Billionaire Randy Lerner bought the storied Aston Villa club in 2006, aiming to restore it to glory and make some easy money. After a decade and over $250 million in expenses, he was gone. Here’s what happened.
Randy Lerner didn’t know much about English soccer in the summer of 2006. But he knew an investment opportunity when he saw one.
Lerner was the billionaire chairman of credit-card giant MBNA, the crown jewel in a business empire passed down to him by his father, Al Lerner, which also included the National Football League’s Cleveland Browns. Financially, the Browns were a small part of the portfolio. But Randy had come to enjoy the trappings of owning a pro sports team—above all, the intoxicating effect of filling a stadium, flying the flag for a city, and knowing that you were the one making it happen.
Which is how a trip to London in search of an investing opportunity in the U.K. wound up with Lerner adding a second sports team to his portfolio. On Aug. 25, 2006, he agreed to pay $118 million to take control of Aston Villa, the biggest soccer club in Britain’s second-largest city of Birmingham, becoming one of the first overseas investors to buy into the English Premier League.
In the decade that followed, Lerner would be joined by Russian oligarchs, Emirati sheikhs, American tycoons and Asian Tiger titans, all lured by the global popularity and growing riches of English soccer. Since the Premier League was formed in 1992 by a handful of owners hoping to cash in on television rights, its 20 clubs have increased their combined value by nearly 15,000%, from around $100 million in 1992 to $15 billion today.
All of which can make it sound as though raking in money in English soccer is as easy as kicking a ball into an empty net.
Except that isn’t entirely true. Because as Randy Lerner discovered to his great expense, English soccer remains a maddening, ill-regulated business world where hucksters and charlatans roam free and bad teams face perhaps the most draconian punishment in sports: being kicked out of the league entirely in a process known as relegation, which sends the bottom three teams in the standings every season down to a lower division. And this is how a billionaire investor who arrived with the best intentions ended up leaving English soccer a decade later—humbled, disgusted and some $250 million in the hole.
As Lerner described his decadelong misadventure in English soccer, in a rare interview from his Long Island, N.Y., home, he paraphrased George Harrison on life in the Beatles. “The Premier League cost me my nervous system,” said the 56-year-old Lerner.
Lerner’s experience in the NFL had gotten him used to dealing with owners and executives, flawed as they might have been, who operated within a certain familiar business framework by an agreed-upon set of rules. The Premier League, he discovered, could hardly have been more different.
In England, Lerner found himself looking out at a Wild West of irresponsible owners making senseless decisions, driven in part by the fear of relegation to the second tier, where revenues are a fraction of what they are in the big time and most clubs operate at a loss. Relegated clubs are forced to square off against a bunch of smaller teams in smaller stadiums, far from the spotlight, with the worst of those relegated again, and so on, right down to the amateur leagues featuring 11 guys from the local pub.
While NFL teams face no such penalty for underachieving, clubs at the bottom of the Premier League measure the stakes every weekend in the millions. Team owners are so spooked by the prospect of the drop—and the financial sinkhole that comes with it—that some say in private that they have knowingly made short-term decisions, from gambling on aging or unreliable players to suddenly firing the manager, just to appease their fans.
“The intensity, the chaos,” he said, “it either smokes some truth out of you, or you turn into one of them.”
Lerner saw his mission differently: He would be a custodian of a once-great institution that was no longer a championship contender. Something about Aston Villa awoke in him a nostalgia for an era of sporting stewardship in English soccer that he’d never known.
In that sense, he was nothing like the other American sports owners who would snap up Premier League teams in the years to come. While the likes of John W. Henry, a hedge-fund billionaire who has won four World Series rings as owner of the Boston Red Sox, or real-estate mogul Stan Kroenke crossed the Atlantic with designs on bringing some good old-fashioned American innovation to English soccer, Lerner wasn’t looking to create a revolution.
In fact, the last thing Lerner wanted to do was Americanize Aston Villa. He was clear-eyed enough to recognize that he was an interloper in England.
Sensitive to how fans would view him, he deliberately kept audio and video interviews to a minimum. Lerner had a better sense than most Americans of British attitudes toward foreigners—he’d studied at Clare College, Cambridge, and kept a home in the chic London neighborhood of Chelsea. And he knew English soccer fans got skittish around Americans stepping out of private jets into their local clubs with pockets full of greenbacks and Yankee accents. What could a real-estate and financial-services billionaire possibly want with a team in the old heart of the West Midlands?
But Lerner believed. So much so that he got a tattoo of the Villa logo, a lion rampant, on his ankle.
When he couldn’t be in Birmingham to attend matches in person, Lerner would break his self-imposed television ban and tune in from the States, plugging in the only set in his home before kickoff and unplugging it again at full time.
There would be grand gestures, too, moves that flew in the face of the Premier League’s cash-hungry ethos. For two seasons, Lerner eschewed a major jersey sponsorship, worth several million pounds a year, preferring to support a worthy cause. Instead of shilling for beer or airlines or offshore casinos, Lerner gave the real estate on the front of Villa’s shirt to a children’s hospice foundation.
“I have no problem being remembered as a sentimental putz,” he says now.
But Lerner soon came to understand there was no quicker way to a Premier League fan base’s heart than spending money on players.
In Martin O’Neill, he found a coach who was more than happy to do that for him. A testy Northern Irishman who wore tracksuits in the dugout, grabbed his players by the collar to yell at them in training, and cultivated an expertise in crime and criminology (as a player, he occasionally traveled with homicide case files to pore over in hotels), O’Neill had been coaching in the top tier for a decade.
In the first four seasons of spending lavishly, Villa splashed out £130 million, or roughly $165 million, to acquire players, placing the club among the most extravagant in world soccer. And that was only in transfer fees paid to other clubs—those players’ astronomical salaries were a separate expense. But the strategy did yield some success. After an 11th-place finish in the 2006–07 campaign, Villa finished in the top six for three straight seasons.
The only problem was that the Premier League equation for success—spend money, improve the team, never see that money again—went against every one of Lerner’s investing instincts. At the time, most clubs were happy to break even. This was not how his father had become a billionaire. And it was certainly not how Randy was going to stay one.
It dawned on him during those free-spending years that buying a Premier League club effectively meant buying it twice. The sticker price on NFL teams might be higher on average, but once you’ve bought one, there is almost no further spending except for free-agent players—operational costs are more or less covered by the league’s revenue sharing and stadiums are paid for by the cities. In soccer, however, paying the list price on a club guarantees only that your checkbook will stay open.
Disenchanted, Lerner gradually withdrew from his pet project. The people who populated English soccer simply were not his sort. When he tightened the purse strings in 2010, O’Neill stormed out of the club. Lerner decided to let others run Villa for him.
Things that used to amuse him about this experience—hearing the roar inside Villa Park, an away trip to tiny Scunthorpe—lost their allure. Even when Villa reached the 2015 FA Cup final against Arsenal, Lerner couldn’t wait to get out of Wembley Stadium. The awkwardness of enduring small talk with Prince William, nominally a Villa fan, while Arsenal pummeled his team was too much for him.
With no continuity in the dugout, the club that had so recently become accustomed to top-six finishes was suddenly thrust into annual relegation battles. Things fell apart for good in the spring of 2016, with a defeat at Manchester United that guaranteed Villa’s demotion to the second tier.
In the space of a decade, Lerner’s custody had taken the club from rubbing elbows with the Premier League elite to being kicked out of the party altogether. And he had spent more than a quarter billion dollars for the privilege.
Lerner had had enough, and made no secret of his desire to sell the club. And in May 2016, Tony Xia, a Harvard-, MIT-, and Oxford-groomed billionaire from China, paid around £60 million to acquire the club and end Lerner’s ordeal.
The total of Villa’s annual operating losses over the 10 years of Lerner ownership came to more than $260 million. He had sold the underachieving Browns in 2012 for a reported $1 billion. Because Lerner’s personal assets were so spread out—and because of the U.S. tax code—he was able to offset many of those Villa losses against profits elsewhere. But the surrender stung.
Today, the tattoo is still on his ankle. The TV stays unplugged. Yet, despite the bitter ending, Lerner feels he left on more or less his own terms after deciding to withdraw and cut his losses.
“It would be very easy to say the Premier League chewed me up and spat me out. But I like to think I put my finger down its throat, and said, ‘Now puke me up.’ ”
This essay is adapted from the authors’ new book, “The Club: How The English Premier League Became the Wildest, Richest, Most Disruptive Force in Sports,” to be published by Houghton Mifflin Harcourt on Dec. 4.
From the WSJ today (in the Apple News app so can't paste the link)
Thanks for posting that Paulie - decent read ....it's a shame it didn't work out .... it was just a plaything for Randy and it was plainly obvious he didn't share his father's acumen on business matters
An oddity as ever. Maybe he is Batman or something.
Thanks for posting that Paulie - decent read ....it's a shame it didn't work out .... it was just a plaything for Randy and it was plainly obvious he didn't share his father's acumen on business matters
Absolutely. Whilst Lerner was clearly an very intelligent guy his father was the business brains and I suspect Randy lacked both business acumen and football knowledge. His major mistake was not making up for those weaknesses by appointing the right people in the right roles at the right times. On a wider subject the comparisons between the governing of the Premier League/English football in general and the NFL was interesting.
So it's draconian that relegation exists, poor Randy.
So it's draconian that relegation exists, poor Randy.
I'm still not quite sure whether he spent ten years in denial of this strange concept called relegation or if he actually spent the last half of his reign actively trying to achieve it to see what it was like.
So hearing the roar inside Villa Park amused him? That says a lot about the man!
So it's draconian that relegation exists, poor Randy.
More Author's viewpoint, very American opinion anyway given how their popular sports work.
The usual Lerner "exclusive" of saying 5 sentences anyway. I'd love to know how he came to some of his decisions after 2010 although seems he delegated those to others.
His mistake were his appointments. In football everyone can expect a mon moment - this killed Lerner though
Very few actual new Lerner quotes there, presumably there's a proper chinwag in the book.
His mistake were his appointments.
Spot on.
That is precisely where he went wrong - he put his money in but did nothing (beyond trusting O'Neill) to protect his investment and grow it.
Man City have owners who can print money, but even they went and got the best leaders money could buy and put them throughout the club.
Lerner appointed his Dad's army mate and some bloke who used to run a call centre for him.
We are in the mess because of him.
As for the recognition of foreigners coming in and him keeping a respectful distance? What a load of Shit.
I don't feel for him in the slightest. Crap owner, dicked by Martin O'Pubehead and lost interest in his toy.
Yep, let's have a go at English football because Lerner's ownership of an NFL franchise was a model of success.
Probably a decent bloke but as an owner was found wanting on many of the fundamentals that the job entails. We the fans are still reaping the whirlwind he sowed.
He gave it his best shot and after years of our club being run like a corner shop under Ellis's stewardship he was a breath of fresh air. Once the Arab money rolled into town at Man City he knew he couldn't compete. Thanks for the memories Randy. For a while there I actually believed we were going reach the top.