West Ham have made a statement following the release of their financial accounts at companies house today:
The summary on WHUFC.com says:
West Ham United’s accounts for the 2016/17 season have today been published.
Highlights
- Profit of £43million in the year, up from a loss of £4.9m the previous year.
- Sale of Boleyn Ground generated £8.7m profit.
- Reduction of net debt by £21.3m.
- Net cash investment in players of £33.6m.
- Investment of £8.1m in the infrastructure of stadium and training grounds.
Profit for year
- Three key factors contributed to the growth in profit;
- An increase in TV rights fees of £32.6m, which contributed over £11m after increased player costs and amortization.
- Profit on the sale of players up £24.3m to £28.4m against £4.1m the previous year.
- Profit on the sale of the Boleyn Ground of £8.7m.
It is noted that 19 out of 20 Premier League clubs made a profit in the 2016/7 season, the first of the new and drastically-improved broadcasting deal. The Club’s TV rights income rose £32.6m despite a finish of 11th as opposed to seventh in the 2015/16 season.
Sale of Boleyn Ground
The ground was sold in July 2016 for £38m, against a net resalable value in the accounts of £30m, thereby generating an £8m exceptional profit. A further £0.7m was generated from the sale of stadium assets.
The Club had already received two £5m deposits in 2014/15 and 2015/16, with the net proceeds used to pay off legacy bank loans of £14.7m and the £15m one-off usage fee for access to the London Stadium.
Net Debt
The Club net debt, including cash, fell by £21.3m during the 2015/16 season. The Club, at the end of the season, had no bank debt, replaced by short-term lending of £30m and shareholder loans of £45m.
During the campaign in question, the Club borrowed £42.5m of short-term funds and repaid them all in full. The Club also repaid £14.7m of legacy bank debt during the season.
The Club has moved away from bank lending completely and now utilises short-term lending and Shareholder loans. The vast majority of the money put in by the shareholders has stayed in the business although, as a result of this successful year, £4.2m of the oldest shareholder loans were repaid along with associated interest during the season.
In addition, the interest on the Shareholder loans was reduced to 4.0% from 6-7% from 1 April 2017.
Investment in playing squad
During the season, the Club invested cash of £60.7m in players, and received £27.1m from player disposals, to give a net outlay on players of £33.6m.
In the previous season, our net outlay on players was £32.4m, illustrating the Club’s commitment to investing consistently in the playing squad every year.
Investment in infrastructure
The Club spent £8.1m on capital expenditure during the season, predominantly relating to the London Stadium including fit-outs of the offices, shop, warehouse, Club lounges and meeting rooms as well as the branding of the stadium, but also substantial investment on new pitches and refurbishment of Rush Green, the first-team training ground.
The Club also spent £5.1m last season on building works at the London Stadium and further enhancements to Rush Green.
A further £3.5m is planned for redeveloping the Academy at Chadwell Heath this summer.
Chairman David Sullivan said: “The Club is in the healthiest financial position it has been in for years.
“In each of the last two seasons we have broken our transfer record and improvements in our overall financial position will help us to increase investment again this summer.
“I know some of our supporters will argue we have not spent enough in the transfer windows and signed the right targets – I accept that. I have explained in recent weeks we are changing the structure of our scouting and recruitment set-up and will make every effort to improve our performance in those areas in the future.”
Read more at https://www.whufc.com/news/club-accounts-published-for-2016-17
Excellent news!
Build up from there make good sporting/team decisions – Moyes Responsibility
Stay financial in the black and buy the Olympic stadium, converted to +80k football arena and become a top premier league club in the next decade. #COYI
Credit where it’s due, it’s a strong improvement for the business. Observations/questions that stand out following a quick scan for me are:
1. Why are gate receipts only up 6.3% when the capacity of the new ground is up 60% on that at Upton Park? I think this site has previously said that the club is not using the full requirement to give away 100,000 tickets per annum?
2. Given the record turnover of the Club, why are we paying down debt instead of investing in the playing staff to meet the commitment to take the club to the next level.
3. The growth in commercial revenue is creditable but pales into comparison with the top 6 clubs we used to aspire to. E.g. Arsenal’s is £117m; Chelsea’s is £133m.
4. Why the substantial cash prepayment to move to the new stadium?
5. The reduction in interest rate on the directors loans to 4% still represents a multimillion pound deferred withdrawal of money from the club and at a rate which is still higher than many commercial property loans on the market.
6. The number of non playing staff on the books has ballooned from 84 in 2011 (after KB’s post take over clear out) to over 150 today, yet we have one of the smallest squads of senior players in the premier league.
1) They increased ticket prices at the last season at the Boleyn Ground. 26,000 season ticket holders which meant 6,000 tickets on general sale at higher prices. They reduced prices at the London Stadium. Also 10,000 Under 16’s at £99 and 8,000 Band 5 at £289. There is only 2,000 tickets on general sale each game some of which go free to the community and they have frozen ticket prices. The only way to increase this is up the prices.
2) They had to clear debts secured against Boleyn ground but it should be said they were owed to shareholders at the time. Can’t answer why they haven’t spent more in players though
3) Most of the Commerical growth comes from Club London and its 3,200 members but sponsorship revenue will improve as shirt deals come up for renewal and new partnerships are formed. Yes we are way off the top six in this area.
4) The deal was to pay £15m up front to the Stadium owners to help pay for the £323m refit. They paid another £11m up front for club shop, offices etc
5) They loaned the money between 2011-2014 and set rates at between 6-7% from the 1st April 2017 it reduced to 4% so whether that is competitive on what a bank would loan to us I don’t know. At the time of the initial loans, banks waited for 10% but many wouldn’t lend to us.
6) It is a fair point that office staff have increased. some will joke they are all media staff and marketing but they have created a large social media team and increased marketing plus other areas too like customer services and SLO’s.
Would you happen to know how much of the repaid Boleyn mortgage was owed to Sully Sean?
He must’ve been gutted when he realised he couldn’t take interest off the club for it😄
Oh, wait………
I honestly think this site and the comments are written by the owners and the board.
Good news if they have paid the debt down by a quarter, should defo have spent more on players but better to keep the money if couldn’t get who the manager wanted. Hopefully we will stay up this season to enjoy the added funds next.
We see what they want us to see …if I’m honest I can’t believe anything that they say they have done or are going to do ….we have been down this road many times …and come to dead ends most of the time ..if they really think they have spent enough of players then then this club will stand still and be average always flirting with relegation… I havnt a problem with that at all as we spent many years at Upton park like that but we knew who we we’re and that was our way ….the problem started when they raised everyones expectations a few years ago …..and if I’m correct back then gold said we hope to be playing champions league football by 2019 … We all! Thought brilliant sounds great but look were we are ….expectations were raised a lot and that was the problem ..IMHO…
Isn’t it strange that the owners forgot to mention in their highlights that they took back £4.2m of loans; paid themselves £2.2m of interest they said they weren’t taking; then after these accounts took another £10m of accrued interest payments.
That’s right. £16.4m taken out of the club and they are still owed £45m capital and some accrued interest after lending the club £50m.
Good job they don’t draw wages for working 24/7….