West Ham will face a number of financial hurdles to fund these summer signings of Pablo Fornals and Sebastien Haller.
The Hammers will experience another year of financial losses up to £28m this season on top of a similar deficit last season.
While they have sold £32m of outbound sales they must still find £32.5m to fund the £64.5m of new signings this summer on top of last summer’s spend of £89m which has an accumulative effect as most deals are paid in instalments.
To balance the books David Sullivan and David Gold will defer £45m of shareholder loans which were due for repayment in January 2020 with interest accrued and rolled forward. They also hope to sell fringe players in the form Jordan Hugill and Pedro Obiang.
A senior insider speaking to Claret and Hugh this evening explained all options are open and a rights issue (sha could even be considered which is where additional shares are offered to existing shareholders.
As Pelegrini was supposedly given a budget of £30/40m plus sales, there is no deficit.
As to ‘finding’ the £30/40m, an obvious place to look would be to start with the £120m Sky TV money, not to mention the never-ending list of sponsorship deals.
If we’re going to consider last season’s spend, we should also take into account the previous deason to that when we made a £10m PROFIT on transfers.
The Sky money funds the wages mate. What never ending list of sponsorship deals?
So your telling me with the money from season tickets and sky money and bearing in mind that we’ve significantly lightened the wages (Carroll, 100k … Arnie 120k …. Perez 70k supposedly …. Adrian 50k …. Nasri 70k … edmilson Fernández 40k ……. Sam Byram 35k …. that’s 485k total off the wage bill then if reports are true it’s roughly 70 k each were still 345k up on wages and there’s still dead wood to shift. Add that to those figures you were ill using to earlier and I’ll think you’ll find gold and Sullivan are having a good time out of us. A few good signings and people forget what they are …. they’re tight. Couldn’t just pay the fee for Gómez … played hardball and lost out. Look what they done to sakho, agreed a deal with Metz then at the end only wanted to pay pennies because they knew they turned his head
I’m telling you the Sky money finds the wages. They are paying 45m for Haller over 18 months (Gomez didn’t want to come) when all clubs normally pay over three years. Those you have mentioned which total 485 correct…ish. In have come Fornals, Haller, Martin, Roberto which has saved them around 180k on wages. That is available for others either now or in Jan and would account for 2 players probably. Rice went from 2k a week to 40k. Carroll was 87k, Edmison Fernandez 25 and Adrian 35 so revise downwards by 43k a week
I’m just going by the media quotation. Adrian was number 1 for a few seasons I’m not having that he was happy on 35k so I doubt that. The rest is true but it doesn’t defeat the point that they do penny pinch and string out transfers to absolutely get the best deal. It’s a tactic that will loose you many a player in the modern game. As for Gomez, the fact he didn’t wanna come is, Kind of irrelevant… if we had triggered the release clause with cash upfront strait away we would have been able to put a very lucrative offer to the boy early on and maybe turn his head before he had time to shop around. As it was we kept scrimping with derisory bid after derisory bid and allowing him to take weeks and have his head swayed.
Can you explain why Sullivan has just lent his mate at Bolton £25m, and yet we must still find £32.5m to fund the £64.5m of new signings this summer?
I think part of the problem is the real details of how the £££ works is not explained.
The WHU 2017/8 accounts note that the outstnding net balance due on players including those bought post accounts in the Summer Window of 2018 totally net £60m net. This would not include potential add ons or agent fees.
Now i would have expected us to have settled as much as half that in the summer of 2018 so the real net debt at the end of the season could be around £30-35m. Again, this could be boosted by add on’s although i suspect that is not the case for the recent purchases.
So what has happened. We have got the Arnie money up front so that clears nearly all the £27m we need to pay over the next 12 months. Only a net sum of £4.5m would need to be found.
From other sales and buys, assuming we pay and receive one third, this years payment would only total £9.5m. So for this sesasons deals so far, we have only spent £14m. Of course we would have had to settle perhaps £20m on the old transfers. So that’s only £34m. With a turnover of over £170m and even taking into account the wage bill, we should easily be able to spend £40m and this year income should be up with new sponsor deals and the new TV deal which would see an extra £15m if we achieve 10th again.
Now after these deals, it will mean we only own approx £10m on transfers prior to this window. And because we would have settled 66% of the Haller fee, we would only own £13.5m for him. Further, the other players would require payments of £19m. So the new revised player debt would be around £42.5m.
So thtat’s a big reduction on last year with also a major reduction in wages. The wge cap has been removed as well so goodness know why this is been mentioned still. But the £35m max. loss for one year remains in place although you can exceed if the owners converted debt to shares. There is noting stopping them doing this if we failed to get in the top 10 as they can easily recoup from the interest they have taken and will take going into the future.
I’m no accounting expert and of course there are more costs than merely wages and transfers, but looking at the picture from the outside, it appears there is still scope to spend more. Sales should boost that figure.
Of course i should end with thanks for the great job by all bringing Haller to the club. Not only does it appear the player debt will be down but the asset value is up. Not an easy thing and a great turnaround in a few years seeing the owners hands were tied for a good few years by the actions of the old owners.
I’m not sure why so many people are under the impression that every incoming penny is profit, and therefore is for the transfer budget. We all understand our own wages are not 100% disposable income but struggle to comprehend this when it comes to our football club.
I’m not sure why you are under the impression that ANYONE would think that. Everyone realises that wages, overheads and interest payments have to be made. But sweeping statements like Sky money pays the wages do not help. PART of the Sky money pays the wages if you like, and as has been reported on this site, the wages have been significantly reduced in this window even if a couple more players come in.
Don’t get me wrong, I think the David’s have done a great job in investing in the squad since the wake up call they received at the Burnley game. It’s just that they like to play smoke and mirrors with finacial info to the fans, or spin in political terms.
Last season our wage bill surpassed £120m and our Sky money was £119m so almost like for like
As my article showed yesterday we have reduced that by £15m as it stands but likely to spend more of that before the window ends.
That sounds top heavy Sean. Obviously wages would include manager, coaches, office & shop staff etc, but in crude terms £120m is equivalent to 24 players earning £100k a week. Hard to imagine £120m being correct. Wages/payments to Chairmen etc?
Sky money pays the wages Fact. Where else do you think it comes from mate? Let us know.
First all praise to DS the closing of the deals for players and Pellegrini plus team is first class.
Now to your article and I am thinking that a smoke screen to the reality is being created but bear with me.
First FFP has been relaxed for clubs like ours so we have a little wriggle room.
Pellegrini was given 30m as the transfer budget plus sales. That now stands at 62m including 22m upfront for Muggo Danijel Arnautovick. That equals our transfer Spend of 62 mill for Haller and Fornals.
Wages as quoted by you were 450per week or 23m. Take away the 150 per week or 7mill in wages for 2 X Gk, Haller and Fornals and we should have 14mill in wages left. Then there is the 45mill deferred payment. It would appear that there should be about 50million give or take a some agent fees for another striker and their wages.
Hugh and Sean there are still several weeks of transfer market left and you do a good job please don’t upset the fans with “their broke, and the club is restricted by FFP etc.” Silence is golden and we are not fools. These articles will fire up people against the good work done. They aren’t really needed. Praise the good and just say that the club continue to work on the needs of the team till the end of the transfer market and at this time tells us the position. Please
Who cares we bought Fornals and Haller COYI!!!