“West Ham’s Financial Landscape: A Detailed Look at the Club’s Investments and Revenue”

West Ham United Football Club has recently disclosed its financial results for the season concluding on May 31, 2023. The club reported a turnover of £236.7m, a decrease of £16m from the previous season’s record turnover of £252.7m.

The decline in revenue was primarily attributed to the club’s final league position. West Ham finished 14th, seven places down from the previous season’s seventh place. Additionally, the Hammers had 21 games televised on UK TV, two less than the previous season. However, the Europa Conference League final prize money, received after May 31, will be included in the next season’s accounts.

One of the significant factors contributing to the decrease in revenue was the club’s record-breaking investment of £183.9m in the men’s playing squad in the summer of 2022. This substantial investment led to player transfer amortization growing to £65.3m, resulting in a net loss before tax of £18.3m.

While ticket revenue experienced a slight decrease, amounting to £41m, thanks to the European run at home, commercial revenue and sponsorship grew slightly to £35.1m, with retail and club store revenue slightly falling to £12.91m. TV income saw the most significant drop in revenue terms, amounting to £147.58m from £163.3m the previous season.

Operating costs for the club were reported at £190.6m on revenue of £236.6m, resulting in an operating profit of £48.4m. However, transfer payments of £65.3m wiped out the operating profit, leading to a loss of £18m. Notably, no interest was paid to any directors, and no loans are owed to any directors.

In terms of the club’s financial obligations, West Ham paid off their £55m loan to MSD Holdings, owned by Michael Dell, and opened a £40m overdraft with Barclays Bank. The club also revealed that the transfer of player registrations completed subsequent to May 31, 2023 last summer amounted to a net £4,678,000, with a further net £12,629,000 potentially payable contingent on certain future events.

Additionally, it was disclosed that West Ham paid a delayed player loan fee of £430,828 on June 7, 2023, to Spartak Moscow in respect of Alex Kral, along with an interest payment of £21,144. This payment had previously been forbidden due to the sanctions imposed following Russia’s illegal invasion of Ukraine, but was settled following a change of ownership at the club and an instruction received from FIFA.

The club’s Vice Chairman, Karren Brady, also saw a decrease in her annual pay packets from £2.24m to £1.37m last season, primarily due to a bonus she received in the previous season of 2022.

Looking ahead, West Ham’s financial landscape indicates that the club is allowed a UEFA Financial Fair Play (FFP) allowance of 80% for wages, transfers, and agent fees for the upcoming season, translating to a £189.28m budget. However, with overall wages at £136.8m and transfer and agent fees at £65.3m, the club has notionally exceeded this at £202m. West Ham can exclude non-playing and coach staff wages, alongside spending on infrastructure, community projects, the Academy, women’s football, and training facilities, bringing them back within the FFP budget allowed by UEFA.

In conclusion, the financial results of West Ham Football Club provide a comprehensive understanding of the club’s investments, revenue, and financial obligations, shedding light on the intricacies of their financial operations. (Source: Sean Whetstone, Six Foot Two)