Poor decision-making has hit West Ham

Last night’s victory at Fulham was a significant one for West Ham and gives them hope of staying up.  However, major challenges remain.  Things look no better for West Ham off the pitch, as they swung from a £57m pre-tax profit to a £104m loss in 2024/25, the worst result in the club’s history.

The following report summarises the forensic analysis of the Zurich based football finance guru Swiss Ramble.   Much more in depth analysis is available on his Substack phase.

This represented a massive £161m deterioration in the bottom line, largely driven by profit on player sales falling £76m from £96m to £20m, while revenue also dropped £42m (16%) from £270m to £228m.  West Ham’s £104m loss is the second largest so far reported for 2024/25, only surpassed by Tottenham’s £127m (according to UEFA’s Club Finance and Investment Landscape report).

Despite the steep reduction in the top line, operating expenses still rose £29m (9%) from £307m to £366m, while interest payable more than doubled from £8m to £19m.

The revenue decline was basically driven by West Ham being less successful on the pitch, which meant a lower position in the Premier League, while the previous season benefited from participation in the Europa League. 

This led to reductions in all three revenue streams, especially broadcasting, which was down £35m (21%) from £167m to £132m. Match day dropped £6m (12%) from £45m to £39m, while commercial fell £2m (4%) from £58m to £56m.   Broadcasting now accounts for 58% of total revenue, followed by commercial 25% and match day 17%.

The most important factor in West Ham’s much worse financial performance was the significant decrease in profit from player sales, which fell £76m from £96m to just £20m.

West Ham have lost a total of £116m in the last decade, but this was heavily impacted by last season’s £104m deficit. Put another way, they just about broke even before their finances fell off a cliff in 2024/25.

If they were relegated, the chances are that West Ham would have one of the highest revenues ever generated in the Championship. If we assume a 40% decrease, that would give the Hammers £137m revenue, which would overtake Leeds United’s current record of £128m, which was set in 2023/24.

West Ham’s 62,432 attendance was the second highest in the Premier League, only behind Manchester United 73,815, with the biggest crowds in London, ahead of Tottenham 61,127 and Arsenal 60,252.

West Ham benefit from only paying a token fee for the use of the London Stadium: other clubs have had to incur substantial debt for their own stadium developments. Furthermore, their rent would halve in the event of relegation. On the other hand, the agreement limits their ability to grow non-match day income.  Many fans still regret the way in which the atmosphere is constrained by playing in what was designed as an athletics stadium.   I remember how exciting the atmosphere was at Upton Park.

Wages

West Ham’s wage bill rose £15m (9%) from £161m to a club record £176m, following significant investment in the squad, despite no European bonuses. This presumably included a severance payment to Lopetegui.   West Ham’s wages had remained at more or less the same level for many years, which is rare in the world of football, but they have shot up by £39m (29%) in the last two seasons.

West Ham’s £176m wage bill is ninth highest in the Premier League, exactly in line with their revenue ranking, so they have badly under-performed on the pitch.  That said, this was less than half of the top four, namely Liverpool £428m, Manchester City £408m, Chelsea £353m and Arsenal £347m. Perhaps more meaningfully, it was also a fair way below Aston Villa £268m and Newcastle United £238m.

The Swiss Ramble estimates that Baroness Brady has received around £16.9m in renumeration since her arrival in January 2010. Some supporters feel that this is fairly generous, given the part-time nature of the role.

Hey big spender

The Hammers have once again been big spenders this season with another £173m, though their challenge in the Premier League was highlighted by the even bigger amounts spent elsewhere, e.g. Liverpool £420m, Chelsea £294m, Manchester City £261m and Arsenal £256m.

it is evident that West Ham have spent a lot of money on new players, but it’s fair to say that the recruitment has been terrible, not helped by the choices being made by four different managers, all with their own playing styles.  In fact, they had the eighth highest net spend in the Premier League in the last five years, only below the Big Six and Newcastle United.

West Ham’s much higher expenditure on new players has been partly funded by transfer debt.    To give an idea of how onerous transfer debt is for West Ham, it represents a chunky 86% of the club’s turnover. Only two clubs in the Premier League have a higher percentage, namely Chelsea 106% and Nottingham Forest 97%.

There has been no funding by owners in the last four years.   In stark contrast, owners at other clubs have been far more generous with no fewer than six clubs receiving more than £200m in the last three years, namely Chelsea £927m, Newcastle United £303m, Fulham £302m, Everton £300m, Aston Villa £272m and Manchester United £239m.

Even if West Ham manage to survive in the top flight, they will have a big challenge on their hands to resolve their situation, as the significant transfer spend has failed to improve the squad.  In the worst case scenario, relegation would not be a catastrophe, assuming that West Ham make good use of their natural advantages, but it would certainly lead to the sale of many of their best players.