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Hammers suffer from cash shortage

Supporters expecting more big-money signings this summer will be in for a disappointment as the cash cupboard is now bare.

The Hammers have paid back their £23m short term loan to media rights and funding this month and as most transfers are spread over three years second instalments are due for Felipe Anderson,  Issa Diop, Fabianski and Yarmolenko which could cost around £27m.  Third-year instalments were also most likely due on Marko Arnautovic, Javier Hernandez, and Jordan Hugill costing the Hammers another £15m in cash.

Outbound wise Marko Arnautovic was all upfront at £22.5m but there is no guarantee that Fernandes, Perez and Byram were all upfront and we are likely to have received a third of each of those transfers netting us around £3.2m in cash terms.

The £24m purchase of Pablo Fornals is likley to have cost around £8m for the first instalment while Sebestain Haller at £40.5m was significantly more upfront with the rest paid over the next 18 months.

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What is all means is that West Ham’s cash reserves are now pretty much non existence and David Sullivan was required to personally loan West Ham cash to complete the Haller transfer this week before a new short term loan with Media Rights and Funding has been arranged.

Sale of fringe players like Pedro Obiang, Reece Oxford, Jordan Hugill and Marcus Browne will help the cash position but not enough to splash the cash again in any big way this summer.

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About Sean Whetstone

I am Season Ticket Holder in West stand lower at the London Stadium and before that, I used to stand in the Sir Trevor Brooking Lower Row R seat 159 in the Boleyn Ground and in the Eighties I stood on the terraces of the old South Bank. I am a presenter on the West Ham Podcast called MooreThanJustaPodcast.co.uk. A Blogger on WestHamTillIdie.com a member of the West Ham Supporters Advisory Board (SAB), Founder of a Youtube channel called Mr West Ham Football at http://www.youtube.com/MrWestHamFootball, I am also the associate editor here at Claret and Hugh. Life Long singer of bubbles! Come on you Irons! Follow me at @Westhamfootball on twitter

20 comments on “Hammers suffer from cash shortage

  1. Unless Diop or Rice is sold ?

  2. Why is the article only referring to players sold this year as far as cash in is concerned, but concerning itself with cash out for previous years.

    Andrew Ayew to Swansea – 22.8m (by your suggestion still EUR 7m + to arrive)
    Diafra Sakho to Rennes – EUR 10m – 3.3m to arrive
    Nordveidt to Hoffenheim – EUR 8m (2.75 m to arrive)
    Fletcher to Boro – EUR7.3m (2.25m to arrive)
    Randolph to Boro – EUR 5.6m (1.85m)
    Jose Fonte – EUR5.57 (1.85m)
    Enner Valencia EUR5.5 (1.8m)
    Sofiane Feghouli EUR4.25 (1.4m)

    Kouyate to Palace EUR10 (3.33m)

    Total: EUR25.53m ~ 23m GBP at current exchange rates.

    …plus who’s to say if all the Payet fee has been received yet (given the size and Marseille’s cash financials)

    Then there is the fact that we’ve slashed our wage bill, which when annualised reduces/makes available (as of now) circa 10m GBP to the budget.

    In addition chances are we’ll take out another Media Rights Loan (as is the case every year).

    A poorly constructed article with only half the information designed to inflame. We may well be out of cash, but if you’re going to try and explain why maybe at least include all of the relevant information.

    On top of this, such calculations are somewhat ridiculous given a transfer contains the following components so this simplistic counting is largely meaningless:

    (a) Transfer fee – the big number.
    (b) Any levy applied by the local FA – 5% for the Premier League.
    (c) Tax due on the transfer fee – typically this will be VAT (at varying rates across Europe) some or all of which should be reclaimable.
    (d) Agent fees – this may be to one or more agents (as an example, Liverpool have spent £44M plus VAT on agent fees (nearly double the next highest) last season alone).
    (e) Tax due on the agent fees – typically this is VAT at the local rate where the agent bills from – it is not reclaimable.
    (f) Intermediary fees – this may be to one or more sponging leeches (what do you mean you have a super agent?) .
    (g) Tax due on the Intermediary fees – typically this is VAT at the local rate where the Intermediary bills from – it is not reclaimable.
    (h) Signing on fee to the player (possibly including non-reclaimable VAT if the player is VAT registered).
    (i) Legal fees.
    (j) VAT on legal fees which is reclaimable.
    (k) Moving/relocation costs for the player.
    (l) VAT on moving/relocation costs which is reclaimable.
    (m) Solidarity and Training Contribututions (see below).
    (n) Paying up insurance costs to the selling club (usually waived).

    What is paid by the selling club would typically include:

    (a) If the player is under 24 and moving between different football associations, a Solidarity contribution paid to his previous clubs responsible for his training – this is 5% of the transfer fee received (apportioned 5% of the contribution for each year from the season of his 12th birthday to the season of his 15th birthday and 10% of the contribution for each season from his 16th to 23rd birthdays). This is generally (there are exceptions) recoverable from the buying club but responsibility (that is meant to be with the buying club) can be assigned to the selling club.
    (b) If the player moves to a higher category club (all clubs being categorised 1 to 4) then Training Compensation is due for the period of age 12 to 21. Compensation is due to all clubs when the player turns from amateur to professional and thereafter only when he moves from his final training club to another club. The initial training compensation is levied at the training costs associated with Category 4 clubs. The subsequent figure is agreed between the sides or tribuneral if necessary. This is generally (there are exceptions) recoverable from the buying club but responsibility (that is meant to be with the buying club) can be assigned to the selling club.
    (c) Any monies owed to the player if he did not request a transfer – again this is 5% of the transfer fee received.
    (d) Any monies owed to the player in terms of his contract (typically outstanding owed wages (not future wages) and bonuses).
    (e) Any money contractually due to a previous club as the result of a sell-on clause.}

    • This was not designed to inflame at all but despite your lengthy response those we have bought over those years are absent so an unbalanced contribution. Thanks for taking so much time however.

    • Great comment!

    • Brilliant, thoroughly informative comment Stubbo. Not sure I agree with the ‘inflame’ accusation, as I really respect Hugh and the staff, and am very grateful for all the do bringing us the insider info. All the same, great comment Stubbo.

    • The financial analysis is not very informative, I would agree that, if it is going to be done it should be more forensic. There are many other sources of income to be considered. The equation is not simply one where, if transfer receipts are equal to or greater than transfer payments then there is no money for transfers. It is one thing to say that the transfer budget has been spent, it is quite another to explain it in this way.

  3. Surely they should be looking at the number of free agents available now then, and utilising the removal of some hefty wages. City stated this week that Mangala is available on a free. He for one undoubtedly adds quality to our squad???

  4. I think the club has done plenty this window. Fornals AND Haller is fantastic.

    Rome wasn’t built in a day, but we are moving rapidly in the right direction with excellent foundations being laid for an exciting season. MP is a highly attacking coach, with a different philosophy from most managers, who build from the back and we mustn’t forget that we signed both Diop and Balbuena last year and that Rice is developing into a world class DM.

    In an ideal world we would sort out our full backs (Fredericks hasn’t fully convinced yet and the left is average with Cresswell/Masuaku). I expect Johnson to get more playing time as he looks a real prospect. It would also be good to have another quality DM as back up for Rice and at least one more target man as back up for Haller. We can’t have everything we wish for, but just look at where we are now compared to two years ago.

  5. Fernando lorrante is a free agent , would be a good back up striker

  6. If we sell obiang and dont replace him and keep carlos sanchez and he plays more then 10 games i dont think we will get near top 8… how have we gone through another window without buying a box to box midfielder

  7. I for one am happy to see less quantity and more quality in players coming in. We had an excessive squad. Time to trim off the fat. Less of the wholesale changes we saw in the past, and more focus on a couple of big signings each summer for some fine tuning. I think this will be a good season building on last-season’s mid-table finish. If we finish a couple of places higher and get some good entertainment, that will be progress enough.

  8. I know these articles are possibly intended to manage expectations but I think it just irritates fans. It’s obviously something we don’t want to hear. It’s something we probably already suspect.

    I’d sell Obiang for the 9m on the table and invest that in a good young left back. If we can find a free transfer that works or a loan (I know Pellegrini doesn’t do loans) to improve our other weak areas, that is more than good enough for me. I couldn’t be happier with the two big signings we’ve already made and I’m not so dim that I think we can go and spend huge money elsewhere.

    If we did somehow manage to dig up a little bit money to add to the Obiang pot. I’d consider trying to grab Tierney from under Arsenal’s nose.

    Surely a Sully special has far more credibility now he has Pellegrini and Husillos to give him some expect knowledge on South American players. Another Balbuena would be lovely!

    • These articles are to tell the truth Dom. You may have seen yesterday I made my own feeling clear on another striker. You are right too many don’t wanna hear what they don’t want to hear but we have no other agenda but to tell it as it is despite those who feel otherwise 🙂

      • (50k) Adrian free
        (90k) Carroll free
        (80k) Nasri free
        (30k) Fernandes 8m
        (80k) Perez 2m
        (125k) Arnautovic 22.5m
        (25k) Byram 0.75m

        (55k) Obiang 10m
        (140k) Hernandez 7m
        (35k) Hugill 3.5m
        (75k) Sanchez free
        (5k) Cullen 4m
        (40k) Masuaku 10m
        (20k) Oxford 3m

        £70.75m in transfer fees plus (£850k a week in wages = £44.2m

        • Well, assuming your figures are correct, and to be honest in trying to respond to as many as possible I can’t remember what this relates to. May I politely suggest you download the accounts from Companies House.

  9. Sorry Hugh I don’t buy this for the simple reason we were always going to buy a top forward with Arnie staying sothe money we have recovered from the Arnie sale surely is still available. Haller is not a replacement for Arnie in most West Ham fans eyes. we need at least a replacement for Arnie and a top box to box midfielder. If Sullivan can loan 25m to that clown who was trying to buy Bolton he can surely caught up another 25-30m for us to start buying two top players which we need. Lanzini and Fornals are link players, we need another player like Arnie or Anderson to take on people. If they have not planned for this we are an joke and missing out on a big opportunity. Arnie was our best player so unless we sign a class replacement we are no better off than last year.

  10. I saw prem clubs shared £2..45 BILLION payment from the Premier League amongst 20 teams so how any team can say the cupboard is bare is BS.plus knowing that payment will increase next season .saying that im happy with what we have but we need to bin sanchez for an upgrade and maybe some loans to fill gaps for the injuries we know will happen

    • It’s bare! The money is shared yes but it’s spent on wages by and large. Go to Companies House accounts if you want to see last year’s returns. Probably best to let the auditors do the sums

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