Without having access to the immediate state of finances, as the recent report and accounts is backward looking, the one outlier is that West Ham should be in a stronger financial position relative to their peers, given they rent a stadium which is effectively funded by tax payers. The club pay £4m a year to rent the stadium, according to a report published last year by London Stadium 185, whereas annual operational costs for the facility total around £16m with an additional £4.5m allocated to maintenance, security, cleaning and upkeep. Indeed despite other events hosted at the stadium, it has never approached profitability.
To put this into perspective, Tottenham Hotspur’s new stadium built between 2015-2019 cost around £1bn, which was funded by bank loans, private funding and £32m of government grants. As a consequence our North London neighbours outside of the Harry Kane sale, were publicly looking for more outside investors according to a report from the Guardian in April 2024.
There were several red flags in the recently published West Ham accounts that Sean Whetstone uncovered and wrote about in a previous article. The most concerning one was that West Ham sold future transfer payments due from other clubs to have more cash up front last summer. The club sold £69m of transfer rights for £64m, paying £5.1m in interest as part of the deal. This re-affirms that cash flow is a problem.
The noise from the boardroom suggests West Ham are primarily looking at loan options in January. In simple terms this means that players we are being linked to are deemed surplus to requirements at their parent clubs, and arguably aren’t deemed good enough. A loan with an obligation does though widen the pool of talent, as the selling club is aligned to the business model of buy now, pay later.
The ‘Bosman’ market where players run down their contracts broadens the scope for more clubs to enter the bidding, as without a transfer fee, clubs can be more competitive on salaries. The lure of Champions League football and trophies greatly restricts West Ham’s pulling power.
A case in point is Jonathan David, who will be a free agent in summer. The Lille striker is available now for £20m or no transfer fee by the summer. The French club are keen to negotiate a transfer, yet the player has all the cards – and it would be more sensible to revaluate his options post June 30th. On a weekly wage of €37,500 the attraction of a signing on fee and bigger wages, along with his pick of clubs would make more financial sense.
That said, West Ham are not an anomaly and it will be interesting post Feb 3rd to assess the overall window. Most Premier League clubs for 2024-2025 have actually spent more on incoming transfers than income received from players sales.
