‘Our league position last season cost us a record club turnover’

We take an in-depth look at the club’s incomings and outgoings, which were revealed last month

General view at the West Ham United v Manchester City EPL match, at the London Stadium, London, UK on 16th September, 2023.

West Ham have published their latest financial accounts, which confirmed turnover for last season with £236.7m of revenue that was down £16m from the previous season’s record club turnover of £252.7m. Our final league position was the main factor in a dip in revenue, and the Europa Conference League final prize money was received after 31st May last year so will feature in this season’s account published this time next year.

We finished 14th, seven places down on the previous season’s seventh place and had 21 games televised on UK television, two less than the previous season. We made a record-breaking investment of £183.9m in the men’s playing squad in the summer of 2022 which caused player transfer amortisation to grow to £65.3m which led to a net loss before tax of £18.3m.

Ticket revenue was just £300,000 lower at £41m thanks to our European run at home. Commercial revenue/sponsorship grew slightly (£400,000) to £35.1m while retail/club store sales slightly fell to £12.91m.

TV income was the biggest drop in revenue terms, dropping to £147.58m from £163.3m the previous season causing a drop of £15.72m after we finished lower in the league costing us over £2m per place. Overall wages were slightly up at £136.8m, up £1m from £135.7m the previous season.

Vice Chairman’s Karren Brady annual pay packet dropped from £2.24m to £1.37m last season mostly due to a bonus she received the previous season. We posted operating costs of £190.6m on revenue of £236.6m leaving an operating profit of £48.4m, transfer payments of £65.3m wiped that out causing the loss of £18m.

We paid a second instalment to the London Stadium owners of £3.94m as part of a windfall tax caused by Daniel Kretinsky buying into the club. No interest was paid to any directors and no loans are owed to any directors.

We paid off the £55m loan to MSD Holdings owned by Michael Dell and opened a £40m overdraft with Barclays Bank. A final interest charge of £945,322 was also paid on 7 August 2023 to MSD. The accounts, published at the end of December last year, show a net transfer spend last summer of £4.7m plus £12.7m of potential add-ons but this doesn’t appear to add up on widely reported figures published at the time.

Outbound: Rice £100m + £5m of add-ons, Vlasic £7.75m plus £2.6m of add-ons and Scamacca £21.6m plus £4.3m of addons. This totals £129.35m plus £11.9m of sales. Inbound: Kudus £37m plus £2.6m of add-ons as confirmed by Ajax statement, Alvarez £32.8m plus £2.6m of add-ons as confirmed by Ajax statement, James Ward Prowse £30m, Mavropanos £19m plus £4.5m of add-ons.

This totals £118.8m plus £9.7m of add-ons. Reported figures suggested a transfer surplus/profit of £10.55m so there is a £15.25m discrepancy in the reported official transfer financial figures and £3m in the add-ons. Agent fees will probably account for some of this particularly on the two Ajax players.
The club paid a delayed player loan fee of £430,828 in June 2023 to Spartak Moscow in respect of Alex Kral. Interest of £21,144 was also paid.

This payment had previously been forbidden due to the sanctions imposed after Russia’s illegal invasion of Ukraine, but was settled following a change of ownership at the club and an instruction received from FIFA. We paid a £1.8m fee to Barclays Bank to get early access Arsenal’s second instalment of £30m for Declan Rice due in July 2024. We paid the equivalent of 6% interest to the high street bank to access the cash early.

The accounts reveal that we paid £3.57m in London Stadium rent last season slightly down from £3.64m we paid in rent in 2022. But what the accounts show is that West Ham have no FFP concerns this January, football finance expert Kieran Maguire told me on Moore Than Just a Podcast.

West Ham have lost £32.9m over the last three years but Premier League clubs are allowed to lose up to £105m over three years when a shareholder injects cash as Daniel Kretinsky did two years ago in the form of a rights issue worth £125m. We have also not breached the UEFA loss target over three years as that limit is set at 60m euros, which equates to around £52m.

There had been concern that West Ham were close to the limit of wages and transfers to turnover limit but Maguire insisted this was not the case due to the Declan Rice money last summer. He explained that the UEFA financial monitoring period runs from 1st January 2024 to 31st December 2024 so that the Rice money is included to give West Ham a massive FFP buffer.

We are allowed to spend 80% of our annual turnover on wages, transfer and agent fees so with nearly £237m of revenue last season, we should have an expenditure budget of around £190m this season. We can exclude non-playing and coach staff wages plus virtue spending on infrastructure, community projects, the Academy, women’s football and training.

With West Ham wages around £137m and transfer installments around £65m per season, there had been concern that the Hammers would be forced to sell to buy over January. But Maguire said that the Declan Rice money gives the Hammers a nice £100m buffer so West Ham can spend big should they wish to.

UEFA uses a metric called Football Net Debt, which is borrowings/loans minus cash, plus transfer creditors less transfer fees due to the club. In the last set of West Ham accounts published it shows on 1st June 2023, we owed £55m in a bank loan to MSD Holdings, £180.5m was owed to other football clubs in future transfer payments so a total debt £235.5m.

At the same time, we had £35m in the bank and were owed £18.5m by other clubs in future transfer payments so the football net debt was £127m. This was before the Declan Rice sale for £100m in July 2023, and the MSD loan of £55m was paid off in August 2023.

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