Football finance expert Kieran Maguire has questioned the wisdom of one of the credit facilities currently being used by West Ham.
Maguire was speaking directly to Hammers Chat and was asked about the club’s loan from Sports and Media Funding — a borrowing source that some have already labelled a “payday loan”.
West Ham appear to be borrowing against future income using two separate facilities, including a £120 million fund from Rights and Media Funding, which reportedly carries a far higher interest rate than the club’s £40 million Barclays facility.
Expert Warns Over West Ham Borrowing Strategy
Speaking to Geo on Hammers Chat, Maguire did not hold back when explaining how such lenders are viewed within financial circles.
“West Ham have borrowed from an organisation called Rights and Media Funding. I work in the city of Liverpool and I mentioned this to a friend of mine who informed me, ‘You don’t want to go down that avenue.’
“You only go to organisations like this when you can’t borrow money from the traditional banks and therefore you end up paying a fortune in interest.”
Maguire also highlighted that the club appears to be relying heavily on borrowing and selling future income streams.
“So West Ham, I think, do have a borrowing arrangement with their commercial bank for a relatively small amount. They’ve had to go to Rights and Media Funding.
“It looks as if they’ve also sold some players — it looks like they’ve sold some of those future instalments as well. All of which is indicative of a club which is using too much cash.”
The assessment of West Ham’s situation was fairly clear.
The club appear to be borrowing from less-than-ideal lenders to plug what looks increasingly like a serious cashflow problem.
Our assets are mortgaged to the hilt.
We’ve sold off our book of transfer fees due to us.
We owe £200m+ in transfer fees
We are paying the wages of 3x managers
We’ve used up all our bank facility
We’ve resorted to a costly secondary lender
We are expected to run out of cash by the summer.
Last year the club resorted to seeking season ticket renewals in March to raise cash. They will struggle to do this now as we don’t know which division we will be laying in.
We need to sell a player (or more) to raise cash for day to day bills and wages
We need to sell more players to be able to buy players (eg centre half)
If this isn’t the definition of a terribly, terribly run football club I don’t know what is.
Sullivan and Brady out.
Sports Media Funding Ltd were behind loans at very costly interest rates to Everton. Think they paid £30m in interest payments from reading an article by the Guardian. Everton as we know got deducted points for not meeting PSR regulations.
As SMF Ltd is based offshore making it hard to determine the origins of the beneficiaries, could it be possible that interest paid is back channeled to those who have entered in to this agreement?
Just shows how poorly the club has been run. Large unstable loans, little income, don’t own our own ground, poor buying and selling of players, need I go on. Now the only way is to have a large input of cash from the board, after all they caused the issue so should be sorting it out, but that isn’t going to happen is it. Infact they will probably do the opposite and cut and run soon.
Cheers, cheapskate charlatan Mini-Me and Baroness “Business Brains” Botox. Great work, as ever. 👏
“Game-changing” high-interest loans. “Next level” stuff of cluelessness, desperation, and idiocy. 👏
I wonder if the team here will start banning people from being abusive to people they don’t know (B & S) like they seem to do if you so much as comment on the state of Gonzo’s barnet or disagree with another subscriber in “robust” terms. Whether you hate Sully & the Baroness, continuing to come out with even more nasty descriptions of them only reflects on the person uttering them.
The team won’t do anything to the people who follow their agenda criticising Sullivan and Brady no matter how toxic it gets. But if you comment asking why gonzo’s articles seem so heavily biased and contain so little facts, they wont put your comment up for others to see. The constant negativity here is why so many are leaving
Here’s a thought: Instead of claiming ‘Gonzos articles are biased’ – simply because you don’t agree with them, why don’t you write with your own opinion. There’s no bias. just keep it respectful and it might even get featured 🙂 Very easy just to criticise endlessly, isn’t it.
If this is true, either our CEO is a moron (he’s not), or something else has to be going on.
As fans we should be genuinely worried over these reports.
David Sullivan, Daniel Kerensky, Tripp Smith, all billionaires.
Why is the club resorting to “pay day loans”?
Something is very off.
I’m starting to believe the team will avoid relegation, but what next?
Nuno deserves backing, and the club should start building.
With 3 shareholders all billionaires, a fire sale of players will be the ultimate betrayal of the fan base.
Answers are owed.
The first two shareholders are “billionaires” on paper only with most of their money tied up in property and other business holdings. However, neither are poor that’s for certain.