outlined.
Villa co-owners Wes Edens and Nassef Sawiris are among the most independently wealthy owners in the Premier League.
Maguire explained why Villa would opt to go to a private lender rather than their chief financiers.
“It gives the club flexibility,” he told Football Insider’s Adam Williams.
“The fact that it is a borrowing facility rather than a loan could be because football has fixed costs on a monthly basis in terms of wages and so on whereas its revenues are volatile.
“During months like October and November, clubs actually have very little revenue coming in. The majority of ticket sales are season tickets and most people who are going to buy the shirts have already done so.
“The sponsors have paid in advance as well, as has the Premier League to Sky. There are a few times per year when you want that flexibility.
“There might be a couple of days per year where you’re overdrawn and in that case, it makes sense to go to a bank rather than the owners. If you’ve got an overdraft facility, you try and use it only a couple of times per year.”
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By: Kieran Maguire
Title: Kieran Maguire: Aston Villa in ‘volatile’ financial situation as new funds secured
Sourced From: www.footballinsider247.com/aston-villa-situation-is-volatile-as-new-funds-secured/
Published Date: Fri, 05 Aug 2022 09:39:33 +0000
