Why Aston Villa and Everton want to sell to each other

The overwhelming theme of this summer’s Premier League transfer window will be clubs adhering to Profitability and Sustainability (PSR) rules.

Teams straying dangerously close to violating the PSR are looking for ways to stay within spending rules and avoid points penalties next season, while at the same time trying to expand their rosters this summer.

Inter-player transactions – where players move between clubs in opposite directions but are treated as separate deals – have become increasingly important. For example, Lewis Dobbin may go from Everton to Aston Villa and Tim Iroegbunam is expected to go in the opposite direction.

Such deals are seen as one of the best ways to balance the books because purchases are amortized over several years, while the full amount for each sale is recognized in the year it occurs – the next PSR deadline is June 30 .

Confused? The Athletics‘s Aston Villa and Everton writers Jacob Tanswell and Patrick Boyland explain…

Why do the clubs do this?

Tanswell: There was an inescapable feeling that Villa would have to sell a key player, with the need becoming more urgent after Villa’s latest set of accounts, which reported a loss of £119.6 million ($152 million) after tax in the year ending May 31 . 2023. This was a sharp decline from the marginal gain of £300,000 twelve months earlier.

Worryingly, Villa’s wage bill in 2022-23 was 89 percent of total revenue, the fourth highest in the Premier League. The three teams that scored higher were Leicester City, Nottingham Forest and Everton, all of whom have broken PSR rules and are in various processes to be sanctioned.

It stings among Villa’s seniors that a big sale is needed to attract players of the caliber suited to a first Champions League campaign. Last month, Villa’s proposal to increase the maximum allowable losses over three years from £105m to £135m was rejected at the Premier League’s annual general meeting.

Only one club was in favor of Villa’s idea, while three abstained. Villa views the PSR sanctions as restrictive, preventing upwardly mobile clubs from regularly competing with the elite.

NSWE, Villa’s ownership group led by Nassef Sawiris and Wes Edens, has appointed Bjorn Schuurmans as secretary. Schuurmans has worked at other companies in the tax and structuring sector, where he was able to rely on his skills to manage this summer’s finances.

Tim Iroegbunam, left, plays for Villa in February (Clive Mason/Getty Images)

Boyland: Everton entered the summer looking to do business to improve their PSR position after two successive breaches. They lost £89m in the 2022-23 season alone, before the usual allowable deductions for PSR, such as spending on academy and women’s teams and community work.

Careful not to infringe a third time, the expectation was that they would sell before the June 30 deadline.

Rather than forcing the quick departure of key assets such as Jarrad Branthwaite or Amadou Onana at below market value, Everton’s approach has been to prioritize the sale of academy graduates or those who are on the fringes of manager Sean Dyche’s organization.

They have tried to work with other clubs facing similar problems, including Villa, with deals for Dobbin, 21, and Iroegbunam, 20, the logical product of that process. Villa have also expressed an interest in Onana, alongside a host of other clubs in the Premier League and Europe.

What are the financial benefits?

Boyland: Everton believes the sale of Dobbin is crucial to ensuring compliance with PSRs. The exact fees are yet to be announced, but one thing is certain: Everton and Villa will leave after strengthening their PSR position.

As two former academy players, Dobbin and Iroegbunam’s book value was negligible, meaning their sales represent pure profit in PSR terms.

In a hypothetical scenario where both players were sold for £10 million each and signed four-year deals, the selling club could show an income of £10 million in their accounts for 2023-2024 as a result of the transaction. From an accounting perspective, the purchasing club spreads the fee over a long-term contract, charging a much smaller fee each year. In the example given, this would be an amount of £2.5 million on these accounts.

The sad and somewhat perverse reality is that this is what makes selling academy graduates so attractive under PSR rules. A financial system that is meant to be about sustainability actively encourages these kinds of things.

These types of deals have become a key part of Everton’s business in recent years, even though they have already failed PSR twice. This year’s accounts will show the sales of Dobbin to Villa – if it goes ahead – and Tom Cannon to Leicester City. Two other academy graduates, Anthony Gordon to Newcastle United and Ellis Simms to Coventry City, were also sold in previous seasons for a combined fee of around £50 million.

Dobbin after scoring for Everton last year (Peter Powell/AFP/Getty Images)

Tanswell: Transactions between players are a key part of Villa’s thinking during this transfer window. Normally, for example, Douglas Luiz’s total value would be higher than what Juventus could afford to pay, so Villa have instead centered discussions on cash plus at least one player from the start of this month. Initially, USMNT international Weston McKennie was in talks with England. Under-21 winger Samuel Iling-Junior, but alternative midfielders for McKennie are now in question.

Player exchange deals are two separate transactions, but are useful to PSR. The amortization process is highlighted in Villa’s agreement to sign Ian Maatsen for over £35m, with the fee not an issue this season as Villa spread the cost of the payment over several years.

Iroegbunam signed from West Bromwich Albion as an 18-year-old in 2021, so he was bought for a minimal court fee and will be worth a hefty profit.

Time is of the essence. To register for the next set of accounts, sales must be confirmed by June 30. A similar idea has been attributed to Villa’s interest in Conor Gallagher, with Chelsea, the selling club, interested in Villa striker Jhon Duran or a younger academy graduate who could be used as a bargaining chip in discussions.

Mitigating PSR’s threat started last summer, when Villa’s academy players were used as assets. Aaron Ramsey (£14m to Burnley), Jaden Philogene (£5m to Hull City) and Cameron Archer (£18.5m to Sheffield United, although he has returned after their relegation) were sold, with Villa retaining buyback options and, in Philogene’s suitcase, also a matching option. Funds needed to be raised and young players were released rather than lose key first team players.

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How would Dobbin fit in at Villa?

Tanswell: Villa are looking to add a genuine winger this summer to correct their lack of pace in wide areas last season. Towards the end of the season, manager Unai Emery used Moussa Diaby as a striker just ahead of Ollie Watkins, meaning Leon Bailey was the only traditional winger available.

He is most comfortable on the left wing, but Dobbin can play across the front line. As demonstrated with 21-year-old Morgan Rogers, Emery is keen to mold young attacking talent as he believes Villa’s structured and choreographed attacking system can fine-tune decision-making. Villa built in an asymmetrical 3-4-2-1 shape, with the left back high and the opposite right winger wide. In theory, Dobbin would either operate on the right or as one of the split attackers up top.

He would add depth to Villa’s squad, which will be needed as fixtures increase, especially in Champions League games where up to 12 players can be on the bench. If Dobbin didn’t make it all the way, Villa would have a marketable (albeit on a smaller scale) asset that they could borrow or move permanently.

Why do Everton want Iroegbunam?

Boyland: Iroegbunam meets several requirements for Everton. With Andre Gomes having left at the end of his contract and Onana attracting a lot of interest, midfield has been identified as a priority area.

The 20-year-old also fits into the recruitment team’s blueprint to attract young, talented players with potential resale value. These types of deals are seen as a way to help the club address their recurring PSR issues and become more sustainable.

Iroegbunam is unlikely to feature as a starter in Dyche’s squad. Even if a club meets Onana’s valuation, Iroegbunam will compete with Idrissa Gueye, James Garner and Abdoulaye Doucoure for a spot in the squad.

While Emery and Steven Gerrard have spoken publicly about his abilities – the latter predicting a “big future” – he has yet to force his way into the Villa squad, making just one Premier League start last season.

However, Iroegbunam, an England Under-20 international, should at least add depth and put pressure on the more established names in Everton’s squad. He can contribute next season, but will likely only get better.

Iroegbunam can play as either a number 6 or a number 8 and is known for his composure and athleticism. Some of his best work came on loan to Queens Park Rangers during the 2022-23 season as he broke through from midfield.

Dyche, who favors hard work and hard running, is likely to appreciate such qualities.

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(Top photos: Tim Iroegbunam by Barrington Coombs; and Lewis Dobbin by Michael Regan; both via Getty Images)