West Ham Co-Chairman David Gold has explained the situation around the share holder loans David Sullivan and himself have loaned the club and justified the interest they receive on them saying the football club is better off while they are worst off from the arrangement.
Speaking to ClaretandHugh Associate Editor Sean Whetstone as part of an exclusive interview for Moore Than Just A Podcast Gold said: “When we came into the club, the club had some very caustic debts where they were paying interest at 10% and not only were they paying a high rate of interest but they were caustic in the sense what could happen there is if the club couldn’t meet the repayments or the interest they could foreclose and put the club in administration. If the debt is out debt, we are not going to foreclose so we are a safer lender because we are only ever going to take our repayments and don’t forget if you go back to the original (loan) these debts, the interest on these debts were at a very high rate. The reason was, people didn’t want to lend money to West Ham United football club 10 years ago so the interest rates were very high. We replaced those high-interest rates with a lower interest rate so the minute we put the money in and paid off those debts, West Ham were paying 10% now West Ham United football club, our football club is now only paying interest at 6%.”
“To loan West Ham money, it wasn’t money that was under the bed and gave to West Ham and now we are earning 6%, that’s not true. To be able to fund those loans, I had to remove investments that were returning me 10% plus so I cash in my investments that were showing me a 10% minimum and I loan that money to West Ham at 6% so I am now 4% worse off, West Ham are 4% better off because they were borrowing money at 10% and now they are borrowing at 6% so the football club is better off, it is more secure, the only losers are David Sullivan and myself because we are loaning money at a lower interest than we were.”
“These investments are basically the inherence of my daughters and I have a responsibility to ensure that I am doing sensible things. I am not doing what Mark Goldberg did, I am not doing what Simon Jordan did which to take their wealth, pump it into the football club and wake up one morning and their £36m that they sold their business for has disappeared. Now, what use is Mark Goldberg’s Crystal Palace, now what use is Simon’s Jordan now to Crystal Palace.”
