Randy Lerner "State of Aston Villa" Statement

[citizenDJ]

When you cut away to the crux of the argument what people like Greg, Brian and Risso appear to be saying is that Lerner is rubbish because he won't throw unlimited amounts of his own money into the club.

Apologies if I've missed it but I haven't read an argument for how we fund the wage bill, which appears to be the major issue here. Indeed I'm fairly sure that when MON was Public Enemy Number One they thought that we were paying too much.

The recent letter that season ticket holders received set out their aim to improve revenue which (if successful) should see an improvement in the future. What are the alternatives?

The crux of the argument is that Lerner has wasted the money he has thrown.

The truth of the matter is that money rules the Premier League and to get to the higher eschelons you are going to have to spend an awful lot of money. This is either going to be self generated or come from a sugar daddy.

As Lerner was not in the Abramovich league when he arrived and was never going to throw the sort of money that Chelsea have done, therfore he had no alternative but to generate it from within.

The problem is he hasn't been able to do that but has spent as if he has.

We are now in the situation where we are loaded with debt and will be saddled with the repayments of this whilst now trying to self generate the income.

The self generating route was always going to be a long and slow route with no guarantee of success but at least we had no debt when Lerner joined.

Now however the odds are even further stacked against us.

I don't think Lerner should be beyond critisism just because he used his own sources of finance as opposed to a bank. Until he writes off the debt then he has simply borrowed against the Villas future earnings.

I'm probably being far too simplistic with this, but my take is that he spent heavily to give us every chance to qualify for the Champion's League. I think that he, like many of us, thought that in MON we had the right man, a 'footballing man', to spend that money, to build a squad and achieve that.

As it turned out, MON wasn't able to achieve that. Lerner made the money available at a time when reaching the Champion's League seemed to be more achievable than usual. We missed it, the window of opportunity has closed, and now he has not much choice but to reign things in again.

If we had managed it, just once, then our incoming funds would have risen significantly, and we could have built from there (although, at the moment Spurs don't seem to have benefited too much from last years experience).

So, Lerner gambled, we loved him for it. It didn't work out, he's cutting back to make the club sustainable, we're a bit less fond of that. For me, it seems reasonable although not very sexy.

Now, whether he or his team are capable of increasing revenue in other ways, or if it even is possible, is another matter...

[robbyfvillain]

I can't swear to this, but I think a lot of the money injected into the club by Randy after the take-over has been in exchange for new shares in the club and not for debt. That would mean that, as Randy ultimately owns all the shares in the club all he's doing is diluting his own stake.

I believe the accounts at 31 May 2010 show 110m of debt

[Chris Smith]

When you cut away to the crux of the argument what people like Greg, Brian and Risso appear to be saying is that Lerner is rubbish because he won't throw unlimited amounts of his own money into the club.

Apologies if I've missed it but I haven't read an argument for how we fund the wage bill, which appears to be the major issue here. Indeed I'm fairly sure that when MON was Public Enemy Number One they thought that we were paying too much.

The recent letter that season ticket holders received set out their aim to improve revenue which (if successful) should see an improvement in the future. What are the alternatives?

The crux of the argument is that Lerner has wasted the money he has thrown.

The truth of the matter is that money rules the Premier League and to get to the higher eschelons you are going to have to spend an awful lot of money. This is either going to be self generated or come from a sugar daddy.

As Lerner was not in the Abramovich league when he arrived and was never going to throw the sort of money that Chelsea have done, therfore he had no alternative but to generate it from within.

The problem is he hasn't been able to do that but has spentcoccydynia  as if he has.

We are now in the situation where we are loaded with debt and will be saddled with the repayments of this whilst now trying to self generate the income.

The self generating route was always going to be a long and slow route with no guarantee of success but at least we had no debt when Lerner joined.

Now however the odds are even further stacked against us.

I don't think Lerner should be beyond critisism just because he used his own sources of finance as opposed to a bank. Until he writes off the debt then he has simply borrowed against the Villas future earnings.

ll you've done is repeat the same criticism you've made previously. It's not about being beyond criticism, but if that is to be in any way constructive there has to be an alternative. They've offered the improve the revenue approach, what would yours be?

[Greg N'Ash]

When you cut away to the crux of the argument what people like Greg, Brian and Risso appear to be saying is that Lerner is rubbish because he won't throw unlimited amounts of his own money into the club.

Apologies if I've missed it but I haven't read an argument for how we fund the wage bill, which appears to be the major issue here. Indeed I'm fairly sure that when MON was Public Enemy Number One they thought that we were paying too much.

The recent letter that season ticket holders received set out their aim to improve revenue which (if successful) should see an improvement in the future. What are the alternatives?

Too right i was calling for a reduction from MON's squad size but its been done. I was fully behind Lerner reducing non-playing staff from the squad of last summer but when is it going to end?

This is off the top of my head so i may have missed someone out but since last summer we've lost

Friedal
Davies
Sidwell
NRC
Milner
Young
Downing
Walker
Carew
Pires
Osbourne
Salifou

Even if that lot were on a measly 20k a week thats still the best part of 250k a week gone

Add to the bill we've got

Ireland
Given
N'Zogbia
Makoun

Now thats a pretty drastic reduction to my mind in wages even with the new arrivals unless Makoun and co are on a 100k a week.

We now have a smaller squad than in the pre-lerner DOL days with the youngsters on very little made to bolster out the numbers to make it look respectable. Again, I have no problems with Lerner not putting any of his own money in if things are tight but i think having a budget where we look like finishing the transfer window with a 20m profit on top of all the wages cuts is taking the piss. Lerner has to decide pretty soon if he's big enough to own Aston Villa because he's not doing us any favours at the moment. He wanted the prestige of owning one of the world's oldest football clubs in the biggest league in the world and you have to pay for it.

[Whiney MacWhineface]

I can't swear to this, but I think a lot of the money injected into the club by Randy after the take-over has been in exchange for new shares in the club and not for debt. That would mean that, as Randy ultimately owns all the shares in the club all he's doing is diluting his own stake.

I believe the accounts at 31 May 2010 show 110m of debt

Daily Telegraph link

The article is referring to the 2009 accounts, but it's half and half loans/shares from that period, with the loans being interest free.

The new investment takes Lerner's total investment to £179 million since he bought the club in 2006, with £95 million in equity and a further £84 million in loans. The investment comes on top of the £62 million he paid for the club.
 
Lerner put £70 million into the club during the 2008-09 season, with a further £12.5 million at the start of this campaign. According to the accounts Lerner's loans to the club are unsecured and interest free, and repayable between 2016 and 2019.

The 2010 accounts show interest on loans (presumably from the original ones from the Lerner Trust) standing at £5m, which is hardly exorbitant nor crippling.
 

[Chris Smith]

Now thats a pretty drastic reduction to my mind in wages even with the new arrivals unless Makoun and co are on a 100k a week.

It's been reduced to a sustainable level based on current revenue. If the spend, spend, spend brigade get their way then it won't be. Do you think you have the right to demand Lerner puts more money in when you're not prepared to do the same?

As I said, some suggestions as to how we afford it would be welcome.

[Greg N'Ash]

Now thats a pretty drastic reduction to my mind in wages even with the new arrivals unless Makoun and co are on a 100k a week.

It's been reduced to a sustainable level based on current revenue. If the spend, spend, spend brigade get their way then it won't be. Do you think you have the right to demand Lerner puts more money in when you're not prepared to do the same?

As I said, some suggestions as to how we afford it would be welcome.

Hang on last summer you were telling us there was loads of money and we didn't need to worry. All through MON's time that was your mantra. In fact you were the head of the spend, spend spend mob. As i said, if Lerner has come into football to make a profit then really he picked the wrong club, and should maybe bugger off to Wigan or the like. You don't buy a rolls-royce if you're after fuel ecomony

[Chris Smith]

Now thats a pretty drastic reduction to my mind in wages even with the new arrivals unless Makoun and co are on a 100k a week.

It's been reduced to a sustainable level based on current revenue. If the spend, spend, spend brigade get their way then it won't be. Do you think you have the right to demand Lerner puts more money in when you're not prepared to do the same?

As I said, some suggestions as to how we afford it would be welcome.

Hang on last summer you were telling us there was loads of money and we didn't need to worry. All through MON's time that was your mantra. In fact you were the head of the spend, spend spend mob. As i said, if Lerner has come into football to make a profit then really he picked the wrong club, and should maybe bugger off to Wigan or the like. You don't buy a rolls-royce if you're after fuel ecomony

No, I wasn't. I said that the window should be judged on merit and was critical of them signing Ireland when we had no manager. They then signed Bent in January as they'd been able to shift a few out.

My point is that we now know what their plans are from now. There's little point harking back and saying we should have done this or that as it can't be changed. We are where we are now and if you are going to spend your time moaning about their strategy then it's only to be expected that you'll be asked for your alternative.

[Greg N'Ash]

You have to know what he's aiming for to offer an alternative. If he's looking to cut probably 350k a year in wages and make a transfer profit of 20m every season then i'd say he should sell -up. Bottom line is Ellis' last season when there was no money for transfers and things were kept extremely tight we still posted a lost i think of 9m for 6 months. Not many big clubs do post a profit, probably only the mancs - you don't buy a club like Villa to make a profit unless your a fuckwit.

[Clampy]

Now thats a pretty drastic reduction to my mind in wages even with the new arrivals unless Makoun and co are on a 100k a week.

Do you think you have the right to demand Lerner puts more money in when you're not prepared to do the same?

Quite.

[Chris Smith]

You have to know what he's aiming for to offer an alternative. If he's looking to cut probably 350k a year in wages and make a transfer profit of 20m every season then i'd say he should sell -up. Bottom line is Ellis' last season when there was no money for transfers and things were kept extremely tight we still posted a lost i think of 9m for 6 months. Not many big clubs do post a profit, probably only the mancs - you don't buy a club like Villa to make a profit unless your a fuckwit.

It's in the letter that prompted this thread. Increase revenue to put us in the top 20 in Europe and use that to fund the footballing side on a sustainable level. Nothing about profit, that's your invention.

Of course that takes time, as stated above it's not sexy and will not satisfy the impatient but MIGHT deliver in the future. I'm not saying that I know it will work, how could I, but it seems to me a better option than just saying Randy has to spend more.

[Greg N'Ash]

You have to know what he's aiming for to offer an alternative. If he's looking to cut probably 350k a year in wages and make a transfer profit of 20m every season then i'd say he should sell -up. Bottom line is Ellis' last season when there was no money for transfers and things were kept extremely tight we still posted a lost i think of 9m for 6 months. Not many big clubs do post a profit, probably only the mancs - you don't buy a club like Villa to make a profit unless your a fuckwit.

It's in the letter that prompted this thread. Increase revenue to put us in the top 20 in Europe and use that to fund the footballing side on a sustainable level. Nothing about profit, that's your invention.

Of course that takes time, as stated above it's not sexy and will not satisfy the impatient but MIGHT deliver in the future. I'm not saying that I know it will work, how could I, but it seems to me a better option than just saying Randy has to spend more.

chris, you can't increase revenue without expenditure. you have to have a product thats competitive. I may be wrong but if i was a sponser or sky or a season ticket holder, selling 37m worth of assets does not make your more competitive in their eyes. I really really don't expect Lerner to live with 80m losses each year but i expect him to swallow losses on a regular basis. Again why buy us otherwise? Again i wouldn't buy a car if i couldn't live with the running costs and running a rolls-royce on a shoestring does not work.

[Chris Smith]

chris, you can't increase revenue without expenditure.

Of course you can - putting up prices being the most obvious way.

The investment in the ground as been made, it's a question now of maximising income from hospitality and corporate facilities. Selling more merchandise, improving commercial partnerships etc. Of course if the team does well that becomes easier but there are ways of generating income that are not driven by what happens on the pitch.

[robbyfvillain]

I can't swear to this, but I think a lot of the money injected into the club by Randy after the take-over has been in exchange for new shares in the club and not for debt. That would mean that, as Randy ultimately owns all the shares in the club all he's doing is diluting his own stake.

I believe the accounts at 31 May 2010 show 110m of debt

Daily Telegraph link

The article is referring to the 2009 accounts, but it's half and half loans/shares from that period, with the loans being interest free.

The new investment takes Lerner's total investment to £179 million since he bought the club in 2006, with £95 million in equity and a further £84 million in loans. The investment comes on top of the £62 million he paid for the club.
 
Lerner put £70 million into the club during the 2008-09 season, with a further £12.5 million at the start of this campaign. According to the accounts Lerner's loans to the club are unsecured and interest free, and repayable between 2016 and 2019.

The 2010 accounts show interest on loans (presumably from the original ones from the Lerner Trust) standing at £5m, which is hardly exorbitant nor crippling.

The rate is LIBOR + 2% and whilst LIBOR is so low it is not crippling but if it rises from .5% to 5% it will be more concerning.

The real problem though is repaying the loans.

[maidstonevillain]

That is a very plausible case Greg but my only doubt is that if the owners of Liverpool and Manchester United continue to pour american money into those clubs why should Randy be  worse effected by the US banking and credit crisis.

Because I understand that the Lerner family fortune was heavily tied into Bank of America shares, which have been one of the worst affected, falling from something like $45 to $6.