The Randy Lerner thread

[TrentVilla]

Trent - Yup, you're right about the £17.7m loss though, I was indeed using figures a year out of date. Given that the television revenues are ~£20m extra a year now, that would put the club in a small profit. That said, I did mention the TV deal and the reducing wage bill in exactly the quote where you suggested I did not.

 

Yes I know I am and yes you mentioned TV money but not the massive increase in it and because you were 12 months behind with the accounts you seemed to be missing the relevance of the new deal and its impact on our likely financial results.

 

However, you're missing the point of my post by debating the details. The crux of the discussion isn't the likelihood of Lerner selling the club for a profit, as I said in my third sentence that I'd just read Fulham may well have gone for £200m and thus it was possible Lerner could have recouped his investment even if the club was in the loss-making state I thought it would be in

 

The point is that running the club to make a small profit each year and using that to pay down the loans isn't a sensible strategy from his point of view. All it needs is one bad season and for the club to get relegated, and the value of AVFC is hugely reduced - and the likelihood of relegation is increased if you're running the club on a shoestring. It's better to sell it immediately, while it is still a PL club and is enjoying a rare moment of stability. The logic works irrespective of whether the club is making a loss or not, because the value of the club increases with the money it is making.

 

No I'm not missing the point and I'm not debating the details, I'm correcting you on them as you were 12 months out of date with your figures and by doing so illustrating that you don't actually know what you are talking about. That isn't intended to be an insult, it is just fact, you based your point on incorrect figures.

 

I never said what I suggested Lerner is doing is a sensible strategy, I simply suggested that it is what I believe he is doing. Believe me I don't think Lerner has had a sensible strategy since the day he arrived. Yes I agree a bad season or relegation and the value would be reduced, no argument there and yes running the club on a shoestring increases the chance of this. Again no argument.

 

But you are wrong, it isn't better for him to sell the club now with the debts that it has incurred because he wouldn't be able to sell the club with those debts for the sort of value that would enable him not to make a very serious loss. The plan when selling any business is to make them as profitable as possible and as debt free as possible, that is how you maximise value and that is what I believe Lerner is in the process of doing.

 

Frankly your logic doesn't work, in fact there is no logic to your final point in the quote above. The club isn't currently making money, it has lost money year after year so at the moment the value isn't increasing it will only increase when it becomes profitable and the loans are paid down.

[TrentVilla]

Erm a wild stab in the dark here. I bet your wasn't this concerned and vocal on this thread when the money was being pumped and spent by MON.

 

In fact you was most likely lapping it up like the rest of the fan base.

 

 

Oh I've not seen this daft argument used in a while.

 

Yes, everyone was happy when we were spending money obviously what football fan isn't happy when their club is spending money.

 

However the assumption was that there was a plan, that what we were doing if not sustainable was at least under some kind of control, that there was a plan and that the club could at least manage the wage bill it built up.

 

Only it couldn't, there wasn't a plan, there was no structure it was a house of cards and soon enough it came down.

 

So the fact people were happy when we were spending money really isn't any kind of reason that they can't be critical of Lerner or the way he has run the club.

[LondonLax]

Trent - Yup, you're right about the £17.7m loss though, I was indeed using figures a year out of date. Given that the television revenues are ~£20m extra a year now, that would put the club in a small profit. That said, I did mention the TV deal and the reducing wage bill in exactly the quote where you suggested I did not.

Yes I know I am and yes you mentioned TV money but not the massive increase in it and because you were 12 months behind with the accounts you seemed to be missing the relevance of the new deal and its impact on our likely financial results.

However, you're missing the point of my post by debating the details. The crux of the discussion isn't the likelihood of Lerner selling the club for a profit, as I said in my third sentence that I'd just read Fulham may well have gone for £200m and thus it was possible Lerner could have recouped his investment even if the club was in the loss-making state I thought it would be in

The point is that running the club to make a small profit each year and using that to pay down the loans isn't a sensible strategy from his point of view. All it needs is one bad season and for the club to get relegated, and the value of AVFC is hugely reduced - and the likelihood of relegation is increased if you're running the club on a shoestring. It's better to sell it immediately, while it is still a PL club and is enjoying a rare moment of stability. The logic works irrespective of whether the club is making a loss or not, because the value of the club increases with the money it is making.

No I'm not missing the point and I'm not debating the details, I'm correcting you on them as you were 12 months out of date with your figures and by doing so illustrating that you don't actually know what you are talking about. That isn't intended to be an insult, it is just fact, you based your point on incorrect figures.

I never said what I suggested Lerner is doing is a sensible strategy, I simply suggested that it is what I believe he is doing. Believe me I don't think Lerner has had a sensible strategy since the day he arrived. Yes I agree a bad season or relegation and the value would be reduced, no argument there and yes running the club on a shoestring increases the chance of this. Again no argument.

But you are wrong, it isn't better for him to sell the club now with the debts that it has incurred because he wouldn't be able to sell the club with those debts for the sort of value that would enable him not to make a very serious loss. The plan when selling any business is to make them as profitable as possible and as debt free as possible, that is how you maximise value and that is what I believe Lerner is in the process of doing.

Frankly your logic doesn't work, in fact there is no logic to your final point in the quote above. The club isn't currently making money, it has lost money year after year so at the moment the value isn't increasing it will only increase when it becomes profitable and the loans are paid down.

Rather than spending years trying to pay down the debt to himself I think he is far more likely to put the club up for sale the minute it is turning a profit.

His asking price would cover the loans and he may well find a buyer at that price because a profit making club would be an attractive investment with all the fame/prestige that goes with it.

It could we be as soon as next seasons financial results that show us as a profit making business.

The danger for us though is that an owner who buys us because we make money is not an owner looking to throw piles of cash at us as a vanity project. They are more likely to be similar to Hicks and Gillet, buying the club with bank credit and taking a cut of our profits for themselves.

Edited October 4, 2013 by LondonLax

[Morley_crosses_to_Withe]

Can anyone confidently explain what the capital structure is of the club? What the purpose of the use of Randy's shareholder loans is? What the impact on tax this has? What implications the debt load truly has on the club and so on and so forth?

Or are you all just debating it in the most simplest of terms?

[TrentVilla]

 

Rather than spending years trying to pay down the debt to himself I think he is far more likely to put the club up for sale the minute it is turning a profit.

His asking price would cover the loans and he may well find a buyer at that price because a profit making club would be an attractive investment with all the fame/prestige that goes with it.

It could we be as soon as next seasons financial results that show us as a profit making business.

The danger for us though is that an owner who buys us because we make money is not an owner looking to throw piles of cash at us as a vanity project. They are more likely to be similar to Hicks and Gillet, buying the club with bank credit and taking a cut of our profits for themselves.

 

Perhaps, that is certainly an option and as previously stated I think we might even turn a profit in the next accounts but almost certainly will in the ones that follow. So we will soon see I guess.

 

I don't though believe he could achieve an asking price that would cover both the value of the club and the debt in order to give him back both the value of his loans and initial investment and subsequent cash injections for equity.

 

I agree with your last paragraph but in reality it wouldn't be all that different to the situation we are in now other than the level of interest on the debt. I've never joined those calling for Randy to sell pretty much for this reason but it doesn't stop me being critical of his running of the club.

 

I actually agree with the basic principle that the clubs finances need addressing, it is more his decision making, methods, motives and speed of changes that I take issue with.

[Morpheus]

 

If Trent is right about him stringing the club along to slowly pay down the debt then it becomes more a problem, but I just can't see that happening as it's an incredibly high-risk strategy for Lerner due to the annual risk of relegation and losing basically everything. If he's getting the club ready to sell then it makes sense to sell sooner rather than later.

Look at the decrease in investment over the past few transfer windows even with our flirtation with relegation. That should answer the above question and prove what Trent and i have been saying for some considerable time.

[LondonLax]

Unfortunately we can only blindly guess at what his plans are.

He might well just be happy to own a club which is making a profit and remain hands off with it.

[TrentVilla]

Unfortunately we can only blindly guess at what his plans are.

He might well just be happy to own a club which is making a profit and remain hands off with it.

 

Yes he might, I doubt it personally but we will see. 

[Panto_Villan]

 

No I'm not missing the point and I'm not debating the details, I'm correcting you on them as you were 12 months out of date with your figures and by doing so illustrating that you don't actually know what you are talking about. That isn't intended to be an insult, it is just fact, you based your point on incorrect figures.

 

I never said what I suggested Lerner is doing is a sensible strategy, I simply suggested that it is what I believe he is doing. Believe me I don't think Lerner has had a sensible strategy since the day he arrived. Yes I agree a bad season or relegation and the value would be reduced, no argument there and yes running the club on a shoestring increases the chance of this. Again no argument.

 

But you are wrong, it isn't better for him to sell the club now with the debts that it has incurred because he wouldn't be able to sell the club with those debts for the sort of value that would enable him not to make a very serious loss. The plan when selling any business is to make them as profitable as possible and as debt free as possible, that is how you maximise value and that is what I believe Lerner is in the process of doing.

 

Frankly your logic doesn't work, in fact there is no logic to your final point in the quote above. The club isn't currently making money, it has lost money year after year so at the moment the value isn't increasing it will only increase when it becomes profitable and the loans are paid down.

 

 

My logic works fine. You seem to have overlooked the fact that the financial results of a business do not magically appear at the end of the year, but accumulate during the year. The TV money is already being received and the wage bill has already been slashed. If you think the club is going to make a profit this year, then it already IS making a profit. Lerner will have access to the financial results for the year so far and could provide them to any potential new owner.

 

The loans do not need to be paid down in order for the club to increase in value in any useful sense. Randy's debt will go with him when he sells the club, because no owner is going to leave the previous owner with money secured against the assets of the club they just bought and Randy isn't stupid enough to leave that much of his money in a club now controlled by someone else. Unless something really bizarre happens, when the club is sold Lerner will have 0% equity and the club will owe him no money at all.

 

Thus if somebody is going to pay £100m to buy the club, it doesn't matter to Randy how that £100m is divided between purchasing the club and paying off his loans. It'd be the same if it was £500m. All the money would end up in Randy's holding company however the money is divided between loans and purchase, and irrespective of whether he's made a profit or loss on the sale. The plan when selling a company is to minimise EXTERNAL debt; the rest is deal with in the purchase price from the new owner.

Edited October 4, 2013 by Panto_Villan

[suttonpaul]

 

Ill be boring and say it again no chairman should be expected to put tens or hundreds of millions into a club knowing he wont get it back and you get what you pay for. If Villa is such a massive club why don't we sell out with our prices near the lowest in the league? Why don't we have high priced commercial sponsorship deals?

 

Join the real world.

If Man Utd won nothing for the next 30 years, and only 50,000 turned up week in week out, do you think their fanbase would "join the real world" and accept they are not a big club any more?

 

 

No but if they had won 1 league and 1 European cup more than 30 years ago and not much else of note in a century then I would tell them to join the real world however we will have to wait until we are all dead to see that hypothetical come to pass.

[TrentVilla]

 

 

My logic works fine. You seem to have overlooked the fact that the financial results of a business do not magically appear at the end of the year, but accumulate during the year. The TV money is already being received and the wage bill has already been slashed. If you think the club is going to make a profit this year, then it already IS making a profit. Lerner will have access to the financial results for the year so far and could provide them to any potential new owner.

 

The loans do not need to be paid down in order for the club to increase in value in any useful sense. Randy's debt will go with him when he sells the club, because no owner is going to leave the previous owner with money secured against the assets of the club they just bought and Randy isn't stupid enough to leave that much of his money in a club now controlled by someone else. Unless something really bizarre happens, when the club is sold Lerner will have 0% equity and the club will owe him no money at all.

 

Thus if somebody is going to pay £100m to buy the club, it doesn't matter to Randy how that £100m is divided between purchasing the club and paying off his loans. It'd be the same if it was £500m. All the money would end up in Randy's holding company either way, whether he's made a profit or loss on the sale.

 

 

Your logic isn't sound but you are welcome to your opinion. I really haven't assumed financial results magically appear at the end of the year, that is just daft as is the above post.

[Guest av1]

Ill be boring and say it again no chairman should be expected to put tens or hundreds of millions into a club knowing he wont get it back and you get what you pay for. If Villa is such a massive club why don't we sell out with our prices near the lowest in the league? Why don't we have high priced commercial sponsorship deals?

 

Join the real world.

If Man Utd won nothing for the next 30 years, and only 50,000 turned up week in week out, do you think their fanbase would "join the real world" and accept they are not a big club any more?

 

No but if they had won 1 league and 1 European cup more than 30 years ago and not much else of note in a century then I would tell them to join the real world however we will have to wait until we are all dead to see that hypothetical come to pass.

We have won a awful lot more than you suggest.

[Panto_Villan]

The club will likely turn a profit when the new accounts are released so no, he will not lose more money the longer he owns the club.

 

 The club isn't currently making money, it has lost money year after year so at the moment the value isn't increasing

 

I really haven't assumed financial results magically appear at the end of the year, that is just daft as is the above post.

 

You're contradicting yourself. Either the club is going to make money this year and therefore it is already making money, or the club is going to lose money this year and therefore it is already losing money. Which is it?

[suttonpaul]

 

 

 

Ill be boring and say it again no chairman should be expected to put tens or hundreds of millions into a club knowing he wont get it back and you get what you pay for. If Villa is such a massive club why don't we sell out with our prices near the lowest in the league? Why don't we have high priced commercial sponsorship deals?

 

Join the real world.

If Man Utd won nothing for the next 30 years, and only 50,000 turned up week in week out, do you think their fanbase would "join the real world" and accept they are not a big club any more?

 

No but if they had won 1 league and 1 European cup more than 30 years ago and not much else of note in a century then I would tell them to join the real world however we will have to wait until we are all dead to see that hypothetical come to pass.

We have won a awful lot more than you suggest.

 

Ok play it your way since 1920 our wonderful club has won the following (listed as modern competitions).....

 

 

1 Premier League 1981

1 Champions League 1982

1 Super Cup 1982 (worthless cup)

1 FA Cup 1957

5 League Cups 1961,1975,1977, 1994, 1996

 

 

We have won nothing that a GREAT club would class as worthwhile since 1982, Austin powers wasn't even swinging when we won our last FA cup and its even been almost 20 years since we won the crappy league cup.

 

Can we stop making out like we are Utd or Real now and realise that we are a mid table premier league club so we stop these delusions of grandeur and concentrate on supporting our club by attending matches with full voices which is all we can do as fans to help our club (give it money and make it an intimidating ground for the opposition to play at)

[Dodgyknees]

Ill be boring and say it again no chairman should be expected to put tens or hundreds of millions into a club knowing he wont get it back and you get what you pay for. If Villa is such a massive club why don't we sell out with our prices near the lowest in the league? Why don't we have high priced commercial sponsorship deals?

Join the real world.

If Man Utd won nothing for the next 30 years, and only 50,000 turned up week in week out, do you think their fanbase would "join the real world" and accept they are not a big club any more?

No but if they had won 1 league and 1 European cup more than 30 years ago and not much else of note in a century then I would tell them to join the real world however we will have to wait until we are all dead to see that hypothetical come to pass.

We have won a awful lot more than you suggest.

Ok play it your way since 1920 our wonderful club has won the following (listed as modern competitions).....

1 Premier League 1981

1 Champions League 1982

1 Super Cup 1982 (worthless cup)

1 FA Cup 1957

5 League Cups 1961,1975,1977, 1994, 1996

We have won nothing that a GREAT club would class as worthwhile since 1982, Austin powers wasn't even swinging when we won our last FA cup and its even been almost 20 years since we won the crappy league cup.

Can we stop making out like we are Utd or Real now and realise that we are a mid table premier league club so we stop these delusions of grandeur and concentrate on supporting our club by attending matches with full voices which is all we can do as fans to help our club (give it money and make it an intimidating ground for the opposition to play at)

Funny this doesn't appeal to Spurs who have pushed themselves as a big club for years. Or for the chairman you defend, who came into this club talking about how big we are and continued to do so up to the point he lost interest in his play thing.

We are a big club, we are undervalued and nothing will change that, not even a chairman who has done so much wrong.

[Nigel]

 

 

 

 

Ill be boring and say it again no chairman should be expected to put tens or hundreds of millions into a club knowing he wont get it back and you get what you pay for. If Villa is such a massive club why don't we sell out with our prices near the lowest in the league? Why don't we have high priced commercial sponsorship deals?

 

Join the real world.

If Man Utd won nothing for the next 30 years, and only 50,000 turned up week in week out, do you think their fanbase would "join the real world" and accept they are not a big club any more?

 

No but if they had won 1 league and 1 European cup more than 30 years ago and not much else of note in a century then I would tell them to join the real world however we will have to wait until we are all dead to see that hypothetical come to pass.

We have won a awful lot more than you suggest.

 

Ok play it your way since 1920 our wonderful club has won the following (listed as modern competitions).....

 

 

1 Premier League 1981

1 Champions League 1982

1 Super Cup 1982 (worthless cup)

1 FA Cup 1957

5 League Cups 1961,1975,1977, 1994, 1996

 

 

We have won nothing that a GREAT club would class as worthwhile since 1982, Austin powers wasn't even swinging when we won our last FA cup and its even been almost 20 years since we won the crappy league cup.

 

Can we stop making out like we are Utd or Real now and realise that we are a mid table premier league club so we stop these delusions of grandeur and concentrate on supporting our club by attending matches with full voices which is all we can do as fans to help our club (give it money and make it an intimidating ground for the opposition to play at)

 

You forgot the Intertoto!

[suttonpaul]

 

 

 

 

 

Ill be boring and say it again no chairman should be expected to put tens or hundreds of millions into a club knowing he wont get it back and you get what you pay for. If Villa is such a massive club why don't we sell out with our prices near the lowest in the league? Why don't we have high priced commercial sponsorship deals?

Join the real world.

If Man Utd won nothing for the next 30 years, and only 50,000 turned up week in week out, do you think their fanbase would "join the real world" and accept they are not a big club any more?

No but if they had won 1 league and 1 European cup more than 30 years ago and not much else of note in a century then I would tell them to join the real world however we will have to wait until we are all dead to see that hypothetical come to pass.

We have won a awful lot more than you suggest.

Ok play it your way since 1920 our wonderful club has won the following (listed as modern competitions).....

1 Premier League 1981

1 Champions League 1982

1 Super Cup 1982 (worthless cup)

1 FA Cup 1957

5 League Cups 1961,1975,1977, 1994, 1996

We have won nothing that a GREAT club would class as worthwhile since 1982, Austin powers wasn't even swinging when we won our last FA cup and its even been almost 20 years since we won the crappy league cup.

Can we stop making out like we are Utd or Real now and realise that we are a mid table premier league club so we stop these delusions of grandeur and concentrate on supporting our club by attending matches with full voices which is all we can do as fans to help our club (give it money and make it an intimidating ground for the opposition to play at)

Funny this doesn't appeal to Spurs who have pushed themselves as a big club for years. Or for the chairman you defend, who came into this club talking about how big we are and continued to do so up to the point he lost interest in his play thing.

We are a big club, we are undervalued and nothing will change that, not even a chairman who has done so much wrong.

 

 

We are a big club based on what? What is a big club? I thought a big club was a club that won stuff recently and challenges regularly to win things.

[briny_ear]

Oh pleeeaaassse let's not have another dreary debate about whether Villa are or aren't a "big club".

 

As the post above demonstrates with crystal clarity, there is no sensible definition of a "big club" so people can just choose whatever their definition is and throw in a sample of stats to "prove" their case and we all end up nowhere..

[villan_007]

 

 

 

 

 

 

Ill be boring and say it again no chairman should be expected to put tens or hundreds of millions into a club knowing he wont get it back and you get what you pay for. If Villa is such a massive club why don't we sell out with our prices near the lowest in the league? Why don't we have high priced commercial sponsorship deals?

Join the real world.

If Man Utd won nothing for the next 30 years, and only 50,000 turned up week in week out, do you think their fanbase would "join the real world" and accept they are not a big club any more?

No but if they had won 1 league and 1 European cup more than 30 years ago and not much else of note in a century then I would tell them to join the real world however we will have to wait until we are all dead to see that hypothetical come to pass.

We have won a awful lot more than you suggest.

Ok play it your way since 1920 our wonderful club has won the following (listed as modern competitions).....

1 Premier League 1981

1 Champions League 1982

1 Super Cup 1982 (worthless cup)

1 FA Cup 1957

5 League Cups 1961,1975,1977, 1994, 1996

We have won nothing that a GREAT club would class as worthwhile since 1982, Austin powers wasn't even swinging when we won our last FA cup and its even been almost 20 years since we won the crappy league cup.

Can we stop making out like we are Utd or Real now and realise that we are a mid table premier league club so we stop these delusions of grandeur and concentrate on supporting our club by attending matches with full voices which is all we can do as fans to help our club (give it money and make it an intimidating ground for the opposition to play at)

Funny this doesn't appeal to Spurs who have pushed themselves as a big club for years. Or for the chairman you defend, who came into this club talking about how big we are and continued to do so up to the point he lost interest in his play thing.

We are a big club, we are undervalued and nothing will change that, not even a chairman who has done so much wrong.

 

 

We are a big club based on what? What is a big club? I thought a big club was a club that won stuff recently and challenges regularly to win things.

 

 

That would make you a Sky TV child, a product of the modern day.

[Guest av1]

Given that we are the 5th most successful club in England. I think anyone that doesn't think we are a big club is either deluded, fishing or only became a football fan after it died in 1992.