The break that Villa needs

Aston Villa Football Club’s decision to review all media rights deals (MW last week) is part of a major commercial push undertaken by the {Premiership football club’s US billionaire owner Randy Lerner.

Lerner, who also owns American Football team Cleveland Browns, is one of a growing number of foreign investors in English football, seduced by lucrative screening rights deals, global exposure and huge marketing opportunities.

The US credit-card tycoon snapped up Aston Villa for £62.6m late last year and has set about reviving the fortunes of this once great football club – on and off the field. New management has been parachuted in, ambitious commercial plans are afoot and, perhaps most importantly for Villa’s long-suffering fans, cash has been stumped up for new players.

Villa has languished in mid-table mediocrity for some years in the Premiership, but it is certain the club’s new management will be looking to exploit its rich heritage. The club was established in 1888 and was among the 12 founding members of the Football League, it has won England’s top division seven times and the European Cup in 1982.

Lerner is aiming to capitalise on this past, and analysts and sponsorship experts have been impressed by his business propositions, while the fans have been sweetened by a five-year goal of competing in Europe’s Champions League. Yet the task facing Lerner and his management team is immense: recent unimpressive performances on the pitch have led to dwindling gate receipts and reduced commercial revenues, resulting in a 5% fall in income to £49m for the year ending May 31, 2006.

Villa lacks a unified brand, say analysts, while the club’s public relations, critics add, suffered in the final years of previous owner Doug Ellis. Marc Harris, director at Bell Pottinger Sports & Sponsorship, says Villa’s new owner could invest in conferencing and event facilities at the stadium to boost revenues, but cautions that the team’s performance will be pivotal in raising brand awareness.

He adds: “You are looking at a team that does not have global recognition.” In its favour, though, Aston Villa has a proven top-flight manager in Martin O’Neil and an owner with deep pockets, with Lerner’s personal wealth estimated at more than £750m.

Lerner, it appears, does not view Villa as a trophy asset and, unlike other foreign owners of Premiership clubs, is likely to be more concerned with the fluctuations of Villa’s bank balance than paying record-breaking transfer fees for players. His commercial plans are to create a business that can support the purchase of players. These include, initially at least, tapping into the local population – a potential £5m supporter base – while maximising existing revenue streams, such as event management.

But Villa has undertaken pioneering marketing ventures in recent years. It took the controversial step of launching an advertising campaign to promote season tickets for 2005/06, with the strapline “Once a Villan, always a Villan”.

Last month, the club signed a long-term deal with Nike, which will supply the kit and branded sportswear, while fans have been involved in a discussion group looking at the branding of the club, its strapline and logo. Online gaming company 32Red, meanwhile, signed up last year as shirt sponsor. Villa has also dipped its toe into the world of reality TV, when its programme charting the progress of several young footballers from acadamies set up by the club around the world was aired on Asian television (MW October 28, 2004).

These initiatives, along with the selling of Villa’s media rights, are being driven through by the club’s new chief executive, Richard FitzGerald, who joined the club recently after nearly 20 years at sports and media group IMG. He was a driving force behind the deal to stream live action from Wimbledon while at IMG, and analysts say he will bring a similarly fresh and forward-thinking role to Villa.

Charlie McEwan, head of sponsorship and consulting at Accelerate, says: “I think FitzGerald will bring a fresh approach and try to create a distinct position for the team and the brand.”

Putting its media rights up for sale is an example of this innovative approach. The tender maps out the club’s vision for next season’s domestic and international TV rights alongside rights for all digital content.

The move, prompted by the need to renew the contract for Villa’s website, which is held by Premium TV, the sports and entertainment group that holds contracts for most Premiership clubs’ websites, “is a bold step” according to one source. He adds: “I suppose the danger is if the club finishes low down the league it may find it difficult to renegotiate these contracts.”

Another possible means to bolster the club’s finances is the selling of the naming rights to Villa Park, a measure undertaken by teams such as Bolton Wanderers and Arsenal. But sponsorship experts argue this is unlikely, as it would alienate supporters, though Lerner could explore naming rights for individual stands at Villa Park.

Further down the line, experts say the club will look to the US, a fast-growing football market, to beef up its commercial presence. With Lerner’s connections, the US would appear an obvious target, though observers question whether US consumers will buy replica Villa shirts just because its owner is an American.

But with Lerner’s money and new management team, it looks like Villa has a chance to rise.

Timeline
1888        Aston Villa is established and is one of 12 founding members of the Football League
1981        The team wins the First Division crown for the first time in the modern era after a gap of more than 70 years
1982        Peter Withe scores winning goal as Villa wins the European Cup for the first time
1997        Aston Villa is floated on the stock market, with a valuation of £126m
2006        US multi-millionaire becomes chairman of Aston Villa after his £62m acquisition of the club.