Explained: The facts behind Aston Villa's agreement with Uefa after financial rules breach

But while last year was hectic as the club rushed to make sales in order to comply with the Premier League’s profit and sustainability (PSR) regulations, this year the key negotiations have not involved players.

Villa have agreed a deal to sell their women’s team to help get under the PSR limits, which restrict clubs to maximum losses of £105million over any three-year cycle.

On Friday, meanwhile, it was announced the club had been fined £9.5million for breaching Uefa’s own financial rules.

Below we explain what the rules are, what punishment Villa received, what the club have agreed to do about it and what it all means moving forward as they work toward compliance in future seasons to avoid a potential ban from Uefa competitions.

What are the rules?

The Uefa club licensing and financial sustainability regulations (CLFS), to give them their full title, essentially break down into two strands.

On the one side is the Football Earnings rule, which runs along the same lines as the Premier League’s PSR regulations, only it is much stricter.

Under Uefa rules, clubs are permitted maximum losses of just 60 million Euros (around £52million) over a three-year monitoring period, roughly half of what is allowed by the Premier League. 

While spending on youth development and women’s football can be deducted from the equation, Uefa does not allow “loopholes” such as that used by Villa and Chelsea in selling their women’s team to be factored in.

In addition, Uefa have also introduced a Squad Cost Ratio rule which restricts the percentage of total revenue clubs can spend on wages, transfer fees and agents’ fees. Last year the limit was 80 per cent, while in 2025 it has been reduced further to 70 per cent.

What happened in Villa’s case?

Uefa’s Club Financial Control Body (CFCB), responsible for enforcing the regulations, found Villa to be non-compliant with both the Football Earnings and Squad Cost Ratio rules.

The club were fined just over £5m (6m Euros) for breaching the latter, after it was found their SCR was above the 80 per cent threshold.

For the Football Earnings breach, they were fined £17.2m (20m Euros), though the vast majority of that has been suspended as part of a settlement agreement, following months of talks with the CFCB.

What is the settlement agreement?

To cut a very long story short, it essentially gives Villa three seasons to get their finances in order and become compliant with the Football Earnings rule.

Club officials have agreed what they describe as a “glide path” which will see them work to get within the limits by the end of the 2027-28 season. They have agreed to submit progress reports to Uefa every six months.

Under the agreement, Villa have agreed to meet annual targets and a “final target” which by 2028 will see them fully compliant with the Football Earnings rule (ie maximum losses of 60 million Euros) over the three-year monitoring period.

Some wriggle room is permitted. Villa will face an additional £4.3m fine for any breach of a target which is less than £17.2m (20 million Euros) in excess of the agreed limits.

But crucially, the deal also includes serious sporting sanctions if they were to breach the limits by too great a distance. Should Villa exceed any of their agreed financial targets by more than £17.2m (20m Euros), the settlement agreement would be torn up and they would be banned from the next Uefa competition for which they qualify.

What does it all mean?

While the potential ramifications of failing to comply with the agreement are considerable, club bosses are confident it will not come to that. 

Villa have known since last September, when the CFCB first opened proceedings against them, they were going to face some kind of punishment and the negotiations with the governing body over the past few months are believed to have been positive. The club believes it will be able to meet all targets and avoid any further sanctions.

Under the settlement, Villa are also unable to increase the overall cost of their squad for Uefa competitions this season. While this at first glance may sound restrictive, the fact Marcus Rashford and Marco Asensio’s combined wages have come off the books means the club does have some wriggle room when it comes to recruitment.

Neither do they believe a “fire sale” of star players will be required in order for them to be compliant with the agreement. There is a confidence they will still be able to field a competitive squad both in the Premier League and Europe.

But it does mean, as has been the case for several seasons now, they will need to be savvy in the transfer market, while the importance of raising revenues to increase the scope for spending has never been clearer.

The detail of the settlement agreement, meanwhile, lays bare why no club can afford to take Uefa's rules lightly.

The plus side for Villa, with everything set out in black and white, is they now have a clear blueprint for the future and a pathway toward compliance.