West Ham punching above their weight

The authoritative Swiss Ramble reviews the latest accounts of West Ham United.

The pre-tax loss reduced from £65m to £27m, as revenue rose £53m from £140m to £193m despite COVID impact on gate receipts, as £26m TV money deferred from 2019/20 accounts. Owners provided £30m share capital. Player sales fell £7m to £18m.

Although the £27m loss is not great, it’s one of the better financial results of the clubs that have reported so far in 2020/21, with only Manchester United having a lower loss of £24m. Two other London clubs have posted much higher losses: Chelsea £156m and Tottenham Hotspur £80m. West Ham have now posted losses three years in a row, adding up to a combined £120m deficit over that period, though they did make profits in four of the previous five years.

The £193m revenue is currently 7th highest in the Premier League. It has increased by £72m (60%) since 2015, which is pretty good, but the problem is that the Big Six has seen even more growth , e.g. Spurs £164m and Chelsea £121m, so the gap has still widened.

As the club stated, “the financial effect of COVID has been significant for all PL clubs and West Ham United is no exception”. Net impact in 2020/21 was £12.5m, as revenue was £15.9m lower, offset by £3.4m cost savings.

Broadcasting revenue virtually doubled from £83m to £163m, including deferred money from 2019/20, which offset COVID driven reductions in match day, down £22m (98%) to just £508k, and commercial, down £5m (16%) to £29m.

Commercial revenue fell £5m (16%) from £34m to £29m, comprising £19m commercial activities and £10m retail and merchandising, due to games played without fans. Retail actually rose £1m, despite closure of many outlets, thanks to successful online sales.

Commercial income of £29m is 10th highest in England, a long way behind the Big Six (the lowest of which is Arsenal £142m, i.e. five times as much). There has been hardly any growth in the last five years, while others have seen this revenue stream surge, e.g. Spurs up £93m to £152m.

Like many clubs, West Ham have become increasingly reliant on player sales, making £114m over the last five years, averaging £23m per annum. However, very little was made this season (before January window) with only small money received for Felipe Anderson’s move to Lazio.

The 2021/22 figures will benefit from qualifying for the Europa League. The Swiss Ramble estimates they have already earned €24m for reaching the last 16. That’s not too shabby, but is a lot lower than the Champions League representatives, e.g. Chelsea and Manchester City both received €120m in 2020/21.

The wage bill only rose £2m (2%) from £127m (excluding Pellegrini £3.5m pay-off) to £129m, still lower than the £136m peak in 2019, though wages have grown by £45m (53%) in the last five years. The wages to turnover ratio improved from 91% to 67%, though is up from 52% in 2017. It was obviously impacted by the COVID revenue shortfall. It was still pretty good for the Premier League, better than Chelsea 77% and around the same as Manchester United 65%, though worse than Spurs 57%.

The £127m wage bill is around mid-table in the Premier League, though £36m below 7th placed Everton £165m. For some perspective, wages were around £200m less than Chelsea £333m and Manchester United£323m in 2020/21, which highlights how well Moyes’ team has performed.

2019/20 average attendance of 59,925 (for those games played with fans), was the second highest in the Premier League, only beaten by Manchester United 72,726. Club is in latter stages of securing planning consent to raise capacity from 60,000 to 62,500, the largest in London.

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