Ellis rolls away from his nice Villa earner (original) (raw)

When, some time last century, Doug Ellis first bought into Aston Villa, the Football Association was clear: shareholders and directors were there not to make money out of clubs but to serve them. From the early years of professionalism, the FA believed clubs' sporting souls had to be protected from financial speculation. The FA insisted clubs' constitutions include rules to limit dividend payments, protect grounds from asset stripping and bar directors from taking a salary. The game powered into the phenomenal growth and amateurish administration of the 20th century governed by the principle that being a football club director was a form of public service, a privilege not a payday.

Doug Ellis's 35 years at Villa straddle the game's dizzying transformation through the boom of the 1990s. He is a monument to the ways in which many football directors of his generation were able, ultimately, to make fortunes for themselves. Ellis was a director at Birmingham City before, in 1968, he paid £25,000 for shares in Villa, who were struggling in the Second Division. Ellis was not the major owner in the 1970s; another local businessman, Ron Bendall, owned more shares. Ellis, the chairman, could not be paid because of the FA's rules, a fact the accounts annually recorded: "In accordance with [the club's] Articles of Association, no fees or other emoluments are payable to the directors."

Villa do, though, record payments to a company which Ellis mostly owned, Ellmanton Construction Ltd - £65,000 in 1971 and £56,000 in 1972, for building work on the Bodymoor Heath training ground and at Villa Park.

In 1979, following a dispute with the Bendall family, Ellis left Villa, briefly becoming involved at Wolves. While he was away Villa strode to the 1981 League championship and European Cup glory the following year. Ellis returned after that, buying out the Bendalls and ending up owning 42% of the club. The price, he has never denied, was a little under £500,000.

In 1981 the FA relaxed its rule against directors being paid. To encourage greater professionalism, it agreed that one director could be paid at each club, provided he worked full-time. Martin Edwards at Manchester United was one of the first.

Villa maintained the restriction until 1984. So in the first two years after Ellis's return he was not paid a salary - but Ellmanton Construction, of which he owned 70%, was paid "administration fees": £20,500 in 1983 and £27,500 in 1984. No further clarification was offered, and a club spokesman this week was not able to recall what the payments were for.

The club's constitution was changed in 1985 to allow one paid full-time director and Ellis became that man, his first salary £10,000. Ellmanton was also paid £30,000, again in administration fees. Ellis was paid £20,000 in 1986 and £30,000 the following year, while Ellmanton received £20,000 and then £10,000 in 1987, the last time the company was paid by Villa.

Ellis's salary climbed steadily, cruising into six figures for the first time in 1992, the year of the Premier League breakaway. Sanctioned by the FA, this split meant that the huge television money about to pour into football would not be shared throughout the 92 clubs, as was the practice in the Football League, but could be kept by those in the top flight.

That £305m influx of TV cash, the ground refurbishments imposed on clubs by the government after Hillsborough, the rebirth of football's image following Italia 90 and the launch of the Premiership persuaded merchant banks for the first time that money could be made from football. Aston Villa joined the gold rush of clubs floating on the stock market in 1996, following the model minted when Tottenham Hotspur became the first to float - unsuccessfully, as it turned out - in 1983.

The FA's rules against part-time paid directors and booming annual dividends were still in force - old deterrents against precisely the financial speculation that football clubs were now set on. Tottenham dealt with the restrictions by forming a holding company and bypassing them completely. The plcs floated free of the rules and the FA said not a word.

The game's governing body did not attempt to develop new regulations to harness the new commercial era; instead, paralysed and inadequate, it surrendered. Clubs mostly floated on the stock market at prices the City never matched again, making fortunes for the few like Ellis who had bought their shares in homelier times, while Villa fans encouraged to buy at £11 per share quickly lost money.

Ellis made £4m by selling a chunk of shares when Villa floated, retaining 33% of the club and staying on as chairman and chief executive. With Villa's turnover increasing as the game flourished and Sky's TV deals spiralled, Ellis's pay - decided by a remuneration committee of other Villa directors - rose up to and beyond £200,000. For five years, the plc announced a dividend bonanza, 8.8p on each share from 1998-2001, 7.7p in 2002. As Ellis owned 3,848,414 shares, that made him another £1.65m.

The dividends dried up in 2003 as Villa, underperforming and with many fans sick of Ellis's tenure, made an £11.6m loss. The club has lost millions each year since but Ellis's salary has increased, up to £296,555 in 2005.

Ellis's final exit and pay-off, the sale of his remaining 32% of the club to the American Randy Lerner, will net him £20.15m. His final salary package, disclosed in the bid documents, was £240,840, and as he was on a 12-month contract he will also be paid £300,840 for leaving. His total earnings from Villa (see table below) amount to £29.435m.

As for the amount Ellis put in over the years, the 1975 accounts record a £100,000 interest-free loan, repaid by the club. There may have been other loans, also long returned. Certainly Ellis did not put much of his own money in compared to what he has made from the club over the years.

"It has been my sincere pleasure," Ellis said when the Lerner deal was announced last week, "to have been involved with Aston Villa these many years, both as chairman and as a substantial shareholder."

Supporters have not always shared the pleasure. Navid Nazir, a spokesman for Villa Fans Combined, which campaigned for Ellis to go, said: "He made a fortune out of the club and now we're looking forward to seeing Villa run as a modern sports company, not as a kind of family business."

Lerner, who owns the Cleveland Browns NFL franchise and inherited his father's MBNA credit card company, which he sold earlier this year for $2.5bn (£1.3bn), is the latest overseas investor to take over a major English football club, following Roman Abramovich at Chelsea, Malcolm Glazer at Manchester United and others. His spokesman said Lerner will invest, does not believe he will make big money quickly, but expects the value of his acquisition to rise over time.

As for the implications of foreign billionaire club owners for the identity, balance and direction of the sport formerly known as the people's game, the FA is - no surprises - silent again.

Deadly Doug's deals

£3,635,391

Ellis's total Aston Villa salary packages between 1985 and 2006

£4,000,000

Amount he made from the Aston Villa share sale in 1996

£1,650,967

Dividend payments received by Ellis from 1998 to 2003

£20,148,275

What Ellis stands to make from selling his shares to Randy Lerner

£29,434,630

Total personal earnings from Ellis's years at Aston Villa

£229,000

Total payments to Ellis's company, Ellmanton, for construction work and "administration fees" in the 1970s and 1980s