Recent reports have challenged West Ham losses of around £100m last season claiming the figures don’t add up but it is easy explain.
The Former Man City financial adviser Stefan Borson claimed “Their player amortisation is about £90m, so that would therefore infer that they’re going to have an EBITDA loss of about £10m. It seems unlikely to me, to be honest.”
“We’ll have to see what those numbers look like, but it’s very hard to see that they’ve lost significantly on match receipts,” said Borson.
“The broadcast number will be presumably sort of £150m, so they’ve probably got match receipts of £50m, broadcast of £150m, that’s £200m. Commercial is probably about £50m, so it’s £250m.
It’s not obvious to me how they’ve managed to lose £100m, so I’d just be a bit sceptical about that report.”
It may not be obvious to Stefan but revenue has drastically reduced due to a lack of European football and poor league finishing in 14th place last sesson.
The TV broadcast income was around £131m, around £19m below his inflated estimate.
Match receipts were previously £44.6m , Commercial/Sponsorship £41.9m and £16.1m in Retail two season ago but these are all set to drop without Europe.
Stefans generous estimates of £50m for match day and £50m are way off the mark and I estimate the three revenue streams dropped to £90m combined last season.
This would make turnover around the £220m mark down £50m on the previous season in Europe.
Add to this cost of sales/expenses of around £230m similar to the previous season we have a £10m operating loss before player trading.
Add to that figure player amortisation of around £90m (a figure agreed by Stefan) then you reach around a £100m loss
we probably only have a few days to find out who is right and whose wrong when the figures are published
This doesn’t include loans borrowed against future TV earnings. Though again, that’s not something only West Ham do.
It also doesn’t include outstanding transfer fees owed to us, e.g. the Kudus fee will have several instalments still due.