The author of the impressive Swiss Ramble blog takes his usual in depth, forensic examination of a club’s finances, in this case Aston Villa coming under the microscope. He concludes that much of the blame for the current plight of the club lies at the door of the owner, Randy Lerner. He has little idea of how to run a football club.
The author of the impressive Swiss Ramble blog takes his usual in depth, forensic examination of a club’s finances, in this case Aston Villa coming under the microscope. He concludes that much of the blame for the current plight of the club lies at the door of the owner, Randy Lerner. He has little idea of how to run a football club.
Lerner has accumulated losses of £249m during his years in charge, almost quarter of a billion pounds and the likely outcome is relegation just as the Premier League is about to acquire new riches. The blog points out that his strategy switched from one extreme to another, pouring in money, then turning the tap off. Moreover, he has been an absentee landlord.
My take on that would be that he initially thought that real success in the Premier League could come relatively easily and cheaply and, when it didn’t, he became disillusioned and had no Plan B. One is then left with what the blog describes as a club that is running to stand still.
Losses went up from £14m to £84m in 2014/15, largely because of higher wages. They are the largest losses reported to date in the Premier League. The wages to turnover ratio is the worst in the top flight. One of the reasons is that little money has been made on player sales, £0.4m compared with £44m at Southampton.
Villa has the 23rd highest revenue in world football. Attendances have not fallen off as much as one might expect, ranking 11th in the Premier League. Yet the club is clearly under performing compared with clubs such as Leicester City, Stoke City, Swansea City and Southampton.
One bright spot is that by converting debt into equity, gross debt has fallen from £170m in 2013 to £31m in the latest accounts. This is one of the smallest in the Premier League and might make the club more attractive to a prospective buyer. A change of ownership is what it clearly needs.
I would add that the West Midlands conurbation has generally under performed in football terms. This is difficult to substantiate, but it seems to me that there has been a lack of effective leadership in Birmingham that has allowed it to be eclipsed by Manchester as the second city. This may now be changing.
As the author of the Swiss Ramble blog points out, relegation may be the shock that Villa needs, but the route back will not be an easy one.