Kieran Maguire: Aston Villa ‘forced’ to pay £10m after ex-owner goes ‘off the radar’
It is “disappointing” that Aston Villa were “forced” to step in and settle a £10million clause between former owners Tony Xia and Randy Lerner.
That is the view of finance expert Kieran Maguire, who spoke exclusively to Football Insider about the financial dispute between Aston Villa’s former owners.
The Daily Mail reported on March 2 that Villa paid former owner Lerner £10million after a legacy deal was made between him and ex-chairman Xia.
Xia purchased the Birmingham-based club from Lerner in 2016 after their relegation from the Premier League.
The Chinese businessman pledged to make Villa a “global force” after taking the reins at Villa Park, but he faced financial problems in 2018 and sold the club to Wes Edens and Nassef Sawiris.
It is not the first time Lerner has earned a payout after selling the club, with the American receiving £30million when Villa were promoted back to the top flight.
Maguire states that earn-out clauses such as this £10million payment are standard in most industries, but insists more care should have been taken when completing the sale to Xia.
“The nature of the sale by Randy Lerner to Tony Xia did have the equivalent of an earn-out clause,” Maguire told Football Insider.
“Essentially, if Villa returned to the Premier League and stayed there for three years then payment was necessary.
“Having seen Villa achieve that, there was an obligation to make the payout.
“These earn-out clauses are common in all types of industries.
“The disappointing thing is that Xia seems to have gone completely off the radar and to be fair to Lerner’s lawyers, he made sure that if there were any doubts about his ability to pay then the football club were forced to step in and pay the balance.
“It’s disappointing from Villa’s point of view and it’s evidence that further care should have been taken when selling the club to Xia in the first place.“
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