By Tony Attwood
What with Tottenham finishing just off the relegation places for the second season running, we didn’t really focus much on West Ham at the end of last season, but really that was rather remiss of me when we consider just how awful West Ham’s financial situation has become.
As we all know, West Ham were offered their stadium by Boris Johnson – and WHU certainly did not have to buy the place. But to be fair, they did make a payment of £15mfor the ground, and also then agreed to pay an annual rent for the next 99 years. When they are in the Premier League it is £4.6m a year (or the salary of a top striker), in the Championship it is £2.5m a year.
So we tax payers do get some money back, and WHU know what their rent is going to be. Although I am not sure there is any agreement in terms of what happens if WHU sink to the Championship or lower in a year or two, and can’t afford to pay.
The BBC did an interesting piece on how the finances work, which it called “The Bargain of the Century” which is worth a look. Certainly the question is often asked as to why the government would do such a deal, but the fact is that the Conservative party made a lot of fuss about getting the Olympics but then needed a suitable stadium to host some events – and quite simply this was the only option.
WHU knew they would not be able to afford the stadium’s costs year on year so they made a low offer, knowing that there was no one else who was going to put in an bid. So the government of Boris accepted the deal, and if you pay tax each year, you are paying something toward West Ham.
What you might also like to know is that West Ham’s own accountants warned WHU that they would be in a cash crisis in the 2026/7 season even if they managed to stay in the Premier League, as they have accumulated a debt of somewhere between £300m and £400m (opinions vary). As you may have noted, some directors resigned recently.
An excellent season at the top of the league in the 2026/7 campaign would help by filling the stadium for each game – and they could do with a good run in the cup as well, but otherwise financial trouble looms and a couple of poor years could lead to liquidation. That would probably take them down to the third tier and reduce their income considerably and it could be a long haul back unless they could find a buyer for the club. A buyer for the stadium looks out of the question.
The trouble is that the expectations around the club are high – they have a superb stadium, and they have been in the top division in every season since 2005/6 except one. But the debts keep piling up.
The problem is that the Conference League and the Intertoto Cup are the only things they have won since they won Division 2 in 1981, and when a prospective buyer, impressed by the ground, realises that, then the shine goes off the acquisition. They start to look like a second-tier club with a rather too expensive stadium.
And then there is also the worrying fact of Tottenham’s experience. They have found rising up the Premier League much harder than they anticipated, despite having also having a grand and large stadium, as their two 17th-place finishes have shown.
As we know perfectly well, it has taken Arsenal a devil of a long time to get back to the top of the Premier League since the unbeaten season ending in 2004, and that lesson is something that is slowly being understood by other teams. To be star performers in the Premier League gets ever harder, and although it is quite true that Tottenham won the Europa League, their league position these last two years, and their huge losses recently, show the difficulties they have.
But perhaps the greatest problem of all is an all-pervading belief within several of the London clubs that really they are not in financial difficulty, and that any moment now they will rise up, spend another fortune, and find themselves top of the league.
I’ve tried to explain why such a financial outlook is unreal, but it seems many supporters of these clubs and their fans don’t want to believe it. That, of course, is up to them, but if you would like a perspective on this financial issue, you might care to look at Is Tottenham’s debt a problem getting worse and worse? and the denial comments that follow. Maybe there are no debts; maybe everyone else is paying for these clubs’ losses. But if such projects were, as we are suggesting, huge gambles that could potentially go terribly wrong, then there could be trouble ahead.
