Hammers drop down the Deloitte Money League

Part two of football finance expert Swiss Ramble financial analysis of West Ham financial accounts

West Ham’s financial results for 2019/20 show losses before tax widened from £28m to £65m, as revenue fell £51m (27%) from £191m to £140m, severely impacted by COVID. Gross debt grew from £78m to £120m

West Ham operating loss (excluding player sales and interest) more than doubled from £37m to £85m, though other clubs had even higher losses:  Everton £175m, Chelsea £112m, Aston ViIla £99m and Southampton £87m. The only Premier League club to make an operating profit in 2019/20 is Newcastle with just £3m.

West Ham accounts said, “the club has seen strong turnover growth over the last five years”, but this is only £19m (16%), much lower than the big six. In fairness, this year will look better, due to deferred TV revenue (plus more money for better league position), offset by loss of matchday revenue”.

West Ham’s £140m revenue is down to the 12th highest in the Premier League, though this is partly because the Hammers accounts close relatively early on 31st May, so more revenue has been deferred to the 2020/21 accounts than others like Crystal Palace whose accounts close on 30th June or 31st July

All Premier League clubs’ revenue are down in 2019/20, due to the impact of the pandemic, though West Ham’s 27% reduction is the highest in the Premier League (larger clubs are more in absolute terms). Everton’s small 1% decrease is due to the one-off £30m for stadium naming rights option.

As a result of the steep revenue fall, West Ham dropped from 18th to 26th in the Deloitte Money League, which ranks clubs globally by revenue, their lowest ranking since 2013. That said, they are still ahead of recent Champions League semi-finalists Ajax.

West Ham’s broadcasting income fell £44m (35%) from £127m to £83m, due to revenue from nine games slipping to 2020/21 accounts £26m, rebate to broadcasters -£6m and lower merit payments after dropping from 10th to 16th -£12m. Others will see similar falls when they publish 2019/20 accounts

However, the Hammers broadcasting income could be around £40m higher in 2020/21. It will include £26m revenue deferred from the 2019/2020 season extended beyond 31st May accounting close, plus higher merit payment (worth £1.9m a place, so extra £17m if finish 7th) less the £2m rebate.

West Ham would also benefit financially if they managed to qualify for Europe this season. As an example of what they could earn, English Champions League representatives received an average of £72m in 2019/20. It’s far less lucrative in the Europa League, but clubs still averaged £20m.

West Ham’s matchday income fell £4m (17%) from £27m to £23m, as they staged two fewer home games and then played then five games behind closed doors due to COVID. Income is 8th highest in the Premier League, less than a quarter of the £95m Spurs earned after their move to the new stadium.