West Ham 2018/19: Flares’n’Slippers

In January 2020 David Sullivan, West Ham’s controlling shareholder said “Overall, I believe the club’s in a far better state than 10 years ago” so we thought we’d put that to the test with a look at the club’s finances during that period.

Decade of success or standing still? The West Ham that Sullivan and Gold acquired from the former Icelandic Bank owners was certainly in crisis, but have their efforts improved the happiness of fans who now attend the rented London Stadium?

Rebelling fans know West Ham have just announced their accounts for the year ended 30 June 2019, and like events on the pitch last season, disappoint more than excite.


A Football club generates income from three main sources, matchday, commercial and broadcasting.

The matchday income for West Ham in 2018/19 was £27.1 million, which is just £200,000 more than the club’s final season at the Boleyn, and £7 million more than most of the preceding seasons.

Having this amount of matchday income puts West Ham 7th in the Premier League, but a long way behind the ‘Big Six’ that fans thought the club would be challenging when they said farewell to their spiritual and cultural home in 2016.

Every club generates matchday income by (number of matches x average price per ticket x average attendance) and here despite big attendances West Ham are ahead of the provincial clubs but behind the elite.

Relatively low prices at the London Stadium, which has a traditional old school working class fanbase, coupled with fewer matches than those clubs playing in UEFA competitions, meant that West Ham generated only 28 pence per seat for every £1 that Chelsea made last season.

Being tenants at the London Stadium also means that West Ham can effectively only make cash from the stadium for 19 days a season (plus any home cup matches) whereas Spurs can sweat their asset in the form of the new stadium with NFL matches, conferences, catering and concerts.

Every club has a season ticket price policy and West Ham, to their credit, seem to have some available at £299 (£320 for 2019/20) but for some matchdays the cheapest adult tickets are £55 each, which doesn’t include the binoculars needed to see the pitch from these vantage points.

Being able to exploit the modern facilities of the new stadium for commercial gain was another justification for the move in 2016, and this appears to have some merit.

A look at the commercial income totals shows that West Ham have doubled this revenue source over the last decade, with a noticeable jump since moving to the new stadium in 2016/17.

Commercial income follows that of matchday in that West Ham are again ‘best of the rest’ (Everton’s should be treated with caution following their deals with Putin pal Alisher Usmanov) but still far behind the elite.

Keeping up with the Big Six of the Premier League is unrealistic for West Ham unless they can offer sponsors UEFA competition exposure or the attraction of players that have huge social media followings.

A look at Broadcasting income shows a similar story, with West Ham recoding record figures that look good compared to the club’s history, but pale into insignificance when matched against the peer group they want to challenge.

The increase in broadcast income was mainly due to West Ham finishing 10th last season compared to 13th in 2017/18, as each additional place is worth just under £2 million.

The importance of qualifying for European competition is evident from the above table which shows the benefits to the elite clubs for reaching the latter stages of the Champions and Europa League, which can be worth up to an extra £100 million in prize money plus additional gate receipts and sponsor add-ons.

Having European qualification would change things for West Ham but realistically they would have to be regular participants there before competing in the same pond as the ‘Big Six’.

Even if the club did make it to the Europa League, they are now competing for places with Everton, Wolves and Leicester domestically, all of whom have owners who are keen to pour more money into their clubs to secure higher places in the table.

Broadcasting income growth has fallen domestically for the three years starting 2019/20 but the rise in the international rights has offset that, realistically there is limited future growth in traditional TV rights.

Overall West Ham are stuck against the glass ceiling in terms of being the 7th biggest revenue generators in the Premier League but still only earning half of that of Arsenal, the next club in the earnings league.


Like it or lump it, player related expenses are the highest element of a club’s cost base and generate endless discussion from fans and the media.

Every club needs to pay competitive wages to attract talent, resulting in what Sir Alan Sugar calls the ‘prune juice’ effect of additional money coming into the top of the game quickly exiting at the bottom in the form of player wages and transfer costs.

Year on year in 2018/19 wages increased by over 27% to an average weekly sum of £63,000 for first team regulars.

No one will be surprised that West Ham have the 8th biggest wage bill as they have the 7th biggest income stream, what will disillusion fans is the failure to make more progress on the pitch given that the unpopular owners have invested money on the pitch, albeit poorly.

The concern with the wage bill is that West Ham spent £71 on this for every £100 of income, UEFA recommend keeping this to no more than £70 so realistically the club have limited wiggle room in recruiting new players unless some existing ones leave.

Having a new signing does not mean that the whole fee is charged as an expense immediately due to the accounting dark art that is amortisation.

Amortisation is the effective rental cost of a player in relation to the transfer fee paid for his registration.

Numbers for individual transfer fees are difficult to obtain, but amortisation totals give a good long term indicator of the investment in players by the club.

Amortisation is the transfer spread over the contract life so when West Ham signed Haller for £40 million on a five-year contract, this will result in an annual amortisation charge of £8 million a year.

Squad amortisation for 2018/19 was a record £57 million, up 40% on the previous season, again suggesting investment was made, but the decisions made by the recruitment team were unsuccessful.

Overall West Ham’s amortisation cost for the last decade was £270 million, and has increased noticeably in recent years, but this has not turned into better football being seen by fans.

Under a succession of managers West Ham’s recruitment policy looks poor when compared to the amortisation costs of the likes of Spurs or Leicester, with Liverpool’s being only moderately higher too.

Looking at the rapid increase in amortisation costs indicates that West Ham have spent large sums recruiting players from other clubs and paying them handsomely, but the quality of the recruitment must be called into question.

Life in the boardroom at West Ham isn’t easy in the sense that many fans blame Gold, Sullivan and Brady for the lack of progress on the pitch, but this is offset by a 27% pay rise for West Ham’s CEO.

Ed Woodward at Manchester United, another unpopular executive, is the highest paid club CEO but there are now a considerable number earning million pound plus sums each year.

Some West Ham fans may be surprised that the club did make over £12 million profit last season from selling players, nearly all of this is likely to be in respect of Kouyate joining Crystal Palace and Reece Burke going to Hull.


So overall West Ham went from a profit before tax of £18 million to a loss of £28 million in 2019.

By looking at the above table it’s evident that West Ham’s player policy is the main reason for the reversal of profits is player related.

Owners David Gold and Sullivan have not endeared themselves to fans by charging a further £1.9 million on their £45 million loan to the club though, taking the total interest charges to over £18 million, not a game changer to the club, but high when compared to some other owners, including Mike Ashley at Newcastle, who for all his faults has lent £111 million interest free. .

West Ham managed to fund the loss last season by borrowing money secured on future broadcast rights, whilst this is a common event in the Premier League it will cause problems if the club is relegated.

Losing Premier League status would be challenging for West Ham, but the auditors seem happy with the club’s going concern status and many players have significant relegation wage clauses in their contracts.

Player trading

West Ham signed players for £108 million in the year to 31 May 2019 as Anderson, Diop, Yarmolenko, Fabianski and Co were recruited. Sales were a modest £14 million. Since then the club spent a net £36 million in the summer 2019 window and Bowen, Randolph and Soucek in January 2020.

Over the course of the last decade West Ham spent a total of £444 million on players and recouped about a third of it in sales. What is noticeable is that the club has made many of the player signings on credit, which could be a concern if the club is relegated.


West Ham have borrowed money from a variety of sources. Gold and Sullivan have lent £45 million and presently charge interest at 4.25%. In addition, there was a £42 million loan from Rights and Media Limited, which was half paid off shortly before the year end and so reduced the liability at the balance sheet date. The loan was then effectively renewed shortly after the year end. David Sullivan candidly admits that 75% of the club’s income is effectively generated between 31 May and 31 July.

The criticisms levelled at the owners are that other club owners have lent money to the club and not charged interest, including the US investors at West Ham, who own 10% of the company. Whilst the interest charged ultimately is relatively insignificant (1.8%) of revenue if the club is not delivering on the pitch then it sticks in the throat of those who have given up what has been a huge part of their lives for an anodyne extension to a shopping centre.


So, where does this leave West Ham? There is no doubt that the Gold, Sullivan and Brady are unpopular with a large proportion of fans. They hugely overpromised and underdelivered in relation to the benefits of the stadium move. The very big financial gap between West Ham and the ‘Big Six’ is as big as ever. What was so great and identifiable historically about West Ham has been lost in the shape of being representative of East End working class culture has been replaced with a very bland, very corporate and very anonymous ‘matchday experience’ that is for many a price too high. If the club was closer in the Premier League table as it is in the income and wage table then perhaps a lot would be forgiven, but until then it’s going to be a hostile environment and a sense of loss by the fans.

West Ham 2018: Plastic Passion


Getting to the London Stadium was supposed to be a game changer financially for West Ham, according to the club’s owners, David Gold and David Sullivan.

Once the move was completed the additional capacity, combined with the greater opportunities for developing sponsorship and commercial agreements should have given the club the extra income to allow West Ham to break through the glass ceiling of the ‘Big Six’ clubs who had taken nearly all of the Champions League places this decade.

Local fans however have not been happy with the move, leading to an uneasy relationship with the owners that manifested itself last season on occasion with demonstrations and hostility towards the board of directors.

During the first two years in the London Stadium there have also been conflicts between the club and the landlords, as well as grumblings from the London Mayor that West Ham had a deal that was too generous to the club.

As the results for 2017/18 came out, has the club moved on to a new level, or has the move been more trouble than it was worth?

Key figures for year to 31 May 2018: WH Holding Limited

Income £176.3 million (down 4%).

Wages £106.6 million (up 12%) .

Operating profit £22.0 million (down 55%)

Player signings £60.9 million (down 25%)

Player sales £57.7 million

Shareholder loans £54.5 million.


Nearly all clubs split their income into three main sources, matchday, broadcasting and commercial, for comparative purposes, and West Ham are no different.

Despite having now spent two years in the London Stadium, which had a capacity of 57,000 last season compared to the Boleyn Ground, where I saw my first ever football match in 1971, matchday income last season was lower than in the final season of the 35,000 seater iconic ground that was West Ham’s home for so long.

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Second season syndrome is often evidenced by lower attendances, but this wasn’t the case for West Ham as tickets sold out for every game, but even so matchday income fell £4 million as there were four fewer fixtures played due to non-participation in the Europa Cup and less domestic cup progress at home.

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Unless West Ham can either further increase the stadium capacity (potential is 66,000), increase prices or achieve a good UEFA competition run it is difficult to see how West Ham can narrow the gap with the clubs above them, especially with Spurs, should their new stadium materialise this season, having a ticket pricing structure aimed at lightening wallets.

Longer term West Ham could potentially sell more tickets to the prawn sandwich element of the fanbase, who are prepared to pay higher prices for hospitality tickets and all that goes with that the commercialisation of the game.

Lowering season ticket prices at the London Stadium was one of the cornerstones of the owners’ rationale behind the move away from the Boleyn, but once reduced, it is difficult to see how prices can then be increased to narrow the matchday income gap with the clubs above West Ham.

In the case of broadcast income, West Ham still remain an attractive proposition to the TV companies, with 17 Premier League matches being shown live domestically in 2017/18, the highest of any team in the bottom half of the division.

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Variances from season to season only tend to arise during the three-year period of a TV deal if the club finishes in a different position to the previous season, so the fall from 11th to 13th resulted in a slight fall from this income source.

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Another way of increasing broadcast income is to make progress in UEFA competitions, as the sums available to clubs for these rights are worth up to £100 million a season and this has created a glass ceiling for clubs such as West Ham keen to break into the ‘Big Six’ who have vacuumed up nearly all of these riches in recent years.

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No one was expecting West Ham’s commercial income to fall last season, so the 6% decrease caused eyebrows to raise as this was the area the owners hoped to grow the most with the stadium move

A reason given for the decrease is that the commercial income for 2017 contained ‘one-off factors’ which were behind the 25% increase that year, presumably linked to the move away from the Boleyn.

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Relative to other clubs West Ham are way behind the self-styled ‘Big Six’ who have the advantage of being able to sell commercial packages to sponsors wanting regular Champions/Europa League exposure, as well as more lucrative overseas pre-season visits to where their football tourist fanbases are located.

Everton’s commercial income being higher than that of West Ham may surprise some Hammer’s fans, but this is partially due to a lucrative training ground naming rights deal with the business partner of Everton’s owner.

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Due to the sums paid by TV companies for broadcast rights, this source represented 2/3 of West Ham’s total income for 2017/18, but this is a lot less than for some other clubs who are effectively little more than entertainment slaves for BT and Sky.

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Income overall for West Ham at £176 million puts them into the top half in the Premier League, and it is difficult to see them being overtaken by the clubs below them, equally it is unlikely to see how they can move to the £300 million a year gang who dominate Champions League places.


Largest costs for clubs are those relating to players, in the form of wages and transfer fee amortisation.

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Despite all income types falling in 2017/18, the wage bill increased by over 12% as a combination of new players and new contracts for existing squad members proved to be expensive.

Oberving individual player wages is not really within our realm but based on a formula that seems to generate decent benchmark figures, the average West Ham player is paid about £51,000 a week, but this is surprisingly below smaller clubs such as Southampton and Crystal Palace.

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Some comfort can be gleaned by looking at the club’s wages to income ratio, although this has increased it is still within the £60 of wages to £100 of income threshold that is deemed to be ideal for a Premier League club.

Experts divide transfer fees paid over the contract period to calculate something called amortisation and this fell by 10% in 2017/18 despite West Ham breaking their transfer fee record by signing Arnautovic for £20 million on a five-year deal, which gives an amortisation cost of £4 million (£20 million/5) per year.

Looking at amortisation, it is possible to get a broader feel for a club’s longer-term transfer policy rather than just a couple of windows of buying a selling within an individual season.

Luckily for the present season, with Spurs signing no players during the 2018/19 window, and West Ham making substantial investment in the squad, the Hammers should jump to 7th in the amortisation table, suggesting that the owners have backed the manager in the transfer market.

Ever since moving to the London Stadium the club have been involved in a rent dispute with the owners and for 2017/18 the rental cost rose 25% to £2.9 million.

Reviewing the profit and loss acount one other major cost for the club is loan interest, which was about £75,000 a week during 2017/18, about half of which was in respect of loans from Messrs Gold and Sullivan.

Selling the Boleyn Ground in 2016/17 generated a one-off profit of £8.6 million for the club, which reduced overall costs (although the new owners, Boleyn Phoenix Limited then seemed to sell it to Barrett Homes immediately for £19 million profit for themselves, this seems strange for such a shrewd property trader such as David Sullivan).

Directors’ pay

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West Ham’s CEO Karren Brady saw her pay package stabilise at about £900,000 in recent years, reflecting the faith that Gold and Sullivan see in her, although according to some West Ham bloggers she has substantial other income streams too.

By the standards of the Premier League Brady earns about the average amount, although eyebrows will be raised at the lack of payments to executives from some other clubs, with Arsene Wenger and Michel Platini seen muttering ‘financial doping’ to anyone who is prepared to listen.

Profits and Losses

Profit is a bit like love or deciding which is the hardest Tellytubby, in that it is difficult to agree on a universal definition.

Broadly profits are income less costs, and the headline figure for West Ham was an £18.3 million profit last season, or £350,000 a week. This figure is distorted by a couple of factors though.

In 2016/17 the club’s headline profit before tax included the gain on the sale of the Boleyn Ground as well as £28 million from selling Payet and Tomkins. Similarly in 2017/18 the club made £30 million by selling the likes of Andre Ayew, Sakho, Fletcher and Randolph.

Stripping out the above distortions gives something called EBIT (earnings before interest and tax) profit, which is a more balanced look at what recurring profits would be without the one-off impact of player sales and similar non-trading transactions.

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This shows that instead of a profit, West Ham actually lost about £120,000 a week in 2017/18, as the investment in player wages and the decrease in income combined to reduce profits by about £17 million.

If non-cash costs such as player amortisation are stripped out, the position however improves, and West Ham have an EBITDA profit (Earnings Before Interest, Tax, Depreciation and Amortisation).

EBITDA is an important profit measure as it is the closest to a ‘cash’ profit that analysts use to assess a business and shows how much the club has to invest in player acquisitions from its day to day activities. West Ham have made over £207 million in EBITDA profit over the last six years.

Whilst Gold and Sullivan correctly can claim that they haven’t paid themselves a penny in wages since acquiring the club in 2010, they have lent it money as the previous Icelandic Bank owners went bust. Gold and Sullivan have charged interest at between 4-6 % on these loans since then. They claim that this is less than would be charged by commercial banks, and so they are doing the club a favour. Other ‘local’ owners of Premier League clubs, such as the Coates family at Stoke, Tony Bloom at Brighton and Dean Hoyle at Huddersfield have all lent money interest free.

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Gold and Sullivan however have charged the club nearly £17 million in interest charges and have taken out over £14 million of this out in the form of cash since August 2017.

Player trading:

According to the accounts West Ham spent over £60 million in 2017/18 on player signings, substantially less than the previous year. This doesn’t necessarily buy you a lot in the present Premier League market though.

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The net spend was just £3 million though.

Compared to their peer group, West Ham’s spending was at best described as modest in 2017/18.

Since the end of the season the board have backed new manager Manual Pelligrini with a net £89 million on new signings such as Felipe Anderson.

Funding the club

Clubs usually have a choice between third party loans (which attract interest payments) owners loans (which may or may not charge interest) and shares (which occasionally pay dividends).

In the case of West Ham the club have focussed on interest bearing borrowings.

Gold and Sullivan did initially bail out the club but have not lent anything since 2013. Since then the club have taken on overseas investments and also borrowed money on a short term basis which is then repaid when the Premier League forward the first instalment of the annual broadcasting payments.


West Ham’s promises of a financial boost following the move to the London Stadium has not to date materialised, although the uneasy relationship with fans that resulted in hostility towards the board has been reduced to simmering resentment as results have improved under Pelligrini.

Whilst there is scope for income to increase if the capacity of the London Stadium is allowed to reach its maximum potential, realistically the gap between the club’s finances under the present owners, and that of the ‘Big Six’, is likely to result in the annual battle being with the likes of Everton. Leicester and whoever else is showing some short term form (last year Burnley, this year Wolves and Bournemouth) for the less than coveted title of ‘Best of the rest’. Whether fans who have sacrificed their historical home at Upton Park will think this is a price worth paying is yet to be determined.

West Ham United 2017 Financial Results: Fool’s Gold

After an emotional farewell to the Boleyn Ground the previous season, West Ham moved to the London Stadium, and fans had high expectations that the club could start to chip away at the glass ceiling of the self-styled ‘Big 6’, who have a disproportionate share of the income, and therefore best players, within the Premier League.

Those hopes failed to materialise. A poor start in the Europa League, where they were knocked out before the group stage by the team that finished 6th in the Romanian League the previous season, was followed by problems with the new stadium in terms of logistics, stewarding and atmosphere. A spat with the council resulted in the capacity of the London Stadium being capped at 57,000.

In terms of finances, the boost from moving to a more modern stadium seems to have been a mirage in some ways, and fans are unhappy, losing their home is one thing, losing it and having no benefits is another.


Clubs have three main sources of income, matchday, broadcast and commercial. In 2016/17 West Ham’s income rose by 29%, so it looks as if Sullivan and the Gold brothers (whom Claudio Ranieri apparently calls Dilly-Dee and Dilly-Do) had masterminded a superb transformation of the club. Over the last five years the club’s income has more than doubled, how much of this achievement is due to the owners, and how much is due to happenstance?


Moving from a 35,000 to a 66,000 capacity stadium in theory should have created a big bump in matchday income, but the move only resulted in a 6% increase from £26.9m to £28.6m.

There are a number of possible issues in relation to this surprisingly low increase.

West Ham had a dispute with the landlord and licence holders of the London Stadium, which restricted capacity to ‘just’ 57,000, although this is still substantially higher than the Boleyn Ground.

Season ticket prices were available from £299, and Under-16’s just £99, which looks from afar as if the owners were using a combination of a new TV deal and higher attendances to make watching the club more affordable.

It could also be that the figures for the final season at the Boelyn were inflated by extra income generated in relation to moving from the stadium, as they are substantially higher than 2014/15.

Compared to other clubs in the Premier League who have reported to date, West Ham are stuck in the middle.

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The above shows how many millions are generated by matchday income, and the proportion of total income from that source.

Matchday is worth £1 in every £6 of total income to West Ham.

If the club are serious about competing with the regulars at the top of the division, then they need to work out how to get more money from matchday income.

Liverpool increased their capacity to 54,000 in 2016/17 by extending the main stand, but many of the additional tickets are sold to the prawn sandwich brigade, who are prepared to pay premium prices.

West Ham also have a large number (52,000) of season ticket holders. Add 3,000 away fans, and that only leaves 2,000 tickets available for irregular fans each match.

Like them or loath them, these fans/daytrippers/gloryseekers/football tourists (delete as necessary) generate a lot of money for a club, as they pay higher prices for tickets and are more likely to spend money on merchandise.

Some other clubs, with a more international fanbase, exploit this by restricting the number of season tickets to maximise their return from the football tourist brigade.

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West Ham would have earned more money per fan had they progressed further in the Europa League, but Chelsea also did not have a European campaign, and they earned twice as much per fan.

Some credit (awaits flaming) could be given here to Sullivan/Gold for not taking fans to the cleaners in respect of prices.


Broadcasting income was up by over a third to £119 million. This was due to the Premier League’s new deal with BT/Sky commencing.

The deal is for three years, so there will be no significant changes in this income source unless West Ham can (a) increase the number of appearances on television (they get £1 million for every additional appearance above ten), (b) Qualify for European competitions, or (c) Achieve more success on the pitch and move higher up the table (each position is worth £2 million more than the one below, so finishing 7th instead of 11th is worth £8 million to a club).

Whilst relegation is a nagging doubt rather than a huge concern at present this season, clubs in the Championship with parachute payments initially earn about £41 million from this source, and those without parachute payments about £7 million.

West Ham presently earn about two-thirds of their income from TV.

Winning the Europa Cup was worth £40 million in TV money last season to Manchester United, West Ham picked up £400,000.


West Ham’s commercial income rose by a quarter to £35 million. This is impressive, but also reflects the market in which the club operates.

They don’t have the same international appeal as Manchester United, Liverpool or one or two other London clubs (clearly excluding small outfits such as Palace).

This means that they are competing with the likes of Everton, Newcastle, Southampton etc for the sponsors dollar.

We’ve heard anecdotal stories of sponsors playing clubs off against each other, so that if West Ham are looking for £10 million for a shirt deal, the sponsor will say “Newcastle will do it for £6 million, so drop your asking price or we go elsewhere”.

From the point of view of a generic overseas bookmaker, they don’t particularly care whether their logo is on the front of a Burnley, West Brom or Palace shirt, so long as it gets regular exposure on TV.

It looks as if West Ham have leveraged on the move to the new ground to increase commercial income, and there are potential future gains here too as old deals the.

This issue has implications for financial fair play too, as clubs are limited a £7 million increase in wages each year, plus any money generated by matchday, commercial income and gains on player sales.

The new stadium does give West Ham some scope to increase this income source, but the relationship with the landlord does restrict some of these opportunities.

They should therefore be at the top of their peer group of non ‘Big Six’ clubs (and Spurs are not really part of that elite to be honest), which will give them some additional buying power in the player market.


The main costs for a club are player wages and player amortisation (transfer fee costs spread over the life of the contract).

So when Andre Ayew signed for West Ham in 2016 for £20 million on a four year contract, this works out as an amortisation cost of £5 million (£20m/4 years) a year.

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West Ham’s wage bill rose by 12% to £95 million in 2017. It’s a significant increase and puts the club ahead of some of its rivals, but is still behind Everton (£105m), Leicester (£112m) and some others that the club probably considers to be in the peer group.

The amortisation charge increased too, and if the two elements of player costs are added together then West Ham have doubled their player running costs over the last five years from £70 million to £140 million.

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There’s a huge gap between this group of clubs and those that have dominated English football in recent years, and it’s difficult to see, especially with the new wage control rules of Financial Fair Play (FFP) how this can be bridged, unless the club qualifies for Europe, and for that you need better players, who want higher wages. This vicious circle prevents anyone breaking through the glass ceiling.

Although player wages are not disclosed, companies must show the pay of the highest paid director. In the case of West Ham this was £868,000, slightly lower than the previous year, but enough to allow the recipient to have the occasional pie and mash.

Whilst the name of the highest paid director is not shown, we suspect she has the initials KB.

One new cost for West Ham this season is the rent of the London Stadium. For reasons best known to themselves the accountants call rent ‘operating leases,’ and this rose by about £2 million in the year, which is in line with the figures quoted in the media.

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As well as the running costs of the club, there are interest costs in respect of borrowings made by the club.

Fans might have thought that the club would have been able to repay all debt following the sale of the Boleyn, and therefore not pay any interest, but they would be wrong.

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The club’s interest cost worked out at £97,000 a week in 2016/17. Whilst this is a lower figure than the previous season, half of it went to shareholders, in the form of loans from Gold and Sullivan.

This does mean that they strictly are correct in claiming never to have taken a penny as a wage from the club, trousering £50-60,000 a week in interest should prevent them from needing to sell The Big Issue just yet.

Gold and Sullivan have charged the club £14,875,000 in interest on loans since 2011/12.


Profit is an abstract concept, in theory it should simply be income less costs. In practice there are a range of profits quoted, depending on which costs are included.

West Ham in their press release stated they made a record profit of £43 million for 2016/17, which is the profit after tax figure. This is however after considering gains on player disposals, including that of Dmitri Payet, which generated profits of £28.4 million.

In addition, the club showed a profit on the sale of the Boleyn Ground of £8.6 million, and here we enter some choppy financial waters, which will be discussed in depth further in this epistle.

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Whilst we expect to see clubs making a profit on player sales each year due to the way player signings are treated in the accounts, this figure is volatile as it depends on individual player disposals.

Excluding player disposals, West Ham’s EBIT profit (which is profit excluding one-off transactions such as the Boleyn transaction and player sales, before interest and tax) was £11.4 million, much lower than the quoted figure, but still an improvement on the previous year’s EBIT loss of £3 million.

The move to the new stadium may have helped here a little, but the main driver has been the extra £33 million of TV money.

Adding back the non-cash expenses in the form of depreciation and amortisation gives an EBITDA profit of £58 million, which is 77% higher that the previous year’s £33m. It is this profit figure that many analysts use when valuing businesses, and here West Ham have done reasonably well.

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Player activity

West Ham spent a record £80 million on players in 2016/17, including Ayew, Snodgrass and Lanzini. Whilst this exceeds the club’s previous transfer activity, there is still a gap between the club and those they seek to compete with.

If you take away player sales from the purchases, then West Ham’s net spend was £40 million, roughly in line with the previous season.

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Hidden in the footnotes to the accounts are a couple of interesting figures (interesting only to those who are still reading this tedious summary we suspect). The first is contingent liabilities.

This is the sum the club must pay to players and former clubs if certain achievements (appearances, trophies, international caps etc.) are met. This was £2.3 million and compares to £111 million for Manchester City and £45 million for United at the end of June 2017.

This suggests that West Ham have a different approach to the two Manchester clubs when signing players, aiming for a set fee with little based on future performance.


Many owners lend money to their clubs, if you look at the likes of Middlebrough, Newcastle (with the hated Mike Ashley), Brighton, Huddersfield, Stoke and so on, they all have owner lenders.

What these clubs also have in common is that the owners don’t charge interest on these loans.

Messrs Gold and Sullivan have lent the club £45 million, but have charged interest at 6% interest. The club then paid the owners £10 million in partial payment of the interest that had clocked up in August 2017.

This is perfectly legal, if somewhat at odds with the philanthropic approach taken by many other club owners.

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The sale of the Boleyn Ground

It’s very confusing working out exactly what has happened in terms of the financial treatment of the club’s old stadium. If we’ve not bored the pants off your already, stop reading now, as it’s about to get even more tedious.

The club booked a profit of £8.6 million on the sale, but the history of the ground in the accounts is best described as erratic.

In 2012 the Boleyn was measured at a fair market value of £71.2 million. Admittedly this was for the stadium as well as the land surrounding it.

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The following year the club decided to change the way it measured the Boleyn in the accounts, on the grounds that it was moving to the London Stadium.

This meant that the value of the stadium fell by about £40 million.

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By the time the club had vacated the Boleyn in June 2016 the accounting value was about £30 million. However, this bears no resemblance to a market value. If the club booked a profit of just under £9 million then the sale price appears to be about £39-40 million.

According to the club, it sold the Boleyn to a property development company called Galliards, and inferred that they had turned down higher offers, but that Galliards would preserve some of the history of the club.

However, there appears to be a third party involved called Boleyn Phoenix Limited.

Boleyn Phoenix Limited was incorporated in January 2014 and is listed as a property development company. It has two shareholders, Galliard Holdings Limited and Mount Pleasant Developments Limited.

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Boleyn Phonex was mentioned by Newham Council in relation to the redevelopment of the Boleyn Ground. The comments were not very positive.

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Boleyn Phoenix Ltd had no sales in the first few years of trading, but in the year ended 31 March 2017 sprung into life and showed a profit of over £16.7 million. A screenshot of a cell phone Description generated with very high confidence

Having made a huge profit, presumably on a deal for a property costing about £40 million and selling it for nearly £60 million. Boleyn Phoenix rewarded its shareholders by paying them a dividend of nearly £16 million.

Could this property have been the Boleyn Ground itself? It could be a coincidence.

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Therefore Galliard Holdings would have received a dividend of nearly £8 million, as would Mount Pleasant Developments Limited.

Mount Pleasant Developments Limited have one shareholder, Vince Goldstein.

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Now clearly there could be many Vincent Goldstein’s around, but a quick bit of Googling brings one to the fore in terms of property development.

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This particular gentleman (who may or may not be the shareholder in Mount Pleasant Developments) is connected to the Rock Group and is the cousin of the former Vice-Chairman of Spurs, Paul Kemsley, who some may know from ITVBe’s magnificent The Real Housewives of Beverley Hills, where his wife, Dorit Kemsley, is one of the stars.

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According to West Ham the Boleyn was sold to the Galliard Group, which could perhaps have been Boleyn Phoenix. The Boleyn Ground was then rapidly sold to Barratt Homes.

The Land Registry says that the price paid for the Boleyn Ground by Barratt was £40 million, which begs the question, how did Boleyn Phoenix make a profit of nearly £20 million?

There’s no evidence of any wrongdoing, it’s just a bit…odd.

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West Ham’s accounts provide as many questions as answers. There’s a lot of bad blood at present between the club owners and some elements of the fan base. More transparency in relation to the club and its transactions would possibly help resolve some of the differences.

The hope that the move to the London Stadium doesn’t seem to have pushed the club onto the next level of success in the Premier League, and this is why some fans are wondering was it worth losing their spiritual and cultural home that was the Boleyn Ground.

As Alice said to the rabbit ‘Curiouser and curiouser’.

Data Set

West Ham and the London Stadium: Flares ‘n’ Slippers


We don’t particularly like politicians here at Price of Football. Not because we have any left/right leanings, our viewpoint is mid-Atlantic on most issues, but because they repeatedly fail the competence threshold, regardless of their affiliations.

Present London mayor Sadiq Khan (Labour) commissioned an investigation into the deal which has resulted in West Ham residing in the former 2012 Olympic (now London) stadium. The deal to give the Hammers the stadium was granted by the former administration, run by foot in mouth former mayor Boris Johnson (Conservative).

Herein lies the first point, had the previous mayor been Labour, what would be the chances of this investigation and report taking place?

The scenario

Moore Stephens forensic accounting department were tasked with investigating why the transformation costs of the stadium for football purposes rose from an initially estimated £115m in 2014, then £192m and then a final total of £323 million by the time West Ham took occupancy in the 2016/17 season.

Sadiq Khan clearly had a WTF moment when he found out that the local taxpayer would be paying for a substantial element of this increase in cost.

The report, a never-mind-the-quality-feel-the-width 169 pages, takes ages to read, but we nobly gave up a few evenings of gin, hookers and cocaine to wade through the contents.


The history

Before the Olympics took place, the Olympic Park Legacy Company was set up to decide what to do once the games finished.

OPLC looked at a series of options, which were narrowed down to five. The initial desire was to have a 25,000 seater athletics stadium (option 4 below), but a wide range of other issues were considered too.

These were assessed initially from a financial perspective, with the following estimated costs.

The options were also considered from a non-financial perspective.


The final decision was to go ahead with option 10a, but when the decision was made the costs (and more importantly, who would bear them), did not seem to be a major consideration.

This meant that West Ham ended up as tenants in the London Stadium (attempts to negotiate naming rights for the stadium have proven to date to be as successful as Marco Boogers career at the Hammers).

The second ranked alternative was the purpose built football stadium, likely to have been occupied by Spurs.

Either way, a significant amount of work would have been needed to convert an athletics stadium into one appropriate for football or multi-sport, and also back again if required.

The findings

There are two main areas when the costs appear to have gone haywire.

1: Construction costs

Political point scoring overrode commercial sense, and the desire to have a legacy (the stadium was chronically underused after the Olympics finished in 2012 until West Ham took occupancy) clouded the judgement of those negotiating from the side of the stadium owners.

West Ham didn’t do anything wrong, they were effectively lottery winners, who paid £15 million for a stadium that cost £323 million to make into something appropriate to play football, plus £2.5 million annually in rent*.

(*they also have to pay for a machine that blows bubbles when the team comes out at the start of the match and half time. It might also be used when they score a goal, but when I went to watch a match there, this facility was not required).

The increase in costs was due to many factors. Seemingly at every planning meeting a new problem would arise, or extra costs would have to be incurred to meet a deadline (such as hosting Rugby World Cup and Diamond League athletics meetings).

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So who paid for these expenses? When West Ham signed up to be tenants, they were effectively capped at contributing £15 million. The rest mainly came from the public sector, the benefits to which are questionable.

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2: Running costs

The set up for running the stadium is complicated. A company, E 20 Stadium LLP (E20), was set up in 2012 by two partners. 65% by LLDC (London Legacy Development Corporation) and 35% by NLI (Newham Legacy Investment) to operate the stadium on a day to day basis. E20 have made losses of nearly £255 million in the first few years of trading, and generated income of…err…£4.9 million.

The main reason for the losses is what is called impairment. Normally under accounting rules, if you buy an asset that will last you a long time you spread the cost over the period you use the asset. This is called depreciation, so build a property for £100 million, you think you will use it for 20 years and then scrap it, so depreciation is £100m/20 years = £5 million annual cost in the accounts.

Imagine, however, that you buy something and find out that you have vastly overpaid for it (this is also known as the Andy Carroll theorem). Under the accounting rules you have to include the asset in the accounts at its expected market price.

Any fall in value is called an impairment.

This is what has happened at the London Stadium. In the first three years of running the London Stadium, E20 has spunked spent £272 million on transforming the stadium into a multi sport arena, and then written off over £246 million of that cost as what has been created is vastly overvalued in market terms. The stadium is therefore valued at £26 million at at June 2016, when West Ham were due to move in.

Front loading of costs is not unusual in the murky world of public-private finance, and can be called prudent (albeit by the Hogwarts school of creative accounting). If you front load your costs and losses, then in later years you can make the company look more profitable.

However…whoever originally drew up the figures has made major miscalculations, and anything that could go wrong has gone wrong (including holes in the new roof apparently).

It is now estimated that the cost of removing seats for athletics meetings, and then bringing them back for when the football season starts will cost £7-8 million a year, and remember, West Ham are paying rent of £2.5 million a year.

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E20 appear to be responsible for all day to day costs of the stadium, including things such as the flags for when West Ham play home matches. Moore Stephens conducted a forecast using best case scenarios, but still envisages annual losses being made by the London Stadium, and borne by the taxpayer.

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We now have a blame game between the have bequeathed the current situation. Those who five years ago were desperate to be associated with the Olympics, and have a selfie with Usain Bolt seem to have gone unusually quiet. Whilst many people co-operated with Moore Stephens, others were less communicative, or circumspect in their responses.

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Those who are criticising West Ham are doing it because they don’t like the club and/or the club owners. Being effectively the only willing tenant for a multi-sport stadium meant that West Ham were in a very strong negotiating position when it came to determining their contribution to the transformation cost, and the annual rent. If you have a strong hand, then surely the logical thing (lets not pretend that ethics or morality are an issue here, they’re not) is to play it, even at huge cost to the public purse.

In that respect what we have with the London Stadium is merely a very high profile and visible varation of PFI deals signed up and down the country over the last 10-15 years by grinning politicians and their management consultant advisors.