West Ham’s owners have broken their silence with a major statement addressing precisely what the Premier League’s new financial rules will mean for the club going forward.
- Hammers News exclusive
The hierarchy have laid out their stance on the new system replacing the Premier League’s Profitability and Sustainability Rules (PSR), how it will shape spending, and what it really means for West Ham.
Hammers News revealed West Ham’s board were angry about financial rules chaos ahead of a big Premier League meeting and votes this week.
The financial situation at the London Stadium has been making headlines this year.
West Ham had to sell to buy in the summer and there have been noises from the corridors of power that there are concerns over the risk of a potential future breach of PSR.
West Ham braced for losses in excess of £100m next month
That’s despite three consecutive European campaigns, a first major trophy for 43 years and £105m of pure profit from the sale of Declan Rice in recent seasons.
West Ham have warned record losses in excess of £100m are on the way in their annual accounts set to be published next month.
A lack of funds for transfers has left the Hammers with a squad woefully short in key areas as Nuno Espirito Santo battles to keep the club in the Premier League.
The financial situation and recruitment are two big factors behind fans protesting against the ownership again.
The West Ham board have been pushing for new financial regulations.
So all eyes were on the Premier League meeting where votes were held on new rules on Friday.
That vote saw PSR voted out and replaced by squad-cost ratio (SCR) financial rules.
Under SCR, clubs would be limited to spending 85 per cent of their revenues on player wages, transfers and agents’ fees.
Now West Ham’s owners have made a major statement on the impact of the new financial rules and what they will mean for the club.
Any Premier League vote needs 14 votes to be passed and the PSR/SCR vote achieved just that, with 14 clubs in favour and six against.
How new SCR rules impact West Ham
Teams that are participating in UEFA competitions will still have to adhere to that governing body’s stricter SCR limit of 70 per cent.
Squad costs chiefly consist of player and manager wages and outgoing transfer and agents’ fees.
Although the limit is 85 per cent, there is also a rolling additional allowance of 30 per cent – with clubs spending over the 85 per cent cap receiving a financial penalty.
Should West Ham or their rivals exceed 115 per cent, they will face a points penalty (starting at six points).
West Ham’s owners will also be required to set out their spending plans over the short, medium, and long term in new sustainability rules that were also passed unanimously.
Board say SCR is ‘good’ for West Ham
That will be subject to three tests covering the current season’s costs as well as “unforeseen fluctuations,” another looking at whether a club can handle issues such as relegation to the league below, and the third assessing a club’s debt over the long-term.
Speaking about the new SCR rules, a top spokesman for West Ham’s owners told Hammers News it is a positive development for the club.
Ahead of the vote, West Ham’s owners said uncertainty over the financial rules model was making it hard for clubs to plan ahead.
But now the Hammers are relatively happy with the switch to SCR, saying it is ‘good’ for West Ham.
Although there was also a warning the financial landscape is still tough for the Irons.
“SCR is good for us,” the top spokesman for West Ham’s board exclusively told Hammers News.
“We would have had real problems next season due to the Declan Rice income no longer being there in year one of the new PSR accounting cycle.
“We still have problems, but smaller ones due to no Europe and poor league position which have meant low ladder payments.”
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