A real financial Armageddon awaits in the Championship if — or when — West Ham are relegated at the end of this season.
When the Hammers were last relegated in 2011, their turnover dropped to £46m from £80.5m the previous year in the Premier League.
West Ham’s turnover for last season is expected to be around £220m when published and perhaps less this season due to a poor league position — potentially as low as £200m.
As a general rule of thumb, revenues often drop by 50% overall when clubs are relegated from the top flight.
Players like Bowen, Todibo, Fernandes and Summerville would likely want out; they’d be sold in the typical relegated-club fire sale.
Relegated clubs receive a parachute payment equal to 55% of the basic award in their first year in the Championship, worth around £50m, plus around £6m of Championship broadcast revenue.
Clubs often lower their season ticket prices and see reduced attendances in the second tier of English football.
Huge Revenue Drop & Mass Exodus Looming
In the last published West Ham accounts, matchday ticket revenue stood at £44m — inflated by European football. That could drop to around £22m in the Championship.
Commercial revenues could fall from £42m in 2024 to around £21m, as sponsors run for the hills or renegotiate terms.
Retail and merchandising could also be hit hard, potentially halving from £16m to £8m.
In that doomsday scenario, total revenue could collapse from around £200m this season to as low as £107m in the Championship.
West Ham would still be saddled with massive amortisation costs of around £90m due to player purchases over the past five years.
The wage bill, £161m in 2024, may fall by half due to relegation clauses — but that could spark a mass player exodus.
If we use Southampton as a benchmark, their turnover dropped from £146m to £85m after relegation — a 42% decrease.
The Saints cut operating expenses by £50m, but saw net interest payable on bank loans increase from £17m to £19m.
TV broadcast revenue dropped by 48%, ticket revenue fell by 15.5%, and commercial revenue slumped 35%.
Southampton only avoided huge losses thanks to £126m of player sales — including Ward-Prowse’s £30m move to West Ham.
For the Irons, the London Stadium rent would reduce from £4m to £2m — a drop in the ocean compared to looming financial pressures.
Interest on bank loans, which stood at £13m in 2024, would likely rise as the club scrambles to plug a major cash flow hole.
It remains unclear whether banks will continue lending to West Ham if loans are no longer secured against Premier League broadcast revenues.
At best, West Ham could be facing losses of up to £100m in their first Championship season, even before accounting for player trading.
The only hope of balancing the books would be a fire sale — Bowen (£45m), Fernandes (£40m), and Summerville (£30m) — raising up to £125m.
Shareholders would almost certainly be required to inject more capital, most likely via a rights issue — just as they did during the pandemic with a £30m cash injection.
But EFL Profitability and Sustainability Rules (PSR) limit allowable losses to just £41.5m over a rolling three-year period.
Penalties for breaches include points deductions, fines or spending restrictions — meaning West Ham would struggle to spend their way out as they did in 2011/12.
The Irons beat Blackpool in the playoff final that year. Now Blackpool sit 17th in League One — and West Ham may be headed in the same direction if they don’t act fast.
Get a grip mate…
All all do is print doom & gloom for click bait ..
Starting to think you really don’t love the club like the rest of us ..
Been a hammer for over 40years & seen plenty of yo yo season’s .. we will always come back if the worst happens
Cheer up for gawd sake ..
Steve B
All the more reason for the fans to get behind the team and cheer and sing as loudly as possible for every match for the rest of the season. Lets stop the negativity, the protests and the booing regardless of how deserving it may be and come together to help the club get the points we need to stay in the top tier of English football. Spurs and Forest are panicking, replacing their managers and their fans are turning against their club. Let’s be the team with fighting spirit that achieves another great escape
There is a lot of conjecture and very poor economic assumptions and modelling.
Let’s start with the first point. The author points to relegation in 2011 seeing a reduction in revenue from 80.5 to 46 million. A 37.3 per cent reduction in revenue a major difference from the 50 per cent.we use for every further point
We then make the assumption that it would automatically be a 50 per cent drop in revenue as a rule of thumb. Incorrect this is not the mean median or even the mode drop in revenue for clubs relegated from the premiership
Let’s look at how the match day revenue is calculated. The author aims for hyperbole stating it could half from the high water mark of the days of European football. Failing to address that its fallen the last two years. It also fails to factor in the extra home game revenue from 23 home games compared to 19.
We then go on about how bad shape we would be in terms of player amotorisation but also fails to point how the selling of the players after relegation would affect this. Or without even mentioning how pre June 30th and post 1st July sales affect this figure.
The article seems to have at best a poor grasp of the efl financial rules.
I could go on and on point by point. But the whole aim of this article seems to be covering for the board and getting the excuses in early.
I doubt this comment will get published. But I am not impressed by the articles on financial aspects of the club. Only last week there was a article on.PSR yet it failed to even acknowledge that this is the last season of PSR and the implications of this.
Either its poor research or done for a reason
Bloody shame hope Sullivan loses millions we are west ham supporters support the team whatever division we are in .
I think that those transfer values would be well below market prices.
Why is it that West Ham United should continuosly sell at low ball prices.
We signed Fernandes for top dollar, out of the Championship, if another club wants him they should pay the correct going rate for a Premier League emerging top talent. Bowen guarantees goals and assists, Summervillie is rippong it up. FFS talk them up and blag it if necessary, but stop talking our players down in valuation because it doesn’t help our cause.
Once something is written and released onto the web it gains traction, please consider this before constructing your posts please Sean.
We’re not on relegation form, if we continue as we have been over the last eight games we finish on 42 points.
Continuing as they have been over the last eight games Forest finish on 39 and Tottenham on 35.
They’ve both sacked the manager though so whoever they bring in would need to hit the ground running. I wouldn’t be overly confident about the bloke Tottenham are bringing in.
Relegation fire sale? Haven’t been many examples of that in recent windows. Was Fernandes a fire sale when we bought him. Fire sale is when there’s one club interested. Summerville, Fernandez, Bowen would all have prospective suitors. The sales, and others that would happen would bail us out financially. It isn’t going to be pretty but we’ve a good bench of young players who should be up the Championship challenge. you think other teams when they have gone down in recent years haven’t been carrying debt and losses?
Let’s be honest Fernandes is already a better player than Rice and City want him, we are losing him whatever happens imho he is £125m player he is better than the two at Chelsea that went for 115m he wipes out the £100m on his own, Bowen 65-75m Todibo 30 – 40m, Summerville 60 – 65m, Taty £20m, Diouf 20 – 25m, AWB £30m, Fullkrug £15-20m, Alvarez £20m, JWP £10 – 15m, Hermansen if he continues like this £20m, Mavropanos £20m, Kilman £20m there is a lot of money in that squad a minimum of £350m god help us if it happens because it will be more yo-yoing again but depending on who stays and who goes we will be fine and that’s not including the parachute payments.
If they know what’s good for them Max Hahn is scouring the leagues for low cost rough diamonds, we need to find a replacement for Fernandes either way, I wasn’t sure about the price when we signed him but what a player consistently tops the power league in his age group probably the best in the World right now.
Well that was worth blowing up our stadium of 112 years for. 🙄
All of this is what happens when you have an owner who wants to be DoF when he’s simply incapable of doing the job, he appears to be operating in a dark tunnel where reality doesn’t matter to him Sean. Yet my fear is he will blame everyone except himself and when/if we get relegated he will double down on his view and want more control of team matters not less, someone really needs to disavow him of the delusion he has created and get him to take a step back. Cheers
We need to compare apples with apples here. Luton, Leicester, Southampton, Derby and the like are not comparable with West Ham United.
We will fare much better than the average relegated club. Although having stated that, we are not going down so we don’t need to worry.
COYI
So we would lose up to 100m in revenue. Yet with 55% parachute payment and 120m in player sales (very under valued in my opinion) we are actually making a profit?? For year 1 at least. So stop the scaremongering. Yes we lose our best players and no guarantee of Premiership return but it’s not a problem financially until at least season 2 and gives our U21 players chance to shine for zero cost!