West Ham to post record profits

Sean Whetstone

6 years ago

Categories: News, Whispers

West Ham will announce a record net profit as high as £25m in nine days time via the financial accounts are published at Companies House but remains cash poor.

The Hammers earned TV money worth nearly £122m last season, up £35m from the last accounts thanks to the new Sky/BT TV deal.

That applied to all PL clubs last year. London Stadium ticket sales will add another promised £10m to the record turnover meaning turnover could reach around £187m for the 2016/2017 season. That’s an increase of £45m from the £142m recorded by West Ham for the 2015/2016 season.

Total wages including players are likely to have reached 50% of turnover at around £93.5m and based on last year’s figures we can also expect another £30m in external administrative expenses/outgoings which include the £2.5m for rental of the London Stadium plus another £9.5m in agent fees.

Despite all of that the club remains relatively cash poor. Last year they were forced to again borrow money from Media Rights and Funding mortgaged against their training ground, shop leases and London Stadium lease. This annual loan is akin to an overdraft to inject cash flow into the club.

The Irons have made a number of cash payments up front last year but in the financial accounts, these are depreciated these over a number of years.

The £15m handed to the London Stadium owners is spread over 99 years in the accounts (£15,000 per year). The £11m for the shop and ‘WestHamification’ of the London Stadium is spread over 10 years (£1.1m per year) while players are often paid for 50% up front but spread over the life of their contract as an asset in the financial accounts which can be up to five years.

Doubtless the usual cries of “foul” and questions asked as to “where has the money gone?” will arise when the accounts are published.

However, although the board will inevitably receive criticism as is par for the course CandH understands they took a reduced interest rate of four per cent on their outstanding shareholder loans in the last financial year.