The NFL Owner Who Got Chewed Up by English SoccerBillionaire 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.
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.
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.’ ”
