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November 2020
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How can West Ham possibly be in financial difficulties after being given a stadium?

By Tony Attwood

When you think about it, West Ham have it all.  So much in fact that it probably makes every other club green with envy and puce with anger and probably maroon with something else.

In 2017/18 (the last season for which figures are available) WHU had the eighth highest turnover in the league and the 11th highest wages bill, which is the right way round for success.  Earn more, pay out less.  In the year up to May 2017 they made £43m profit.  Rather nice if you can get it.

They had a net debt of £35m.  Big by your or my standards but not impossible to manage in football.  Especially as their turnover was £4.82 billion.  (Shall I spell that out?  £4,820,000,000.)

And here’s the thing.  Their stadium, funded by British taxpayers like me, and possibly you, costs them £2.5m a year.   Arsenal’s stadium cost £390m plus interest on the bank loans.  The interest alone cost £20m a year, and that is before the repayments.

So WHU had no capital outlay, got a brand new stadium, and paid £17.5m a year LESS than Arsenal’s interest.  About £35m a year less than Arsenal’s interest and repayment.

And let’s consider that stadium.   Figures here are from Soccerstats.com.   Yes West Ham get fractionally fewer people through the gate than Arsenal because it is a slightly smaller stadium, but this season’s figure show the top four clubs for crowds are

Club Av home crowd Total crowd Capacity % tickets sold
Manchester United 72,726 1,090891 74,879 97.1%
Arsenal 60,274 843,843 60,383 99.8%
West Ham 59,924 838,943 60,000 99.9%
Tottenham 59.384 831.372 62,214 95.5%

And the usual note of course about empty seats at Arsenal stadium.  Arsenal have some season ticket holders who don’t come to every match, often because of transport or personal issues as in fact do virtually all clubs.  But they have paid for the ticket.

Anyway, now WHU are in financial trouble.  With Tottenham we can understand it; they have built the stadium, paid Mr Leavy eye watering sums of money, and now haven’t got enough to pay their staff.  But WHU: how did that happen?

Not from stadium debt as we can see.  Along with Manchester United West Ham haven’t had a stadium debt for years.  Yet their players are not being paid the full amount at the moment in order to help the non-playing staff.   David Moyes, accepted 30% deferrals and the owners, David Gold and David Sullivan, deferring interest payments on shareholder loans.

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They are not giving those interest payments up, mark.  They are just holding off.  For a while.

Of course deferrals of payment to players don’t mean the club has no money.  As we all know, Manchester City are backed by an entire oil rich state, and yet they are said to be in talks with their players over deferrals.

There have been wonderful words said at WHU such as Ms Brady saying, “I would like to say a big thank you to David Moyes and his backroom team, our captain Mark Noble and our fantastic squad of players for the commitment and determination they have shown to offer their help and support. I would also like to thank the shareholders whose support through this injection of equity once again demonstrates their commitment to the future of the Club.”

But WHU are running out of money, when the man now our Prime Minister, as mayor of London, agreed to give the club the stadium we own, for next to nothing!  As Sport England said at the time, “Under this deal we have to pay West Ham.”

The answer to why they are in trouble is generally the same for all clubs in trouble.  Spending too much on players and relying on future income as if it were guaranteed.

As the seventh annual Football Distress Report by insolvency specialist Begbies Traynor reported,  “We’re now seeing signs that over spending on playing staff and poor planning are on the rise again…”

West Ham really have had it all, and I mean it all.  A stadium that cost them £17.5m a year less than Arsenal’s, a crowd that keeps turning up no matter what, average attendances of 59,924 – the third highest this season in the league.

Indeed it must take a level of such super incompetence to create a financial problem in this club, even with football stopped, that raises an issue.  WHU of all clubs should be sailing through this crisis without a care in the world.  .

Of course clubs are in difficulty in the lower leagues, but the report on West Ham effectively puts them not among the big boys of the Premier League but the likes of  Bury, Oldham Athletic, Blackpool, Sheffield Wednesday, Notts County, Bristol Rovers and Bolton Wanderers.

For if you talk to anyone in those distressed clubs, or any analysers such as Dr Rob Wilson, the specialist on sport finance at Sheffield Hallam University, you will be told that, “The Premier League is the big body at the top with all the money.”

By way of explanation, Kieran Maguire, author of the Price of Football however put it another way saying that clubs have “a culmination of an overpayment of wages and poor cost control in terms of how the clubs are being run”.

Now we know, as Maguire says, “In the championship, wages are 150% of revenue,” but there is no excuse for this in the Premier League.  We know that the directors of West Ham are not in the club as patrons pouring money in, but rather as people who would like to (and indeed do) take money out.  In this regard they are just like Arsenal.

But when we, the poor, exploited tax payers, find our hard earned money ripped away from us by someone like Boris Johnson when he was mayor, and the fruits of our labours being then given to a football club like WHU, we might at least expect they could a) be grateful and b) make a decent job out of what they have been given by making loads of money which then, no matter what the circumstances, involves them c) paying tax to the government on their profits.  Even in very bad times.

In this case, none of that seems to be true.

9 comments to How can West Ham possibly be in financial difficulties after being given a stadium?

  • Kevin Stanley

    West Ham do don’t own the stadium Why do bitter twats like you not understand that.

  • John Harvey

    West Ham wasn’t given the stadium we rent it, nobody else wanted to touch it apart from Spurs who wanted to pull it down and rebuild it, and that was not going to happen as Spurs well knew they just wanted to stir it up the same as Barry Hearne. But it backfired as West Ham also threatened to pull out and that left the stadium owners in dire straights so West Ham struck a deal be it in there own interests like the vast of majority of people in business do. In the next couple of years West ham will own the stadium as the owners will find it difficult to fund, West Ham will get it for a massive knock down price also. So get over it and worry about your own club.

  • I am sorry I did not make myself clear. When I said, “agreed to give the club the stadium we own, for next to nothing” I thought it was quite clear that I was meaning by “we” that it was owned by “the people of the UK via its government.” It was given to them to use for (I think) 99 years. Now that to me is a perfectly normal use of the language. I really don’t know why a few West Ham fans have not quite got that, and indeed why some of them have felt it necessary to write abusive notes to the site (which of course in keeping with our normal policy) we don’t publish.

    But to spell it out, WHU were offered a lease at a very low knock down rate and that is what they pay and will continue to pay. So they have a big stadium that they can use, they are renting it, and they pay very little rent.

    If the best argument that WHU fans can come up with is a technicality over the language, then really I think they too are perhaps admitting the whole deal with really wonderful for them, but even with that the owners of their club, have screwed up.

  • mick shelley

    Not only were the Hammers ‘given’ a stadium, as a result the owners of the club were able to sell the old Upton Park ground for £40 million. I wonder who got the benefit of that tidy sum?

  • Alan Walsh

    You will notice that West Ham fans were protesting week in week out to remove these owners. Among other things the way the club has been run is the very reason for these protests. Your article contains factual information but you have delivered in an emotive way which quite frankly comes across as jealousy. If you stuck to the facts and kept your obvious hatred for West Ham out of the language this would be a decent article

  • David Gill

    I am not entirely sure where the £4.82 billion turnover came from. Looking at the WHU accounts over a number of years, they average around £170 million.
    Putting that to one side, the reason West Ham’s directors are having to put money into the club is pretty simple. Firstly, they like every club up and down the country would have budgeted for a full season rather than the current truncated one. Secondly, the directors are now having to put back in what they have taken out over the last four years in the form of interest payments (approx £22million) and lastly, their totally clueless activity in the transfer market since the move to the dump that is the Olympic stadium has come back to bite them on the backside.

    On the stadium itself, I don’t know of a single West Ham fan that attended the Boleyn ground who considers the move as anything other than catastrophic. I am a West Ham supporter that the board of directors don’t want to see at the toilet bowl. They want to lose the type of fan that reserves the right to criticise the club in favour of day trippers wearing half and half scarves……something that Arsenal fans of a certain vintage should sympathise with.

    I think that articles such as yours should acknowledge that the fans are separate to the club owners and are usually the ones who are being ripped off the most. I actually sympathise with arsenal fans who have lost that feeling of community and seen it replaced with City types and tourists.

  • David Gill – I take your point, there should be a separation betwen the board and the fans. I think it has been expressed in other articles on this site, but it wasn’t mentioned here.

  • Diamond Geezer

    I’m a West Ham STH who thinks that the move was necessary and has been a huge upgrade. There are many thousands of us who don’t spend all their time complaining and are reasonably happy, other than with the football. The club’s debt comes from the £100m hole the previous owners left behind (which is serviced by loans from the owners), plus the same problem as everyone else – no income ATM and players’ wages being a fixed outgoing. Plus West Ham have a lot of cheap(er) season tickets which were part of the rental deal when Newham were a joint owner of the stadium. Arsenal have some of the most expensive season ticket prices, which are still banked even though there are no games.

    We also have to fund Jack Wilshere…..😟

  • omgarsenal

    Kevin Stanley….we do don’t understand that because your syntax is faulty. Everyone is a bitter twat today but you guys still have Jack Wilshere, so that explains your bitterness.

    John Harvey…..we aren’t bashing WestHam, who only did what every other club would do in their place, but the Boris one, who gifted the stadium at taxpayers expense. Did you bother to read the article?