With another transfer window open, and another (well the continuation of the permanent) silence from the club, the fans are in the dark about what is the plan at Villa. Sometimes, it’s hard to argue with those who want to know what is going on at Aston Villa, given that the recent times have merely given fans a series of frustrations from poor managerial choices, to a total lack of information about anything that is going on.

So What Exactly Do We Know?

Frustrations are understandably rising because of a number of reasons. Whether any individual likes Alex McLeish or not, there is an invariable frustration that arises from a lack of understanding. Given that the closest thing to a “plan” that was publicly made available was a letter of non-descript value to those of us who hold season cards, such a lack of thought and information is beginning to grind a bit.

For the sake of fairness, I have to say I do understand why some teams, or companies for that matter, keep things quiet. The idea, for example, that transfers are rarely discussed until they are complete, or almost complete at the least, is a good thing. It is good because you have to do what you can to keep ahead of your opponents.

There is ultimately no point in spending time and resources on a scouting network only to publicise the fact that you think a certain player is good. Otherwise, other teams can just use that knowledge you have found to steal a march, and then you’re in a competition for a signature which, as we know all too often, then means inflated fees and wages.

Given the fact that wages have been a significant talking point in recent times, overpaying is simply not an option at Villa. Recent rumours linking a Celtic playmaker with Villa along with suggestions that the player’s wage demands were too high was, whether they were true or not, a perfect illustration of the attitude of the club, or at least the easiest interpretation of it.

The question is though, amidst all of these Chinese whispers on Twitter and other social media sites, many of which are now having to be denied via the manager in press conferences, is what is the truth, and who is telling it?

The Truth – Often Hard To Find, Mostly Easy To Fathom

As we know all too well, there are an abundance of people who reference themselves as “insiders”, “ITK” or any other such term that is synonymous with implying that they know what is going on. These people seem more focused on the idea of getting attention, something that lumps them in with those who create “fake” accounts of celebrities, only to tweet pretending they are these people. In both instances, these people are hidden behind pseudonyms or, in the case of the “fake” accounts, the suggestion they are someone else.

On the face of it, should we really trust anyone who can’t put their neck on the line with what they are talking about? Whilst I understand the fact that there may be an undercover element of keeping “leaked” sources secret, I personally find it very difficult to believe anyone who can’t even admit to me who THEY are. After all, if they can’t tell the truth about who they are, why should I believe they will tell the truth about what they are saying?

Anyway, with regard to the “truth”, an ambiguous concept at best, Villa’s reality and “truths” are often a tad more bland. Nothing worth publicising shall we say, for a multitude of reasons which I will get to. The reasons why such Chinese whispers start off in the first place is a combination of a vacuum of information as well as a hesitance by the club to officially tell people what is going on, for reasons good or bad.

Call it what you like, but the club are not going to tell people publicly what the plan is for a number of reasons.

Why We Can’t Tell You – Because It’s Bad

If the plan is bad, and that is something many could extrapolate from existing situations, is there any club benefit in telling fans the truth? Whilst I can totally understand both the moral concept of being open and honest as a person, and of sating the desire for the club’s fans to know what is really going on, I can also understand the business angle as well.

As someone who has managed large projects, sometimes external expectations can be affected by seeing the full picture via public disclosure. After all, if your plan was to keep things ticking over this season on a low budget, it’s hardly likely to be something Villa would lead with on their marketing material. “Buy a season ticket because we need the cash, you’re in love with us, and we want your money” is not far from emotional blackmail, albeit as one interpretation of the situation. Being that blunt really would be negative PR.

The trade off with keeping it quiet if the situation is bad is that if you tell the truth, you lose money. So, as it happens, lack of PR when it is negative is about money after all. Is that the only way to look at it though?

Why We Can’t Tell You – Because It’s Good

The other way of looking at things is that things are being kept secret because of a sensible and positive plan. Sadly for the fans, such a plan can’t be made public by the club because it would actually make the situation more challenging.

If we were to admit tomorrow publicly that we had £100m to spend, do you think prices for players would go up or down? It’s pretty obvious that every player would have a new premium associated with them. Just look at Liverpool’s spending in the close season, look at Chelsea’s £50m acquisition of Torres, and the spin off purchase of Andy Carroll for £35m by Liverpool. Value for money? Not likely. If people think you are rich, prepare to pay through the nose for things you want.

For Villa, to make things progress requires two simple results – to make more money, and to have less costs.

Making More Money

A good plan for Villa would be akin to the one I eluded to in a recent article – to spend money in a lump sum that fits with financial fair play constraints. In order to enact this, several things need to occur. The first is that turnover needs to increase. This has been done with trading the Acorns sponsorship for Genting’s deal. Villa have subsequently then got a lot more money in the bank. Villa obviously have other projects in place to ensure other ways that turnover is maximised.

Detractors of the change from Acorns to Genting will say that the change has dropped the PR for the hospice, but this isn’t entirely true. Villa still remain committed to the support of the charity with financial donations, and the results from a past campaign encouraging fans to text Acorns to help illustrated that such a business deal was largely doing nothing.

When 40,000 fans can’t raise £400 in one matchday campaign, and that is a figure I know direct from Acorns, it goes to show that whilst the sentiment might be “good”, it wasn’t making Villa or Acorns much money. In fact, the vast majority of money that the club provides for the charity is directly from the club, not direct fan contributions. Thus an ongoing charity partnership agreement made far more sense.

Villa then have a revenue stream giving the club more money, as well as still providing Acorns with the much needed resources they need to function. Win-win.

Spending Less Money

The second part of such a plan working is that costs need to be as low as possible. This sounds straight forward, but there is a specific business model I’ve created that makes Villa’s “extreme” cuts look sensible. As we know, wages form one of the most significant parts of Villa’s on-going costs. When you have a closed system that imposes upper limits, then any investment has to come out of those limits. Given that spending (x), is ultimately governed by costs (y), and turnover (z), then the only way to spend large amounts in x, is to make y and z as far away from each other as possible.

In order to spend x in one go, and therefore get a nucleus of a team together for the longest possible time for development purposes, it means a short term cut (one or two seasons) of y to a less than usual level to fund x being as high as possible. As fees are one-off payments to the balance sheet, and wages are on-going commitments, the next season’s wages can then return to a “normal” level, with fees then continuing at a moderate amount per season. It also means that post investment, the turnover is higher, whilst the ongoing costs remain stable at the same time.

With FFP allowing a £45m leeway over three years, such a model would effectively give Villa, or any other club enacting such a change, a significant way to effectively leap forward in progress without bankrupting the business, supplementing the club with a large one-off amount of investment in order to provide another push.

Should this push then lead to success, the usage of prize money would then act as a further accelerator for progress without mortgaging the club’s future again. It also lets the club effectively use the system to take comparatively small risks in expenditure weighted against the £45m figure over any three year period, realistically leaving approximately £30m as a golden ticket for one star player in any one of any consecutive three years, allowing it to be repaid at a rate of £10m per year.

Apologies if this all sounds overly complex, but it explains things in a manner that details my reason for being calm. The only concern this leaves me with is a football one, which is whether Alex has the knowledge or capability to be relied upon to manage such as large scale financial assault.

Without this specific knowledge of such a model though, and with the perception of what is going on at the club, there is an easy conclusion to jump to which is that Randy is “asset stripping” or that he is looking to pocket large portions of the cash. However, both of these conclusions fall wide of the mark. If Randy was asset stripping, or trying to recoup money ahead of a sale, he can’t do so by dropping assets off the balance sheet. Villa with a good squad is going to be worth more than Villa with a bad squad for instance. Sell all your best players, and he then can’t charge a good price for the club, if he was deciding to sell it which, for the record, he isn’t.

As for pocketing large portions of the cash, if Lerner had wanted to use Villa as a sole receptacle for making money, there are far better vessels than a football club to invest in. TV rights may well bring revenue, but with high operating costs in spiralling wages, and significant competition, especially in recent years, football is a very poor choice for return on investment. Of course, people could argue that he has only realised said issue recently, and that is why he is trying to bail out, but the point about assets on the sheet puts that idea to bed. Villa can only squeeze as much out of Villa as he either invests or cultivates himself, both of which are fair rewards for running a club, and the subtraction of which would devalue the club, thus directly affecting Lerner himself. Bottom line is Lerner isn’t going to screw himself for short term gain – it makes no sense.

The trade off with keeping this plan quiet is that if you tell the truth, then you lose value for money. It’s not the same as losing money per se like in the “bad” plan agenda, but it has the same result. Having £5m less to spend because of less season ticket sales is synonymous with having to pay £5m more for a player because the opposition thinks, or rather knows you are flush.

Validating Staying Quiet

So we’ve established that whatever the plan is, saying something means making things harder. Some might argue that secrecy goes hand in hand with having something to hide, after all, there’s no smoke without fire as they say, but this is not always the case. Sometimes secrecy has to be enacted, not even because you want to do so, but because there are no other viable options.

If Lerner did open up and tell us some of the plans he had, we would, like any other person, then want to know more. It becomes an endless cycle of full disclosure. Whatever the club would tell us would either lead to a) wanting to know more or b) potentially risking bad PR for being “honest”. After all, look at what happend to Charles Krulak when he embarked on the internet forums of the world. The bloke got shot down, was lambasted for talking PR, and ended up disappearing as a result.

Sometimes, telling the truth does nothing positive, and when it does nothing positive, as well as taking time to do, it quickly becomes a very poor value decision, so thus the board don’t bother. So there you have it. There’s the reason why the club say nothing, and my own way of explaining why severe cuts are easily explained in practical business terms. All we have to wait for now is for Paul to enact those changes, and maybe the bright future could be closer than we think.

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