West Ham United’s finances are in sharp focus for several reasons.
Earlier this week, the latest Deloitte Money League was published.
Given the financial might of the Premier League, a lowly West Ham United still rank within the top 20 clubs around the world in terms of revenue generated.
However, there has been a decline. Prior to this year’s edition, West Ham ranked 17th in world football in the last Deloitte figures – having generated a revenue of around £270m.
If you could only keep ONE of these two players in January – who would it be?!
This year, however, they sit 20th and behind the likes of Benfica and Stuttgart, who operate in leagues far less financially powerful than the Premier League.
West Ham saw their revenue decrease by 14% to around £240m.
An expert has now explained why, and what it could mean for majority shareholder David Sullivan.
West Ham’s alarming drop in revenue explained
After the figures were released, Hammers News spoke to football finance expert Adam Williams.
“West Ham’s revenue has shrunk by about £30m from last season, as we at Hammers News forecasted it would,” he said.
“They have fallen to 20th place in the Deloitte Football Money League as a result. On face value, that’s bad. But there’s another way of reading this, which is to look at what it says about West Ham’s future.
“There were only two teams in the top 20 of the Money League who played no European football of any description for 2024-25: Newcastle United and West Ham. Granted, Newcastle were a long way out in front of West Ham, but they finished nine places higher than them in the Premier League too, with a big impact on prize money.
“They also won their first trophy in many years. The prize money from that was negligible, but the matchday income and retail boom that followed the Carabao Cup win certainly were not.
“Newcastle also have a few sweetheart sponsorship deals with PIF which probably make the revenue gap between themselves and West Ham larger than it would be otherwise.
Would you take relegation if it meant that David Sullivan would leave?! 🤔
Not a nice position to be in – but what would YOU choose if you had to?
Williams highlighted the impact that relegation from the Premier League could have on West Ham finances going forward.
That could place a huge financial burden on the unpopular Sullivan, who has been urged to sell the club to the right buyers for what feels like an age now.
“I think the fact that West Ham are still so high in the list despite that speaks to A) the huge potential of the club if they play their cards right under a smart ownership regime and B) the extent to which David Sullivan has squandered an absolutely brilliant hand.
“We’re expecting them to lose £100m when the 2024-25 accounts are released, which should be before the end of the month. That reflects a big increase in transfer amortisation, which is how clubs account for new signings over a player’s contract length, wages and operating expenses, as well as the fall in revenue.
“But if they stay in the Premier League this season, they will have some grace as far as PSR concerned. They won’t breach this season, regardless of what they have spent this January and the business they might do before the window shuts.
“And if they stay up, PSR is being replaced by SCR, which assesses compliance based on revenue and first-team costs, not profits or losses. Under that system, there is some flexibility for teams who exceed the 85 per cent Squad Cost Ratio cap as long as they make up for it in subsequent seasons, so West Ham wouldn’t be under any immediate threat. In the Championship, however, it’s a totally different story.
“The EFL haven’t said that they are replacing their current PSR-style system and West Ham’s £100m loss in 2024-25, as well as probably something similar at an operating level in 2025-25, becomes a huge albatross for them. They would have to recalibrate their cost base very drastically, even by the standards of relegated teams. That will mean sweeping player sales, operational cost-cutting and so on.
“So, I think the stakes are higher for West Ham than nearly every other club facing relegation from the Premier League in recent history.
“They should be going for broke in January. Otherwise, when £100m is wiped from your revenue overnight in the Championship and you’re facing PSR issues, there’s no guarantee you are getting back to the Premier League without major, major surgery.
“From Sullivan’s point of view, it’s also probably going to knock a couple of hundred million or so off the price he could sell West Ham for, as any potential investor would be taking on so much more risk. Personally, I think he’s probably regretting not selling the club for £800m to £1bn when he had the chance.”
West Ham United attempting to spend their way out of relegation trouble
The January transfer window takes on an added importance, then.
Sullivan has already backed manager Nuno Espirito Santo with two new signings but it does not feel like enough.
Nuno’s side remain five points adrift of safety and desperately need defensive reinforcements before safety feels like a genuine possibility.
Indeed, West Ham are pushing for new signings. It’s imperative and, as Williams explains, the money spent in January could actually save the club millions.
Sullivan has been tipped to sell West Ham if they are relegated and while that would no doubt be a positive in the eyes of many supporters, it would clearly have major financial ramifications on the club going forward.
Receive a digest of our best West Ham content each week direct to your mailbox
