Arsenal
Aston Villa
Chelsea
Crystal Palace
Everton
Fulham
Leeds United
Liverpool
Manchester City
Manchester United
Newcastle United
Nottingham Forest
Southampton
Tottenham Hotspur
West Ham United
Wolverhampton Wanderers
Transfers
West Ham have ‘get out of jail free card’ amid £171m transfer reveal
West Ham have been one of the most active clubs in the transfer window so far – but is their big spending set to continue?
Niclas Fullkrug, formerly of Borussia Dortmund, became the Hammers sixth signing of the summer earlier this week, with the club paying £25m for the striker’s services.
Max Kilman, Crysencio Summerville and Luis Guilherme have also arrived for big fees, while Guido Rodriguez and Wes Foderingham have signed for free.
Their net spend and total expenditure are both second in the Premier League since Julen Lopetegui’s arrival.
When you look at the finances in recent years, this is perhaps not surprising.
The GSB regime have always advocated a self-sufficient model, and the Irons have more or less broken even in recent seasons.
To explore the West Ham’s finances and whether this level of expenditure is sustainable, TBR spoke exclusively to Liverpool University football finance lecturer and Price of Football author Kieran Maguire.
Another big naming rights deal signed in London with West Ham still missing out
In an era of Profit and Sustainability Rules in which spending is tightly tied to revenue, commercial income is central to the playing budget.
One area that Man United, Everton, Tottenham and West Ham are all targeting at present is stadium naming rights.
A recent report from industry experts Kroll found that the UK football naming rights space is worth £75m annually.
Significantly, Twickenham, home of England rugby, has just struck a £100m, 10-year deal with German financial service institution Allianz, who also sponsor Bayern Munich and Juventus’s stadiums.
Allianz were previously in negotiations with West Ham and the London Stadium landlords over a potential deal.
But does the failure to strike a deal with Allianz signify that the search for a naming rights partner is now a losing game?
“I think if you get it right, it can work even after a long time,” said Maguire.
“There is talk of Snapdragon having some form of naming rights for the new stadium at Man United.
“In cricket, the KIA Oval has been accepted. The fact that Twickenham is an established stadium and is taking naming rights does show that there is some flexibility.
“From what I understand, there were negotiations. It’s fair to say that the landlords’ reputation for competency is not great.
“Whether this was due to administrative bureaucracy that prevented progress at the London Stadium, or simply Twickenham putting together a package that is more attractive, we don’t know.
“My concern with Twickenham is, how many times is it really mentioned? England play their home matches at the stadium four or five times per season, and that is about it.
“All of the focus is on £100m, but it is over 10 years, so it is £10m per year.
“It is a bit like people who are critical of the BBC quoting the TV license as an annual cost, whereas Sky they quote on a weekly basis. You can manipulate numbers.“
- READ MORE WEST HAM NEWS: West Ham considering shock move for player who Niclas Fullkrug called ‘outstanding’
West Ham could have been good fit for Allianz
The London Stadium landlords are entitled to the first £4m of any naming rights deal, plus a 50 per cent cut thereafter.
And after nearly a decade at the stadium, reports have suggested that Allianz saw rugby as a better, more fitting investment than Premier League football.
Maguire is sceptical, however.
“It is a lost opportunity for West Ham. Allianz are a good fit for rugby—they are a nice, blue-chip brand.
“But in terms of the value of football stadia naming rights in general, Emirates are perfectly happy at Arsenal, and American Express are at Brighton. They are both from big industries, airlines and financial services.
“That shows football’s reputation from the 1980s doesn’t apply anymore. That’s why you see blue-chip brands striking front-of-shirt deals with football clubs. So I don’t think that is a barrier.”
Why have West Ham taken out a £30m loan facility?
Earlier this week, a Companies House filing showed that West Ham had renewed a £30m debt facility with Barclays, which essentially functions as an overdraft.
This facility has the scope to move to £40m in certain circumstances.
What might this extra financial flexibility be used for? Maguire explained.
“West Ham have been very active in the transfer market to date this summer.
“They are aware that they have erratic cash flows. While the stadium is 62,000 capacity, they have something like 47,000 season ticket holders. So the vast majority of money has already been received.
“Sponsors tend to pay at the start of the season or in a couple of instalments.
“They have already received their first instalment of the Premier League broadcast deal. That’s normally around £35m to £40m. Then you get instalments throughout the year.
“When you get to October or November, West Ham have a wage bill that is £12-13m per month and you have just two home fixtures where you’re not bringing in much money, you need cash flow.
“They don’t get any money from catering because of the nature of the rental deal. They aren’t selling much merchandise in October and November.
“You have a large amount of cash going out in terms of payroll and very little cash coming in. If you’re waiting for the next Premier League instalment to come in, an overdraft facility makes sense.
“I’d encourage any business that has erratic cash flows to take a similar approach. You don’t want to be borrowing for the whole 12 months, so it makes far more sense than taking a loan.“
West Ham counting costs of heavy spending, but Declan Rice instalments will cover them
After spending nearly £110m this window, how will West Ham’s investment impact their ability to spend in future windows?
As Maguire explains, the sale of Declan Rice, which counted as ‘pure profit’ in PSR terms, has insultated them somewhat.
However, that does not mean that the club can continue spending freely indefinitely.
“From a PSR point of view, they have a Declan Rice-shaped get out of jail free card for the next three years, exactly as we have seen with Jack Grealish at Aston Villa.
“While there is very much a focus on the current market with regards to player trading, I always look at the small print of the financials.
“West Ham have spent a lot of money. In 2022-23, they spent £184m. An awful lot of that was buying players on credit. Therefore, at the end of 2022-23, they had outstanding player payables of £171m.
“That is a drain on resources. If you maxed out on your credit card last year, that impacts on what you can spend on your credit card this year.
“This issue is always forgotten by fans. People have very short memories.
“While they have money coming in from the next instalments of Rice, I suspect they still have a net payable in terms of transfers. That is where my concern is in terms of cash flow.”