Martin Samuel’s recent comments in The Times about West Ham United‘s financial situation in light of their summer spending are understandable. The club has undoubtedly made significant investments in the transfer market, raising possible questions about their long-term financial stability.
We all know that clubs cannot act without impunity in the transfer market anymore, after stricter new PSR regulations were brought into play.
However, it’s essential to consider the broader financial picture. The sale of Declan Rice for a substantial fee has provided a significant cash injection and that counted as all profit as he came through our academy. Also the club’s revenue streams, including matchday income, commercial partnerships, and broadcast rights, are relatively healthy.
Furthermore, West Ham’s decision to prioritise the sale of fringe players and reduce the wage bill is a strategic move to ensure financial sustainability. The club’s focus on young and developing talent, as evidenced by the signings of Luis Guilherme and Crysencio Summerville, also aligns with a long-term financial plan.
While it’s crucial for West Ham to remain compliant with financial regulations, the club’s recent transfer activity suggests a carefully calculated approach rather than reckless spending. The success of these investments will ultimately determine whether the club’s financial strategy has been vindicated
So the takeaway is no reckless spending? PSR is the most immediate issue with financial as it can lead to points deductions. There are two rules, losses over three seasons cannot exceed 105 million and in any one season 35. Those rules incidentally can be changed at any time, and there’s enough pressure building from the greedy six to believe that they might be relaxed. Those calculations also do not match what clubs record under accounting rules as profit or loss. Some expenses (youth teams for example are excluded). In the last two reported financial periods West Ham made a loss of 18 million and a profit of 12 million. Therefore, at least for the time being the three year rule is unlikely to be breached, its the one year 35 million loss that presents the problem. Worth mentioning that breaking the rule does not mean you are broke, just you are in danger of getting points deductions. Worth also mentioning that the UEFA rules are stricter so the fact that we are investing when we are not in Europe might not be coincidence. Add in that the limits have not been adjusted for inflation since they were introduced in 2013 and that the PL are looking at moving away from the current system to something more like UEFAs rules and perhaps West Ham are being more canny than Sean and others give them credit for. The 105 million limit, for example, if adjusted for player wage inflation would now be over 200 million.
So many of the teams above us are constrained by the UEFA rules. Then there’s the small issue of all Manchester City’s pending financial irregularities and talk in the press of potential 70 point deductions. One tends to believe that the PL will ride to the rescue of City to avoid the embarrassment of them playing in the Championship and in doing so change enough of the rules to avoid issues for West Ham.
Generally West Ham are in good financial shape. The issue is the PSR rules. And if things look as if they might go pear shaped as the season progresses there is always the January window to set things straight with a sale. Sad as it is waving goodbye to Kudos would likely resolve any issue.
I suspect one of the ‘jewels’ – be it Kudus or Paq man, depending on betting enquiry- will be on their way next summer to bring in another 90 mill. They both have 85 k release clauses and a half decent season will see Man C come knocking.
The idea that Manchester City are in the clear and will be able to spend like they have done in the past may be a poor one. Not outside the realms of possibility that they might get some form of transfer ban. And remember those sales do not bring in the amounts of money you are suggesting for PSR purposes. Any existing book value will need to be offset.
Man City to finish outside the Top 6 and Palace to finish in the Top 10 is 50/1 with Skybet. (There might be other bets around with similar outcomes).
If City are hit with a points deduction, it’s unlikely they would be sent down but I can imagine a sceranio where a deduction keeps them outside the Champions League.
Todays news
Premier League chief predicts huge Man City points deduction as Arsenal, Chelsea and Spurs watch on
According to The Athletic, one Premier League club executive has suggested they could be docked up to 80 points.
Interesting, C and H covering this shortly, Dudley, Suspect there will be banishments rather than points deductions in the worst case. Man City have 115 Charges starting in September….
If City are hobbled by sanctions, if ManU continue to circle around the plug hole for another season and Chelsea spend their way to mid table mediocrity perhaps a decent European place may be on?