West Ham’s financial position laid bare with latest accounts

We're still a long way behind the Big Six but posted one of the best operating profits in the league

West Ham co-owner David Sullivan at the Arsenal v West Ham United EPL match, at the Emirates Stadium, London, UK on 11th December, 2021.

West Ham’s newly announced financial accounts for the 2020/2021 season were recently released and showed a record turnover of £192.7m with £31.7m profit.

But the club posted a loss of £26.9m when player trading was factored in. Only Norwich City, Burnley, Newcastle lost less money last season.

We had the best operating profit in the Premier League after Sheffield United, Norwich City and Burnley.

Turnover increased 38% from £139.5m to £192.7m while TV income increased by a massive 98% from £82.5m to £163.1m.

Ticket income fell massively by 98% from £22.5m to £508,000 due to playing behind closed doors and commercial and sponsorship including corporate hospitality fell by 25% from £25.9m to £19.4m.

Meanwhile retail and shop sales grew by 13% from £8.5m to £9.7m as wages reduced by 2% from £130.8m to £129.4m which represented 67% of turnover.

At nearly £193m, West Ham had the seventh highest turnover in the Premier League, and we had the sixth highest TV income last season earning more than Arsenal last season.

Our commercial income was the tenth highest in the top flight league behind the traditional top six plus Brighton, Everton, and Leicester City.

And our wage bill of £129m was also the tenth biggest in the Premier League behind the traditional top six plus Everton, Leicester City and Crystal Palace 

The highest-paid director wages, believed to be West Ham Vice-Chairman Karren Brady, salary did increase by 30% from £1.03m to £1.33m, but the extra £300,000 was 30% of her salary deferred from the previous season due to COVID.

The Baroness has earned more than £10m since joining West Ham in 2011 and is the sixth highest paid club executive in the Premier League. Manchester United’s CEO is top with over £3m per year. 

COVID losses amounted to £28.7m of lost ticket income, £9.1m in refunded corporate membership and £4.4m in other losses.

To offset losses, West Ham made £3.4m in natural cost savings by playing behind closed doors and received a £2.5m insurance pay out.

Over the last three years, West Ham losses have amounted to £120m after four years of profits before that.

West Ham repaid loans to Media Rights and Funding and Barclays while drawing down £75m of cash from a £120m five year credit facility from MSD Holdings thought to be charged at around 9% interest per year. 

The club paid £8.6m in interest for the year, an increase of over £3.5m on the previous year.

Tripp Smith will also be paid back his £9.5m interest free loan due to a change of control cause in his loan.

As for a player trading update: £67.6m was spent on new players with  £17.5m sold giving a net player trading figure of just over £50m net for the year.

Some £54.3m is still owed to other clubs in the next year with a further £37m owed to other clubs in transfer fees over a year.

That means over £91m is still owed to other clubs in total with £27m owed to West Ham from other clubs from player sales.

West Ham’s gross spend on transfers in the last five years has totalled £412m, the club has sold £224m players in the same period leaving a net spend of £188m or around £37.6m per season of net spend.

Outstanding balance of €24.7m for Sebastian Haller was settled in 2021 with a payment to MSD holdings plus an interest fee of €2.4m.

An impairment of £9.9m relating to the disposal of a player was also recorded in the accounts assumed to be related to the sale of Haller to Ajax at a significant loss.

Gold and Sullivan deferred £3.7m of interest payments charged at 4.25% due on their £44m of outstanding shareholder loans. They have been paid over £19m in interest since first loaning the club money back in 2011. 

The £44m outstanding shareholder loan balance and £4m of accrued interest is due to be paid back this current financial year following the share buy in by Daniel Kretinsky, they will receive £48m between them in loan repayments and interest. 

This means they will have received £75.5m back from the £52.5m initially loaned to the club between 2011-2013. 

Gross debt of the club has reduced by 9% from £119.5m to £109m, and net debt decreased to £89m due to £20m of cash in the bank down 15% from last season.

The gross debt is made up of £54m of shareholder loans and £55m from MSD Holding.

In this financial year shareholder loans will be paid up in full but external debt has already increased to £75m from MSD Holdings after the club borrowed another £20m in September 2021 from the £120m five year credit facility.

The Hammers debt of £109m is eleventh worst in the Premier League. Debt is not seen as a problem if it can be serviced.

Other clubs with debts greater than West Ham are Chelsea £1.3Bn, Spurs £831m, Manchester United £530m, Manchester City £473m, Everton £409m, Brighton £306m, Liverpool £268m, Leicester City £219m, and Wolves £157m

Like last year, these annual financial figures are slightly distorted due to £26m deferred TV income from last season due to COVID. Without this £26m the accounts would be vastly different.

Next year we will get back to normal assuming games continue to be played with supporters.

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