While it’s inevitable that the current mess at Aston Villa has reignited the debate about foreign owners, I would suggest that there is actually a much deeper issue that should be debated more openly.
Although it’s increasingly clear that Dr Tony Xia effectively decided to gamble the club’s future on promotion, that’s a question of recklessness rather than race. The real issue is, why he was tempted to do so?
It’s now being widely reported that Villa’s finances have long been held together by regular infusions of cash from China while £88 million was spent on transfers in the season before last, including a total of £17 million on Ross McCormack and Aaron Tshibola, neither of whom actually kicked a ball for the club in the season just ended as they were loaned out.
It was unsustainable and irresponsible but yet it could have paid off *if* Villa had beaten Fulham in the Play-off Final, and this, to me, is where the problem lies.
Year on year we read about how much that one game is worth to the winner. Each year the sum quoted becomes ever bigger and more obscene as Sky pump more and more money into the Premier League in return for a level of control. This, in itself, is an increasing source of irritation for the many fans who object to games being moved at short notice at the broadcaster’s behest, as the tradition of 3pm on Saturdays being the time for football is gradually whittled away.
The Premier League is a financial honeypot which, year on year, is becoming further and further divorced from the rest of English football. And as that gap grows, the more rich owners will be tempted to make the ultimate gamble.
The 2010–2012 parliamentary report into English football noted that, “Much of the overspending [by non-Premier league clubs] is as a result of the desire to get into the ‘promised land’ of the Premier League or indeed to simply stay there… the prevailing reasoning amongst Football League sides seems to be that excessive levels of spending can be sustained for a few years within which time promotion must be achieved. After that, Premier League revenues can be used to pay off all the debts accrued.”
That is exactly what has happened at Villa Park and could yet have drastic ramifications for Aston Villa and, more importantly, the Villa fans, with Xia now talking about the need to revert to a sustainable financial model.
The problem is that while Villa are the club making the headlines, there will be others looking on with a degree of apprehension about their own situations. Derby County are already talking about the need to cut back having also spent bucketloads on trying unsuccessfully to buy promotion in the last couple of seasons.
Inevitably there will be those fans who would rather see everything their club owns gambled on the roulette wheel rather than build long-term using a sustainable model, but the implications for the game are genuinely frightening, not just because more owners will be inevitably tempted down a similar route to Xia, but because the whole house of cards is dependent upon Sky pumping more and more money into the game.
It’s a bubble, and like all bubbles, it has to burst at some point. Of course, the Financial Fair Play (FFP) rules were designed to discourage such gambles but their actual effect has been largely to insulate clubs in the Premier League from the risks and pressures faced by those in the EFL, to whom the full force of the FFP rules seem to be applied much more readily.
One of the major criticisms of FFP is that it effectively secures the position of the big clubs that generate the largest revenue and profits and can consequently spend more money on transfers. Martin Samuel of the Daily Mail, amongst others, has criticised FFP, believing that the rules will create a procession instead of competition and has compared them to “a giant drawbridge that is being pulled up.”
Ultimately only three clubs can be promoted each year, with those with parachute payments theoretically starting as favourites. Therefore the risk of failure is significant, yet the reward for success becomes greater every year, so for a businessman like Xia whose whole working live has been based on the relationship between risk and reward, it is easy to see why the gamble was attractive.
The problem, of course, is that losing that gamble doesn’t just carry the risk of ruining the owner, it can also destroy the club.
While Xia’s self-satisfied tweet in the summer of 2016 about outbidding City for McCormack (“One club bid low, other club bid high”) annoyed me as much as it did all City fans, he certainly got his comeuppance in respect of the ever-expanding Scot whose huge wages (because pies don’t come cheap) will not be helping Villa’s financial situation one jot. But while karma is wonderful, the fact that one of England’s most famous clubs could end up in administration should be no laughing matter for any real football fan.