Villarreal budget will be ~€20m smaller in 2019-20

Villarreal will be working with a smaller budget next season, following our 14th place finish in the league. Our budget was roughly €137m this season just ended; now, with the loss of European money and a reduction in TV revenue, we’ll end up with something around €115m.

I say “around” because the amount of money we will get from the Europa League just concluded will be greater than what was budgeted (we typically have budgeted to get to the round of 32, and we progressed beyond that). That €3-5m extra money might be reallocated to this season, I suppose.

The loss of European revenue is unfortunate, but doubly so given that it will make it more difficult to compete for available players if clubs playing in Europe are also interested. Villarreal does of course have some players who likely will be sold to shed unneeded salary—Sansone and Soriano are the start, N’Diaye could be next—and there is clearly a need to rework Bruno’s contract to a small base salary plus a fee for each game played, such as happened with Santi this season.

Since the club tries to balance our budget each year, what Villarreal is saying is that they will have €115-120m in revenues, and €115-120m in expenses in the coming year. What is always tricky is understanding just what the “budget” being referred to is. As I noted earlier, cash in and out is a far different thing than revenues and expenses—and the budget is reporting the latter.

For instance, consider a player like Nicola Sansone. He was bought for €13m and signed a five-year contract. I don’t know his salary, but let’s say it was €1.4m per year. In cash terms, we spent €13m in 2016 and €1.4m each year thereafter (let’s ignore his loan for the moment). But in budget terms, we amortized the €13m over the five-year life of the contract; an expense of €2.6m per year, plus his salary of €1.4m. So, in the 2018-19 budget, the amount of expense attributable to Sansone was €4m.

Now, we have agreed to sell him to Bologna for roughly €8m. He had two years remaining on his contract, so there was €5.2m left to amortize. Exactly how that €2.8m net gets treated I am not sure—it may be simply thrown into a separate transfer budget, with the main budget including an estimate for net transfer activity. Regardless, the effect of selling Sansone is that Villarreal has reduced its expenses by €4m between 2018-19 and 2019-20.

That is a very simple example (and I have made it overly simple), but it shows you the fallacy in assuming that an €8m sale translates into a €8m swing in the budget figures.

The key problems this summer could come if we end up with (unwanted, high-price) offers for players like Samu, Fornals, Pedraza, Gerard. Keeping the players we want to keep will be especially important this summer, as without the attraction of European football, we may not be able to attract replacements as easily and we can’t offer as much in salary because of the smaller budget.

I can’t help but point out though that Villarreal has typically had the most problems when they have had larger-than-normal budgets. In 2010-11 we had a fine team but it turned out we could not economically sustain it—that’s why Santi was sold—and in 2011-12 we had no money to spend when Rossi got hurt, Garrido got fired, etc. etc. The optimist in me says maybe we’ll do better this year on a smaller budget, than we did last year.