The subject of West Ham’s finances and question debt has been raised again after the chairman’s son Jack Sullivan claimed the club was still £100m in debt. Speaking on twitter Jack posted “The club is still 100m in debt!!! Both Daivd’s haven’t taken a penny out of the club and have but in 30 million each.”
David Gold then followed up a question about the debt today responding to fan who accused him of lying “We never said we would be free of debt, we said we would be free of BANK debt which we now are. dg”
West Ham earned £85.7m in Premier League TV money last season and is thought to have pocketed another £38m from the sale of the Boleyn Ground to property developers this summer.
West Ham were required to pay out £15m to stadium owners E20 Stadium LLP as part of their agreement before they moved to the former Olympic Stadium and have forked out another £8m in WestHamification costs and the club’s new store fit-out of which a £3m contribution was made to the change some of the seats to Claret and Blue.
West Hamare understood to have used the £15m surplus of the Boleyn Ground sale to pay off some their bank debts which totalled in £32.3m when the 2015 financial accounts were published. As the bank loans were mortgaged against the Boleyn Ground the club needed to find an additional £17m to pay off all the bank loans before they handed over the keys to their former stadium in July.
Both Chairman have loaned the club £49.2m in share holder loans which have accrued approximately £12.3m in interest calculated at rates between 6-7% totalling £61.5m owed to the primary shareholders if they ever decided to cash in.
Claret and Hugh understand West Ham have third party debts of an additional £40m which lower than previous years but much of this debt to owed to other clubs in transfer fees paid over several years. For example we are still paying installments for Andy Carroll. It quite normal for a club of our size to owe this amount of third party debt and good business to spread transfer fees over a number of years if the selling club will agree to it.
If you add the shareholder loans with interest together with the third party debt you do reach £101.5m of debts but it is not the same as the £110m in debts Sullivan and Gold inherited when they took over in 2010 with £50m owed to the banks, £40m owed to other clubs and £20m owed to Sheffield United over the Carlos Tevez affair.
In reality West Ham could only really clear £110m in debts if it made £110m in profits over the past six years.
West Ham lost a combined of £48m in 2011, 2012 and 2013 and a made combined profit approaching £1om in 2014 and 2015 which leaves a net loss £38m over that period. Turnover has increased from £71m in 2010 to £120m in 2015 which has helped counteract those losses but costs such as players wages and other outgoings have also increased during that time period.
So basically we have transferred our debt from the banks to the club’s two principle shareholders while our third party debt remains broadly inline of what it was and should be for a club our size.
DG seems to have forgotten what he said in September 2014…
https://twitter.com/davidgold/status/508024273341280256
I am sure he meant external debt such as money owed to banks
In the coming week as the transfer window gets near to shutting we will also start hearing the term Financial Fair Play a lot as well…
Quite simple, club is valued at 450m, do a 20% share offer to the fans or issue a bond that guarantees 6-8% return and they will raise £100m in a flash.
Tell me where you can get a guaranteed interest return in this financial market and I would put my debt or savings in the club and get that interest return.
I know you have to lend at a commercial rate so its not a tax dodge, but they get £12m a year in interest. That’s up their with the Glaziers !
They get around £3m per year in accrued interest which has built up since 2011
I was going to say something similar Dave but you have put it much better than I could. While they are earning 7% in interest their is no incentive to reduce the debt but it is slightly disingenuous of them to say they have taken nothing out of the club in their statements previously, although in the most literal sense this may be true when they collect on their debt they will realise a substantial amount.
Worries me that debt can be described as ‘quite normal’. If that is our level of debt should the club be contributing to any political party?
When I say normal you have to remember the size of transfer fees. Even Andy Carroll is spread over 3 years. So £17m becomes £5.6m per year.
So from last season
Payet £12.75m So maybe up £8.4m still owed
Ogbonna £9.35m So maybe £6.1 still owed
Antonio £8.08m so maybe £5.33m still owed
Obiang £5.1m so maybe £3.36m still owed
Byram £4.08m so maybe £2,69m still owed
If DS managed to do all these deal as 36 month deals it could mean we still owe £25.85m from last summer
Two summers ago we spent £30m on Valencia, Kouyate, Sakho and Cresswell. Again it is possible we still owe £10m from those £30m of deals two years.
It adds up very quickly in this crazy transfer market. No club pays everything up front unless they forced by the selling club.
How do you think chelski & citey get their money? The only difference is the loans are interest free. If the loans get called in both club are f**ked
Yeah like 12 grand or whatever it was going to make any difference.One days wage for Carroll
A good example of this is the topical Wilfred Bony purchased by Man City for £25m from Swansea. Despite being regarded as the richest club in England they paid for Bony over 3 years.
Football leaks published his contract in full showing installment details
City paid £9m up front, plus the £5m in VAT due on the total transfer. They paid Swansea a further £8m in January 2016 and are due to pay the Welsh side a final £8m in January 2017.
https://footballleaks2015.wordpress.com/2016/03/11/swansea-manchester-city-wilfried-bony/
Does an icelandic bank still own a small % of the club?
Yes and that is part of the problem. The Icelandics own 10% and the Harris Family together with Terry Brown own another 4%
So 14% of West Ham is not owned by Sullivan or Gold yet they have injected cash to benefit the other share holders.
If we ain’t paid all in for Carroll can’t we ask for a discount or rebate for buying faulty goods 😉
We signed Carroll permanently in 2013. Liverpool were desperate to sell so agreed to spread payments over 3 years. I think the last payment was due this summer.
I think most of us realise there is still debt in whatever form it is but maybe if that’s the case then Sully shouldn’t go shouting his mouth off about Marquee signings & 30 million plus bids that then turn into frig all other than Ayew from Swansea.Which though I dont mind as a player is hardly going to shake the football world.I suppose the day after the window we will get the ‘We moved heaven & earth to bring a marquee player in’ PR train running at full speed.Oh yeah & I expect there will be a FFP article coming out as well.
Well the FFP excuse will be harder to argue this season, the reason is the new stadium will bring new sponsorship deals and extra revenue which we didn’t have at the Boleyn Ground which can be used to boost our wage bill over £60m
Two men come to a broke football club, spend millions of their own money to buy the club and then both invest another £50m each & people still moan about them.. They sell the ground and use all the money on paying off mortgage’s against the ground. So they sold the biggest asset and got sweet fa themselves. What utter b*****ds they are.
Well put EssexClarets