The View From Away – Taking Care of West Ham’s Business

Apologies to the fans of Bachman Turner Overdrive (a truly great Canadian band, don’t hate me Nick), but its time to talk fiscal status of West Ham (insert my wife’s obligatory eye roll as the engineer does fiscals without checking with his wife, the accountant).

With the amount of money available to the clubs in the Premier League, West Ham included, it is hard to imagine that clubs at this level struggle fiscally, but clubs like Bolton Wanderers have recently gone into administration. Today, I want to present a quick look at the fiscal information that came out of the great Kieran Maguire interview by Geo Mackie during the Hammers Chat 24 hour YouTube marathon for Isla Caton.

In the last several years, the board has moved to reduce our overall debt. In the previous fiscal year, they paid off debt to move the club from a debt level down. At this time, Sullivan and Gold are owed roughly £45M (and charging interest) while Tripp Smith has loaned the club around £9.5M, and bits and pieces of other loans bringing the total debt to £65M.

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The interesting part is that while many other owners have loaned money interest-free, Sullivan and Gold are taking an interest. In some cases, the other owners have very deep pockets and appear to be unconcerned about the interest. For other clubs, they are fiscally more constrained than West Ham could be, and the interest would be unlikely to be able to be paid back. Having said that, Liverpool pays interest, but at 2%, which is quite low and lower than West Ham (estimated at 4% to 6%).

To be clear, the debt owing by each club is hard to get exact numbers on, with some clubs borrowing heavily from very deep-pocketed owners, and others not publishing easily accessible data (Kieran kept referring to a spreadsheet he has that I would LOVE to peek at). The most interesting comment in the interview was the statement that “it’s very hard to figure out what is going on at Man City.”

Apparently, while Lady Karren Brady is taking a £1M a year wage, the directors at Man City are not. Lady Brady’s situation is not unusual, as other club’s board members take up to £4M a year (Man United) and Daniel Levy takes £3M at Tottenham.

There is certainly money to be made but there are challenges. From last years results, while West Ham made slightly more than £18M, Tottenham made nearly £140M. 7 Premier clubs lost money in 2018, despite making a minimum of £80M+ in TV and international revenues.

This payout was slightly more than £79M from this year, with West Ham earning a slightly more than £119M from TV, facility, and prize money. This was 10th highest in the PL this year.  However, it seems likely that we will have a large loss this year based on our business last year based on our spending on transfers.

Wage structure was considered appropriate. UEFA apparently gets nervous if a club spends more than 70% of their turnover on wages. West Ham has been spending around 60% over the last few years. The rumor of spending £30M on transfers was considered a bit low, as it seems that £40M is more accurate. I could write for hours on this, but I really encourage you to go watch the clip on YouTube (this interview starts at 3:37:34).

Finally, serious respect for the Hammers Chat guys for doing their 24-hour fundraiser. In the end, they raised more than £4000 for Isla. If you want to donate to Isla (@islasfight) now, you can do that at her Just Giving page. You can follow Hammers Chat at their homepage.  You can follow Kieran Maguire on Twitter at the price of football (@KieranMaguire).