By Jason Davis
Today, Aston Villa reported a record loss of $85 million (£54m) for the last financial year, because finishing ninth just isn’t as lucrative as finishing sixth.
I kid. Three places in the table doesn’t fully explain Villa’s losses any more than Randy Lerner’s passport determines his ability to be a good owner. Villa lost money because Villa spent money; if Lerner hadn’t signed off on spending to strengthen the club, he would suffer criticism, while tightening the belt brings its own set of risks and condemnations. Unless you have more money than you can spend, owning a soccer club is a no-win proposition.
Rather than go into the how’s and why’s rich men (and a handful of women) choose to dump so much of their cash on losing propositions, it’s worth noting that Villa’s losses are no surprise. The perpetual battle to stay above the Premier League waterline in England means incurring debt and taking losses that are simply unsustainable over time. Villa appears to be in no serious trouble at the moment, but the whirlpool is always lurking for any club that chooses to chase dreams of moving up in the world. If Villa, a reasonably well-run club with decent teams and a good record of success, can take on so much red ink, then there is little hope for smaller clubs (see: Portsmouth).
Villa last fell out of the first division in 1987. But because they’re not on the level of Manchester United, Liverpool, or Arsenal, it will take massive investment on the order of Chelsea or Man City to see them climb any higher than occasional Europa League participant or Premier League also-ran.
The market as it exists in England is a hornet’s nest for all but the biggest clubs, with their massive and seemingly inexhaustible worldwide fan bases to refresh the coffers. Villa isn’t going to pull in millions through foreign shirt sales or tours to Asia. Income won’t increase without shares of European riches, and with the rather paltry bump from the Europa League the only possibility of that, it makes little difference to the club’s competitive prospects.
Most of Villa’s losses can be chalked up to the purchase of Darren Bent from Sunderland ($29 million) and compensation paid to turnover the managerial position. Villa’s bid to stay about the waterline went about the same as it does for so many other clubs; arms flailing about, desperately seeking a handhold, choosing big (and expensive), inefficienct action because it’s the only option available and avoiding the drop is paramount. Buying Darren Bent to provide goals, then selling Stewart Downing and Ashley Young (income not reflected in Villa’s report), are the actions of a club caught in a viscous cycle set in motion by a market that only rewards rampant and irresponsible overspending*, which only clubs with insanely rich ownership or the ability to borrow against its name in perpetuity can sustain. Villa doesn’t have insanely rich ownership, and they are not big enough to borrow into perpetuity.
Hence, $85 million in losses and some very concern about what that might mean. At least Lerner is throwing in a bit of his own money to help the cause. Unfortunately, as long as he’s not in the financial league of Abramovich or Sheikh Mansour, it’s unlikely to it will do much more than keep the club treading water.
*Financial Fair Play is coming. We’ll see if it makes much of a difference.
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- thegreatclintdempsey said: Not sure if this is a case of Villa getting that much worse or the top 6-7 making themselves that much stronger.
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