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Buying Villa vs. Being Villa: The Harsh Truth

Familiarity.

Familiarity has a huge impact on our ability to be objective. The more you know something, the more you either love it, you hate it, or you grow so apathetic to it that you just walk away. In football, it’s the old marmite choice that you’re normally left with. Walk away? Are you crazy? You’re a lifer and so you’d better just accept that. So grab your metal tray and get in line.

So when money starts getting involved, it is very difficult for the vast majority of us to objectively assess the value of something that we have strong feelings for. Indeed, as the saying goes ‘one man’s trash is another man’s trash’. This saying never fails to remind me of those TV antiques shows, where people find out that the much-cherished family heirloom that has been handed-down across generations is in fact, in the eyes of the appraiser, nothing but a piece of old crap. It ends with the sad knowledge that there’s really not that much ‘cash in the attic’ at all, just a bunch of old boxes some cobwebs and a bit of damp.

And so we come to Aston Villa.

We love this club. Can’t get away from that. Don’t want to. But when picturing the current situation, a team of people from Bank of America Merrill Lynch dragging themselves around the US, trying to find a buyer for some old-world English ‘soccer’ club founded in 1874.

In the aftermath of the global financial crisis, we are thankfully long-past the idea of foreign investors engaging in speculative leveraged buyouts* (*for more information on the effect of leveraged buyouts, think of the Glazers in Manchester or Gillette/Hicks at Liverpool, and then scream. Really loud). So for any company to be a worthwhile purchase, it has to demonstrate that not only can it pay for itself today without detriment to its future activities (i.e. ‘sustainability’), it also needs that all-important upside. It needs to have the capacity and potential to grow, expand the fanbase, and harness untapped commercial activity. All that good stuff. Its value does not derive any contribution from its past. A buyer will at-best give a token give a token regard for the rich tapestry that is Aston Villa’s past and our overwhelming heritage.

Founder members of the Football League? "Don’t care".

Former Champions of Europe? "Might be worth a few retro-shirt sales".

Seven-time Division One Champions? "What’s a ‘Division One’?"

FA Cup winners seve… you get the idea.

We’re a hard sell. We are the biggest club in a city of 1 million population, with numerous other established and competing clubs carving up the West Midlands. The stadium is big but not enormous, and our commercial activities are preaching to the already-converted. Bums-on-seats is stuck in the 30,000-35,000 region, and the capacity to market the club outside of the Midlands is limited. Salary is in the 70-80% region relative to revenue. Our overwhelming income stream is Sky Television and the various Premier League contracts, which is largely set at the 70m region for the next five years, so long as Villa avoid relegation. Unless we somehow entered the Chalipns League, £70-odd million is what it's going to be.

The talk of interest by Miami Heat’s owner is interesting, but the recent influx of US owners into the EPL has shown that the appetite by US-based sports franchise owners for throwing money at a Premier League club is very low. Beyond Glazer’s well-publicised cash-drain of the most marketable club in England, we have Kroenke at Arsenal and JW Henry at Liverpool who are both hesitant to spend really big in net terms. Despite Arsenal being in London with a 60,000 capacity (largely paid-for) stadium, and LFC’s immense global marketability, the desire to not spend beyond-their-means is paramount. Lerner knew that Villa was not going to make him any money any time soon, so he spent two years preparing for sale, and then hit the eject button once 2014 survival was secure. To his overwhelming credit he has spent £200 million of his own money since 2006, and has gotten himself right back to where he started.

Aston Villa is a great old club. But with our limited upside coupled with UEFA Financial Fair Play that prevents a sugar-daddy from ever coming in with an Abramovic-style open cheque-book and dead-eye stare, Villa’s revenue is largely stuck at its current level for the foreseeable. All potential owners will know this, and this is a huge problem for our ability to garner an owner and a selling price that is even close to correlating with our own perception of what Aston Villa is worth.

For now, the best we can hope for is a quick sale, and without some extraordinary turnaround in fortunes on the field, we should expect more lean times at Villa Park for the foreseeable, whoever ends up owning Aston Villa.


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