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West Ham’s financial meltdown – the reasons why

West Ham’s current financial crisis is not just about the global pandemic.

The Hammers were already on target to lose £40m last season before COVID hit and those losses increased to £50m primarily due to loss of ticket and retail revenue after lock-down.

The club spent more than they could afford under Manuel Pellegrini with over £200m committed in transfers and a wage bill of £136m at its peak.  West Ham still owe over £87m of that  to other clubs at a rate of over £5m per month.

The board and the club’s senior management must take their share of the blame as it was them signing the cheques and agreeing to those levels of spending under the ambitious Pellegrini project.

West Ham earned £123m from broadcasters in the 2018/2019 season and budgeted to improve on that in the 2019/2020 season. In fact they dropped £13m to £110m for last season after finishing sixteenth and will receive less for the next two seasons in the Premier League as part of a £330m rebate to broadcasters split by all clubs.

Panicked by the possibility of relegation the board spent a further £45m of committed spending  in January this year on Jarrod Bowen, Tomas Soucek and Darren Randolph.

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In July the shareholders injected £30m of cash into the club via a rights issue followed by another loan from Media Rights and Funding in August likely to be in excess of £40m.

But stories still persist that the £5.4m instalment for Haller remains unpaid at the beginning of the week with the Soucek first instalment due this summer to Slavia Prague.

What will happen to the £4.5m received from Celtic remains to be seen but transfer activity is likely be limited this summer as the board and the manager desperately attempt to balance the books on wages and transfer budget.

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About Sean Whetstone

I am Season Ticket Holder in West stand lower at the London Stadium and before that, I used to stand in the Sir Trevor Brooking Lower Row R seat 159 in the Boleyn Ground and in the Eighties I stood on the terraces of the old South Bank. I am a presenter on the West Ham Podcast called MooreThanJustaPodcast.co.uk. A Blogger on WestHamTillIdie.com a member of the West Ham Supporters Advisory Board (SAB), Founder of a Youtube channel called Mr West Ham Football at http://www.youtube.com/MrWestHamFootball, I am also the associate editor here at Claret and Hugh. Life Long singer of bubbles! Come on you Irons! Follow me at @Westhamfootball on twitter

29 comments on “West Ham’s financial meltdown – the reasons why

  1. I could have predicted that this had been written by Sean Whetstone…

  2. Board translation – We was forced to sell Rice to balance the books. They will then blame it all on Pellegrini.

    You cant pull the wool over my eyes.

  3. They should sell the club to people that understand how to manage it, have deeper pockets and a strategy that doesn’t involve a recruitment plan which revolves around agents DS knows.

    • Might be time to hire Ralf Rangnick failing that and have him implement a scouting network ?

  4. How much in interest have G&S paid in the last 3 years? That would have helped.
    Years of Brady telling us how clever and financially astute she is, maybe she should tell us how good she is now!
    So our debts are now bigger than when they took over, and we don’t even own our own ground now.
    Every club has the Covid issue , but they all seem to be coping ok.
    On money owed to clubs, they have stated each season that they have spent the money on transfers so they must have budgeted for these payments previously.
    You know the answer the board will come up with, Rice….

  5. Weren’t these were the 2 or 3 (Sullivan, Gold and Brady) who decried the excesses of the previous owners, said West Ham was a basket case that no-one would ever have bought etc etc. promised financial prudence and a pay down of the debt.
    OK so Covid has a significant impact but the sale of Upton Park generated considerable funds, the cost structure of the Olympic stadium is a fraction of Upton Park…..and the monies from the broadcasting rights has risen significantly. All the while we have gone backwards……

  6. I’m sorry but it’s the boards fault for not spending big 2 seasons ago and now it’s the boards fault for spending big this season. Its getting a bit boring now… They clearly are trying to push as much as possible with regards to spending because the fans are on their back, so some blame has to go to the fans too for pushing them to spend the money beyond our means.

    • Sorry is this legit ? Mike are you genuinely sayimy the fans need to take some of the blame for this mess. 😂 sheesh

  7. WHU have a squad of potentially decent players but something is wrong? Albian was scoring goals for fun before he cam to them, likewise HALLER et al. They have shipped out young players who were some of the most talented in the Country. Something must change

  8. Lol..

  9. The chairman went for it with Pellegrini and it backfired badly, signings that simply have not worked and now we are stuck with these players because nobody else wants them and an ever-increasing bet things could turn out extremely bad for West Ham United or David Moyes could turn things around !

  10. What is this shades of the past. I remember that old line., we need to balance the books. What is the score on the Board now, two Billonaires and any number of Multi-Millionaires ? Yet we are in debt. Do you believe they would be that inept in business ? They signed cheques without thinking. One is a Dragon and they sign cheques without thinking. PULL THE OTHER ONE. The Board will not put their hands in their pockets like other Boards, who want success. No they expect us, to watch another Season full of drivel. Third rate old foggies trying to keep up with top class Players. No Thanks, I would rather watch BBC pay to much and be bored out of my mind. Oh sorry that was last season at West Ham.

  11. IMHO – it may be that COVID has placed additional financial constraints on the club, but that’s probably true of 99% of all business in 2020….

    What isn’t acceptable is buying players for top whack only to sell them on after a season or two for peanuts…..

    The manager (David Moyes) will have to find a way to make the players he has on board work together as a team and earn their wages.

    It’s not like Anderson, Lanzini, Yarmalenko (And even Haller) have suddenly become bad players…??

  12. If we had gone down the loss of revenue would have completed the disaster. Fortunately Moyes did the trick again and the club is heading in a healthier direction. You have to give the guy a lot of credit. It would be great to get Eze but if funding is so limited I’d make my first purchase a full back.

  13. In business the buck stops at the top. The amount of blame shifting and frankly incredulous crap coming out from you today is astounding even by your standards.

  14. I had a mate who dreamt of owning a Porche. He eventually managed to get one in the end, but sadly he had to get rid of it soon after as he couldn’t afford to maintain it.
    There IS a moral to this story……If you can’t afford it, get Rid of it ASAP
    The words of those Birmingham supporters have never left me and here we are today those predictions ringing in my ears 🤔

    • I don’t know whether you noticed what happened to Newcastle’s buy out that never was. How and why with finances across the world devastated – UK biggest recession in history – would anybody be gagging to buying a football club which hasn’t had any income for six months and may not get any in the forseeable future. You comment kinda feels like a history lesson or at best whilst living in the past.

  15. 😂😂😂😂😂I said last week ,wait for it the accounts will be out In a bit to show how much we cant spend …..😂😂😂😂 same as alot of you …we all just knew this would be the nxt story …that has made me laugh

  16. Goodbye Declan Rice….. unfortunately it’s the unpalatable truth. The Haller situation has shone an exposing light on the dreadful state of our finances – WHU are skint! I was hoping that we would re-build around Dec (as skipper) Bowen Soucek and push on to the so called and promised “next level”. Clearing the dead wood and selling Rice will raise £130M+ but with the debt the club has we’ll be lucky if we see half of that funding new signings. Frustration is not the word!!!

  17. Just from the amount of similar comments..I can see another awful season on the horizon….comments dont make seasons but we can all see were this ends I think….🙄

  18. It’ll all work out fine, stop going on about how s**t the board are, it’s so tedious.

    We won’t win the league, won’t be in the champions league but won’t get relegated either. Aside from a decent cup run, what do you board haters really expect?

    I’m all ears…

    • Well maybe a start would to run the club properly mate …they really have done well in buying and selling and balancing things dont you think 🙄🙄

    • A decent training complex , a competent scouting system, a decent stadium. Owners who keep their mouth shut , better than 16th place finishes . Shall I go on ?

  19. Sean, that is the most negative interpretation of our current financial situation. The bottom line is that this club is one of the top 10 earners in the world’s richest league. While the Covid19 has had an impact it is a transient event and within a year or two the effect will be in our rearview mirror. Westham has an inherent value that underwrites the year to year financials.
    They are business people who will realise the actual value of the business is dependent on Premier League survival so they will need to invest in order to not be placed in the position they were this year. The investment will not be of the Pellegrini scale but it will need to be enough to fix several problems.
    An analogy might be similar to owning a building and the tenants don’t pay enough to cover the building operational costs. You would not stop investing in its maintenance because that would diminish the building’s worth.

  20. Simply fact is, our owners are billionaires. Other teams with billionaire owners often invest their own money, instead of running the club as a business. You cannot claim FFP, look at villa ,Fulham et al that spend much more than us with smaller gates. its basically BS for not wanting to invest in the club and line their own pockets,

  21. This is about softening us all up for the sale of Rice to Chelsea….

  22. At least the Board has learnt from now on not to follow “fans” advice to get a big name manager and leave it to him to make all transfer decisions.
    If we had stuck with David Moyes originally most of current mess averted!
    We will survive ok in middle of league with poss Cup run. Anything else is fantasy so waste of time going on about it. Will be interesting yo see what happens to rest of league financial outcomes!

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