Despite winning some silverware, West Ham swung in 2022/23 from a £12m pre-tax profit to an £18m loss, as revenue fell £16m (6%) from club record £253m to £237m, partly offset by profit from player sales rising from less than £1m to £17m.
West Ham have only reported a net profit once in the last
five years, losing an aggregate £126m in this period. This was very different
from the preceding 5-year period, when they were profitable on four occasions,
adding up to £70m. A game of two halves, if you will.
The main reason for the revenue decrease was broadcasting,
which fell £16m (10%) from £164m to £148m, due to less money in the Europa
Conference compared to the Europa League, exacerbated by the lower Premier
League finish.
West Ham’s £18m loss is not too bad. Although a few clubs
have managed to generate a profit, most notably Manchester City with £80m, many
clubs posted much larger losses in 2021/22, e.g. Chelsea £121m, Leicester City
£92m and Newcastle United £73m.
Player sales
West Ham’s loss would have been larger without £17m profit
from player sales, which was £16m higher than the prior year. This was very
largely due to the sale of Issa Diop to Fulham, though they also made money
from Craig Dawson’s transfer to Wolves.
That said, other clubs have done better than the Hammers
here, e.g. no fewer than six clubs have generated more than £50m from player
trading in the last couple of years with Chelsea £123m and Manchester City
£122m leading the way.
West Ham have not made that much money from player sales
with a profit of only £35m in the last three seasons. This was partly due to
COVID deflating the transfer market, but also a conscious club decision to hold
on to the talent. This season’s
accounts will be a completely different story, as they will include the club
record sale of Declan Rice to Arsenal for a reported £105m plus a couple of
deals with Italian clubs: Gianluca Scamacca to Atalanta and Nikola Vlasic to
Torino.
West Ham’s £46m revenue growth in the last four years
compares favourably with other leading clubs, but was comfortably surpassed by
Manchester City’s £178m (though many clubs are yet to publish 2022/23
accounts). As a result, the gap to the
Big Six has greatly reduced in the last few years from over £200m to around
£120m. In fact, West Ham’s £237m revenue
is now “the best of the rest”, which is defined as the seventh highest in the Premier
League. That said, it is still a lot lower than the elite, e.g. only around a
third of Manchester City’s £713m.
West Ham received €23m for winning the Europa Conference
League, after defeating Fiorentina in Prague. This was made up of participation
fee €2.9m, prize money €12.6m, UEFA coefficient €1.0m and TV pool €6.5m. However, the club stated that money for the
final was not included in these accounts, as it was played in June, i.e. after
West Ham’s 31st May year-end.
West Ham have qualified for the last 16 of the Europa League
by winning their group with five victories.
This is worth €16m with another €1.8m available if they reach the
quarter-finals.
West Ham attracted the eighth highest crowds in all of
Europe last season. They might be even higher in the future, as they have
agreed in principle a plan to further expand the usable stadium capacity by
5,500 to 68,000.
The club has been looking for a stadium naming rights
sponsor for a while, but has had no joy as yet. Recent media reports suggest
that Allianz might strike a deal, but this is unlikely to be a huge
money-spinner. The club would not
receive any money from the first £4m, while anything above that would be split
50:50 with the LLDC (London Legacy Development Corporation).
West Ham’s £137m wage bill was only around mid-table in the
Premier League. It was at least £200m less than the top four, which puts into
perspective the performance of Moyes’ team. Perhaps more meaningfully, it was
also more than £25m below Leicester City, Newcastle United and Everton.
Over the last two seasons, West Ham have enjoyed the sixth
highest transfer spend in the top flight, albeit their £304m is less than a
third of Chelsea’s £955m. Interestingly, this was around the same as Newcastle
United and actually more than Liverpool.
However, despite this significant investment, West Ham’s £386m squad
cost is still only ninth highest in the Premier League, miles below the elite
clubs.
In the last 10 years, the majority of West Ham’s cash has
come from operations £349m, supplemented by £154m of capital provided by
shareholders and £29m from the Boleyn Ground sale. Most of the available funds was spent on new
players £383m, with another £61m on interest payments, £45m on repaying owner
loans and £30m on capital expenditure.
Owner funding
Until recently, West Ham’s owners had provided very little
funding to the club, but £102m has been injected in the last three years. This included £30m investment from the
shareholders (mainly Sullivan and Gold) in 2020/21 via a rights issue, which
was mainly used to support the club during the pandemic, followed up by a net
£72m in 2021/22, as Kretinsky’s £125m investment in equity was partly used to
repay £54m of shareholder loans.
Even after this increase, West Ham’s owner funding was
unsurprisingly miles below the likes of Chelsea £577m and Manchester City
£515m, but also a lot less than a few aspirational clubs, e.g. Everton £678m,
Aston Villa £492m, Brighton £356m and Leicester City £340m.
Despite the financial loss, the 2022/23 season was a very
good one for West Ham, as they triumphed in the Europa Conference, while
ultimately pulling away from the Premier League relegation zone. This success
was facilitated by the significant investment into the club.
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