Blog by: My old man said
When Aston Villa limped over the finish line at the end of the 2011 / 2012 season, Randy Lerner was faced a hidden crisis more serious than simply choosing a new manager to replace the reviled, Alex McLeish.
The summer of 2012 marked a turning point in the future of the football club, as Randy Lerner and chief executive Paul Faulkner came to terms with the fact that Villa’s finances were escalating dangerously out of control.
Villa’s boom years of spending under Martin O’Neill were to be replaced with bust years of austerity as Villa’s board sought to rein in years of profligacy under Martin O’Neill, Gerard Houllier and Alex McLeish.
The net debt at Aston Villa football club had grown to £122m, an increase of £8m from £114m in the previous season.
A large proportion of the additional debt was incurred through managerial appointments and dismissals as Martin O’Neill, Gerard Houllier and Alex McLeish received combined compensation payments worth an estimated £12m. Particularly in terms of Alex McLeish, Randy Lerner and Paul Faulkner were foolish from a sporting and a financial perspective.
In agreeing to release Alex McLeish from his contract, Birmingham City had settled for £2.5m in compensation from Villa in what can only be described as a desperate and foolhardy act by the club after Roberto Martinez had chosen to remain at Wigan.
It is incredible to think that Randy Lerner paid £2.5m to a rival club for the services of their unpopular manager, when he spent the same amount purchasing the exciting prospect, Aleksandar Tonev this summer. For the total cost of McLeish’s services, Randy Lerner could have in fact acquired Matthew Lowton, Ashley Westwood, Alexsandar Tonev and Yacouba Sylla, whilst still having change left over for a pie and chips at Villa Park.
Villa’s total outlay of £5.9m for a single season of Alex McLeish in the Premier League was financially comparable to Tito Villanova’s wages of £5.6m at Barcelona. However, Villa fans could hardly compare Aston Villa’s playing style under Alex McLeish to Barcelona’s playing style under Tito Villanova, nor did Alex McLeish win the league with Aston Villa as Villanova managed to do with the famous Catalan club.
Villa fans were therefore entitled to feel short-changed, particularly when considering that Borussia Dortmund were paying Jurgen Klopp a salary of £1.8m per season, which was a third of the cost of McLeish’s season at Villa.
In terms of transfers, only five clubs spent more than Aston Villa in a five-year period, as Lerner’s Villa averaged £13m net spend per season. This figure was marginally behind Stoke who averaged £15m net spend per season, and it was way behind Manchester City and Chelsea who wracked up £81m and £46m net spend respectively over an equivalent five-year period.
In terms of wages as a proportion of the club’s turnover, Villa wage bill floundered at a risky 90% of overall turnover following Martin O’Neill’s lavish four years at the club. The board of directors were surely aware that this figure was simply not sustainable. Therefore, in light of the club’s overriding priority to reduce the wage bill, the decision to hire Alex McLeish was peculiar to say the least. The club should have been aware that during McLeish’s time at Birmingham City he had accumulated the third highest net spend out of all the Premier League managers with £40m net spend over two seasons.
Furthermore, at the end of McLeish’s 2011 / 2012 season, Aston Villa had only made small indentations on the wage bill, reducing the overall figure from 90% to around 87.5%. In terms of annual losses, Villa had managed to slash losses by £36m under McLeish to £17m, mainly due to the sales of Ashley Young and Stewart Downing. In previous seasons Villa had accrued £54m, £38m and £47m losses under Gerard Houllier and Martin O’Neill.
The reduction of losses was a positive start for Aston Villa, but under Alex McLeish the club suffered a large drop in revenue of £11.7m. This was mainly due to the low attendances, as gates under Gerard Houllier had averaged 37,000, compared to 34,000 under McLeish.
When McLeish lost both Downing and Young, he replaced the star wingers with less effective players who were rewarded with contracts similar to those enjoyed by Young and Downing. Jermaine Jenas, for example, was loaned on big wages from Tottenham by McLeish despite being injury prone. Inevitably, Jenas broke down shortly after he arrived, and Villa were left with the bill and a big gap in central midfield.
Paul Lambert’s arrival at the club, however, has heralded a dramatic shift in the policy of the club. Rather than buying players from other Premier League clubs who were already on big wages like Hutton, Given and N’Zogbia, Lambert has recruited from the lower divisions and across Europe, where wages do not equal the excessive amounts paid by Premier League clubs.
In a sporting sense, as well as a financial sense, the future of Aston Villa appears to be in good health under Paul Lambert. Lambert has introduced a more meritocratic wage system, where good performances are rewarded with improved contracts. Players who play well have been rewarded with new deals such as Ashley Westwood and Christian Benteke, whereas others who have not played quite so well have remained on their current deals.
At the end of the 2011 / 2012 season Queens Park Rangers, net debt had crept up to £89m, closely behind Arsenal on £98m and Villa on £122m. Since these figures were recorded, Villa have continued to slash their losses, particularly in terms of wages. In contrast, Q.P.R have spent large figures on transfer fees whilst also giving lucrative contracts to players such as Jose Bosingwa and Junior Hoilett.
In the world of star struck football journalism, some football managers are venerated and mythologised by a chorus of toadies in the press, who seem to forget that they are there to represent their readers, the fans. Following the fate of clubs such as Portsmouth, you might expect members of the football press to scrutinise and hold to account managers who routinely place their clubs in financial danger for short-term gain.
Luckily for Villa fans, Randy Lerner has appointed a manager in Paul Lambert whose project aims to develop the long-term financial and football interests of the club. Lambert has enabled Villa fans to hope that the club can now fully recover from the financial and sporting mistakes made under previous managers and build on Aston Villa’s history of success.