News

What does the Premier League spending cap mean for West Ham

|
Image for What does the Premier League spending cap mean for West Ham

By Sean Whetstone

Earlier this week West Ham along with 15 other Premier League clubs voted in principle for the introduction of a spending cap called financial anchoring or teethering.

Manchester United, Manchester City and Aston Villa voted against it with Chelsea abstaining which gives you a clue who it might affect the most.

The Premier League have already agreed to bring in a new revenue spend 85% ratio from the 2025/2026 season similar to the UEFA ratio that West Ham has had to follow for the past two seasons.

That financial control limited clubs in European competition to be allowed to spend 90% of their turnover on player wages, transfer amortisation and agent fees, this reduced to an 80% ratio this season and will reduce further to 70% next season.

West Ham just about scrapped through with that UEFA regulation last season and had no issues this season thanks to the sale of Declan Rice.

This means they are well placed and have the financial experience to pass the 85% ratio regulation.

West Ham’s total wages for last season were £137m with a transfer amortisation of £65m and £14m of agent fees.

As the Hammers’ turnover was £237m last season so 85% of that works out at a £201m spending limit.

Although West Ham’s published wage bill is £137m only around 70% of this is players’ and coach staff wages meaning around £96m of wages are in scope.

Add to those £96m wages £81m of transfer amortisation and transfer fees and you get a total of around £177m some £24m under the maximum allowed.

Coming back to the new anchoring proposal that will allow clubs to only spend a multiple of the lowest broadcast fees received from the bottom club which is currently £104m.

If that multiple is five then the spending cap would be £520m, if it was six  times it would be £624m while if it was the low estimate of four times it would be £416m,

In reality, it doesn’t matter what the multiple is as West Ham’s revenue is nowhere near those levels and that is without the 85% ratio rule already approved.

The new anchoring or teetering proposal for a Premier League spending cap has zero effect on West Ham and is unlikely to ever do so.

Share this article

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