The Sweeper: Randy Lerner Shows the Love to the Tune of £82.5 Million
It seems Aston Villa‘s American owner Randy Lerner, who has enjoyed darling status with the British media since taking over the club in 2006, has invested his own money into the team to the tune of £82.5 million since May 2008, the Telegraph reported yesterday. The author of the article speculates the news will “further endear him to supporters,” but this AVFC supporter wrote last weekend’s Sweeper on the inflationary effects of private capital in English football. And with a reported loss last season of £43.7 million, this supporter is also reminded of David Conn’s words from last week, when he warned “…the [financial] commitment will become too great once rich men pull out.”
In other words, the current, sixth-place finishing Aston Villa is one Randy Lerner away from a red-ink nightmare.
Not that Lerner is that sort of owner. The Telegraph notes that his investment in Aston Villa, which comes on top of his initial purchase bid of £62 million in 2006, is “unsecured and interest free, and repayable between 2016 and 2019.” And the club has arguably benefited from Lerner’s investment. Villa’s relative success in the Premier League—a succession of sixth place finishes—has led to an eleven percent increase in turnover. So what has led to the enormous losses? The Telegraph:
The loss is explained by a rise in player wages to £70.6 million, up from £50.4 million. Lerner also authorised the payment of £7.7 million in “management charges” to Villa’s US-based holding company.
Ah, that old song. This story further underlines that “tightening up” the Fit-and-Proper Person’s test won’t be enough to reform finances in English football. Ensuring “benevolent” wealthy owners take over beloved, historically-important clubs rather than “self-interested” ones, won’t stop the inflationary effects of private capital on player wages and transfer fees, an effect that wiped out any revenue gains made from making AVFC a success on the pitch.
The article ends as most of these sorts of articles do:
Villa’s current model is likely to breach new Uefa regulations on “financial fair play”. Uefa’s rules, which will be introduced in 2012, will require clubs to break even or be self-supporting to compete in European competition.
Whether UEFA’s initiative will truly mean the party’s over for freewheeling investors in English football remains to be seen, but for many cash-strapped English clubs paying ever-inflated wages and fees, 2012 can’t come fast enough.
- David Conn writes on the absurdity of fans not being allowed to know who ultimately owns their club: “Whoever succeeds Lord Mawhinney as the Football League’s chairman should push through the rule, as quickly as he can get his head round the detail, that all clubs must publish who owns them. Knowing who the owners of a club are, and understanding their motivation, is so basic a starting point for balancing the tension at the heart of football clubs, and for enjoying decent relations with supporters, that to withhold it is an insult.”
- American First Lady Michelle Obama appeared with a couple of DC United academy coaches for something called “Let’s Move!” yesterday. I’m sure the beltway hacks are already compiling their “Obamas support playing effete European field game to make your kids healthy” stories. Meanwhile DCU fans wonder why they’re yet again reading “Move” and “DC United” in the same headline.
- When Saturday Comes presents a nice, tidy update of the situation in League Two.
- And twohundredpercent.net presents his very own version of You Are the Ref, this time care of a windy incident in Germany’s lower leagues: “Just occasionally, something happens that is so ridiculous that all they can do is laugh at it all. At a recent German amateur match between TSV Wimsheim and TSV Grunsbach, such an incident occurred. A goal kick to Grunsbach might not have seemed like the obvious route to a goal for their opposition, but the clue was in the fact that they had an outfield player taking a goal kick and that the ball was being held in place by the goalkeeper. What happened next was proof that sometimes taking a short goal kick is the best option.”