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.