Sign up NOW for our daily Villa newsletter direct to your inbox Subscribe Thank you for subscribing We have more newsletters Show me See our privacy notice Invalid Email

There is a mixture of excitement and trepidation about the arrival of new sugar daddies to help tidy Aston Villa's financial mess.

But even though Nassef Sawiris and Wes Edens are now on board to help rescue Tony Xia, there are limits over what the latest money men can actually spend.

Here we take a closer look at what the timely injection of cash does for Villa's immediate prospects following the threat of administration.

What it means for the club, Xia and the new power duo in terms of Financial Fair Play (FFP).

And what it means for the future of Jack Grealish and Villa going forward in the transfer market.

Okay then, here we go. Stick with me, while I attempt to explain...

WHAT DOES THE NEW INVESTMENT MEAN FOR VILLA'S CASHFLOW CRISIS?

The new investment from Sawiris and Edens means, most importantly, that the first major issue has been solved.

The first major issue was that Villa didn't not have enough money to keep ticking over from month to month. Hence the concerns of the taxman and fears over wages not being paid.

Now they should have a steady flow of cash to pay HMRC and fulfil their PAYE obligations each month, without the alarming hand-to-mouth existence of the post-May 26 Wembley woes.

They are no longer under threat of administration.

However, the spectre of FFP is never far away.

ARE THE NEW MONEY MEN STILL HAMSTRUNG BY FFP?

Yes. They face the same constraints as Xia.

They will inherit the historic overspend caused by the Xia regime. However much they are worth - and early indications are that they do have financial clout - their hands will be tied over how much of it they can plough into Villa.

Put bluntly the club have been losing too much money after gambling on getting the very heft Premier League pot of cash.

FFP doesn't allow such losses - which we'll go into in more detail in a moment - and has sanctions in place for those who fall foul of their regulations.

WHAT'S THE THINKING BEHIND FFP?

In a nutshell The FFP rules are to ensure that clubs become more self-sustainable by breaking-even in the medium to long term. UEFA, the Premier League and the English Football League all have different regulations setting out the acceptable losses that clubs are able to make in order to avoid being sanctioned.

The assessment is carried out each March, so Villa's next assessment will be March 2019.

By March 1 of each season clubs also have to submit a financial projection for the remainder of that season.

HOW MUCH CAN A CLUB LOSE?

Under 'Profitability and Sustainability' rules Championship clubs can lose a maximum of £13 million before tax each season.

This is calculated over a rolling three year period, the previous two seasons and the current or forthcoming season.

So over a three-year period - 2016-17, 2017-18 and 2018-19 they can lose a total of £39 million - if these losses are covered by an owner.

For simpletons like me, that means that an owner can plough in £39 million of his own money.

The lower loss threshold for EFL clubs is £5 million per year before tax, or £15 million over three years.

ARE THERE ANY HIDDEN WAYS AROUND THESE LOSSES?

Still awake? Okay, let's continue...

It's not exactly hidden, but the upper loss threshold can actually be higher than outlined above, because of the following rule.

Clubs are permitted to exclude some costs, including money spent on youth development, charitable community activity and women’s football.

Finance expert Kieran Maguire, senior teacher in accountancy at University of Liverpool, told BirminghamLive that for a club of Villa's scale this could be as much as £8 million per year.

So, add that £24 million across three years to the £39 million figure and that would make a loss of around £63 million over a three year period permissable.

HOW MUCH HAVE VILLA LOST?

Possibly around £65 million over two years. Bear with me...

During the first year of the Xia regime - the 2016-17 season - Villa posted a loss of £14.5 million.

The accounts pertaining to that season are the latest available set of official figures.

Losses for last season - 2017-18 are not available - but financial expert have predicted the figure could be more than £50 million.

That would mean a combined loss of around £65 million across the previous two years.

Such a shortfall would mean they would need to somehow have to break even in year three (2018-19) to fall back in line with the maximum £63 million (£39 million loss allowed plus approximately £24 million from excluded costs).

That would represent a £50 million turnaround next season from last season's bleak picture.

WHAT ABOUT PARACHUTE PAYMENTS?

Will parachute payments, the sums paid to club relegated from the Premier League to soften the financial blow of demotion to the Championship, help?

Yes and no. Villa are in the third year post relegation so still qualify for a third and final payment.

However, in actual fact, Villa's revenue will take a hit next season as the parachute payments decrease. The £33 million they banked last season is reduced to £15m in 2018-19.

PAY ATTENTION THIS IS THE GREALISH BIT (VERY SOON) - I KNEW WE'D GET THERE EVENTUALLY

HOW DO VILLA RECOUP THE DEFICIT?

Boosting revenue, cutting costs or selling assets are the ways to recoup the deficit and fall in line with FFP rules.

Boosting revenue

Boosting the revenue would mean finding new commercial opportunities and/or sponsorship deals, but these could not be inflated to the levels of cash Villa need and must represent fair market value.

Broadcasting cash represents a huge chunk of income, although the amount in the Championship ios dwarfed by the Premier League riches on offer to top flight clubs.

Cutting costs

The most obvious ways to cut their costs is to reduce the wagebill of the squad. This was around £50 million last season and even though higher earners such as John Terry and Gabby Agbonlahor are now gone (along with a series of loanees' salaries), going forward into next season this would still represent one of the biggest in the Championship.

Still it's a start.

Selling assets

Selling assets then... Let's face it, this means cashing in on their most marketable players.

Grealish is the boy wonder who could bring in the biggest fee.

It's a depressing update, I'm afraid, but according to Maguire, selling the floppy-haired crown jewels does still represent the quickest way of stumping up the cash towards the £50 million FFP blackhole.

Let's say Villa get £25 million for Super Jack, and could bank another £10 million for James Chester and the same again for Jonathan Kodjia.

Add that £45 million (of course we're estimating here, fact fans) pot of transfer proceeds to the savings on wages we spoke about earlier and we're getting closer.

SO IS THERE ANY WAY THE ARRIVALS OF SAWIRIS AND EDENS WILL AFFECT THE GREALISH SITUATION?

Well the desperation of yesterday - before the investment came in - has been replaced by a 'slightly' calmer position for the club.

They don't need to accept a cut price Daniel Levy-style opening gambit for Grealish because the immediate bills that needing paying can now be paid.

They have a stronger bargaining position and can (hopefully) push the Grealish pricetag higher.

It remains to be seen how good their negotiations are but if James Maddison went from Norwich to Leicester City for £23 million, surely Grealish is worth that or more?

ARE THERE ANY ALTERNATIVES TO FLOGGING JACK?

I hope so, I really do. But it looks unlikely. Unless a joint offer of £30 million for Micah Richards and Ross McCormack comes in from Blues!

Apologies, I jest. I know this is a serious matter. I just thought the FFP ramblings might need some light relief.

Where were we?

Any other solutions other than selling Grealish?

We're told there are no loopholes allowing the main money men to invest more. Not to the extent Villa would need to offset player sales anyway.

Birmingham City have named St Andrew's Trillion Trophy Stadium, but such arrangements cannot be done on a massive scale.

Video Loading Video Unavailable Click to play Tap to play The video will start in 8 Cancel Play now

Like we mentioned above, such deals must represent fair market value.

For example if the going rate for the naming rights at Villa Park was £5 million, you couldn't wriggle round it by selling them for an inflated £100 million.

Providing a major cash injection and disguising it as a sponsorship, or naming rights deal, is not allowed, I'm told.

For the FFP rule to have credibility (and the jury is out on that 'credibility' there can be no such large scale ways round it).

WHAT ABOUT SIGNING PLAYERS?

The situation obviously leaves Villa with very limited wiggle room to buy players.

They have a wagebill they want to get down and do not want to incur the costs of fresh transfer fees.

In recent weeks talks of loans and free transfers has been doing the rounds.

It's hard to see how today's developments massively change this bargain-bucket-budget recruitment until Villa are on an even keel.

WHAT HAPPENS IF VILLA SAY 'STUFF IT, WE'LL FAIL TO COMPLY WITH FFP AND TAKE THE PUNISHMENT'?

Firstly it's worth pointing out I have been advised this is not a route down which Villa want to stray.

Any punishment for breach of the rules will be determined by an independent panel (the Fair Play Panel).

Maguire tells us that clubs breaching the rule who are subsequently promoted - for example Bournemouth - tend to be fined.

Clubs breaching it and staying in the same division tend to be hit with a transfer embargo.

The sanction of deducting points is open to the FFP bods, but so far there is no precedent for this, as far as we know.

WHAT HAVE VILLA SAID ABOUT FFP?

Days after Villa's play-off final misery at Wembley, Xia issued a statement including his thoughts on the club's FFP situation.

"We have been heavily investing for the past two seasons.

"However, the loss on Saturday means that we need to change a lot of things.

"No one wanted to see the club have to go through this, but I believe that only changes can help the club to progress towards the positive direction and this requires the joint efforts of everyone associated with this great football club.

"No matter what the changes will be, I sincerely hope that everyone can unite and overcome the challenges together."

poll loading Aston Villa fans, do you want Tony Xia to remain at the club? 13000+ VOTES SO FAR Yes, he still has a part to play No, his time is up

More tellingly he had this to say in his epic 15-point, 830 word statement (points 6, 7 and 8 in case you were wondering)

"FFP is a burden and we need to work within the defined parameters over the course of the next 12 months and beyond and as we have done in the previous 12 months

"To be clear, to meet FFP we need to player trade. No shareholding sale of any size will contribute to meeting FFP. We must reduce costs and increase revenue.

"Selling any size of shareholding in the club will not aid in respect to FFP."

So, in short, that means the arrival of the new money men does not change that, as we suggested above.

Video Loading Video Unavailable Click to play Tap to play The video will start in 8 Cancel Play now

IN CONCLUSION WHAT HAVE YOU GOT TO SAY FOR YOURSELF?

Please feel free to get in touch to query any parts of this piece (mat.kendrick@reachplc.com). I am no financial expert, but have tried to simplify this as best I can.

I struggle with teamsheets, let alone balance sheets, but from the information I have been able to glean and the specialists I have spoken to the situation, as it stands right now, is this:

Is the situation still bleak? Yes, but not as bleak as yesterday.

Does Jack Grealish still have to be sold? Yes, more than likely unless another super solution can present itself.

Can the new money men spend what they want? No, tighter FFP rules mean there can never be a Roman A-Brummie-vich.

Will Aston Villa remain in existence. Yes, Aston Villa will never die.