West Ham United cash-in on Europe in 2021-22

WEST HAM UNITED are rapidly emerging as “the seventh club” in the Premier League even if their performances in 2022-23 suggest they have lost some of the momentum of the past two years. The club has released its financial statements for 2021-22 and their total revenues place them just behind the so-called “big six”. As one of the best supported clubs in the Premier League, West Ham are now reaping the benefits of their new stadium in Stratford, along with greater stability from the continued employment of coach David Moyes.

West Ham generated record income of £ 253 million in 2021-22, a 31% increase on the previous campaign. This was boosted by the club’s run to the UEFA Europa League semi-final, which influenced all major revenue streams. The Hammers lost to eventual winners Eintracht Frankfurt in the last four after beating Lyon and Sevilla in the knockout stages of the competition. They finished seventh in the Premier League and had to settle for Conference League football in 2022-23, although they must be among the favourites for the trophy. 

West Ham’s matchday income reached a new high in 2021-22, totalling £ 41 million after the covid-impacted 2020-21 when earnings were just £ 1 million. Broadcasting revenues were also up slightly to £ 164 million and commercial income was rose from £ 29 million to £ 48 million.

The club made a pre-tax profit of £ 12.3 million, which should provide welcome relief after three consecutive years of loss-making in which the Hammers lost a combined amount of over £ 100 million. In 2020-21, West Ham lost £ 27 million before tax.

Unsurprisingly, West Ham’s wage bill went up in 2021-22 by more than 5% to £ 136 million, equalling the amount paid in 2018-19. With overall earnings in the ascendancy, the wage-to-income ratio was 54% compared to 67% in 2020-21 and 91% in 2019-20. The average weekly wage at the club was £ 63,066.

In the transfer market, West Ham upped their game slightly although their total spend of £ 64 million was still way below the £ 100 million-plus figures of 2018-19 and 2019-20. Their biggest deals were the £ 33.5 million paid for CSKA Moscow’s Nikola Vlašić and the £ 29.8 million tabled for Chelsea’s Kurt Zouma. West Ham still owe money to two Russian clubs, but because of the war in Ukraine, they are unable to settle their account.

Over the past five seasons (including 2022-23), West Ham have been the fourth highest net spenders in the Premier League, their outlay of € 395 million (source: Transfermarkt) higher than Manchester City (€ 242m), Liverpool (€ 287m) and Tottenham (€ 368 million).

In 2021, West Ham had net debt of £ 89 million, but the situation has swung dramatically by £ 130 million and the club now has net assets of £ 40 million including £ 95 million of cash. The club benefitted from £ 125 million of new equity which has been used to pay down debt, including £ 53.5 million in shareholder loans and a portion of the loan owed to MSD, the Dell family office. This was possible due to the introduction of Czech businessman David Kretinsky, who became joint chairman with David Gold and David Sullivan after initially acquiring 20% of WH Holding and then a further 7% from other board members.

West Ham claim that 2021-22 – a second successive top seven finish in the top flight for the first time – was one of the most successful in the club’s history. The mood is certainly different at the London Stadium, with 95% of season ticket holders renewing for 2022-23 and crowds a very healthy 60,000 in the current season. The Hammers also have one of English football’s most coveted players in Declan Rice, an established member of the national team.

The outlook is quite positive for West Ham, but relegation would be a setback to their ambitions – they are currently too close to the bottom for comfort. Given their support and geography, there is scope for the Hammers to become more profitable, but much depends on securing regular European football. They have the taste for it at the moment, but the priority in 2023 will surely be to ensure they do not slip out of the Premier League.

Hammers cut their losses and manage the pandemic in 2020-21

WEST HAM United certainly missed their fans in 2020-21 as they played almost the entire season’s home games in a near-deserted London Stadium. West Ham’s income from matchday slumped by 98% to a mere half a million pounds. Aside from that expected drama, they still managed to record a rise in revenues, a 38% increase to £ 192.7 million and also reduced their pre-tax losses by 59% to £ 26.9 million.

On the field of play, the 2020-21 campaign was a satisfying one for West Ham, a final placing of sixth and qualification for the UEFA Europa League. The momentum under David Moyes has more or less continued into 2021-22.

West Ham’s revenues are close to breaking the £ 200 million mark which would be a landmark in itself, but also underlines how far away they still are from the elite half dozen in the Premier. In normal times, the Hammers could reasonably anticipate matchday income heading north towards £ 30 million and commercial activity rising above £ 35 million. However, these revenues streams both fell in 2020-21, predictably compromised by the pandemic.

The salvation for West Ham’s financial performance was broadcasting, which increased by 97% to £ 163.1 million and reached a record high in the process. The return of European football should boost the club’s earnings from TV/Media significantly, especially if they remain in the top six of the Premier League.

But the current climate appears to have limited West Ham’s transfer market activity. After two seasons of spending over £ 100 million, their expenditure dropped by 50% to £ 54 million but at the same time, they received £ 57 million from sales. Their net balance was a positive £ 3 million, the first time in a decade that they have not been net spenders. Their biggest signing of the season was Brentford’s Saïd Benrahma, who cost £ 25 million (plus add-ons) when he made his loan period permanent in January 2021. Other major acquisitions included the impressive Czech duo Tomáš Souček and Vladimír Coufal, who both arrived from Slavia Prague, costing a total of £ 20 million.

Despite the loss for the year, West Ham’s wage bill still increased by 1.6% to £ 129.4 million. The club’s salaries have trebled over the course of the decade, but they now represent 67% of income compared to 91% in 2019-20. According to leading football academic Kieran Maguire, the average wage at West Ham is currently £ 60,149 per week. 

The gross squad cost is calculated to be £259 million by Maguire, while Transfermarkt currently value West Ham’s playing resources at £ 316 million in the market, with England midfielder Declan Rice valued at £ 67.6 million. According to CIES Football Observatory, West Ham have one of the oldest squads in the Premier League with an average age of over 28. Player trading remains important to the Hammers’ business model and in 2020-21, they made a profit on sales of £ 17.6 million, around 29% lower than the previous season.

West Ham have made a number of strategic moves to counter the economic impact of covid-19. As well as the agreement of players and officials to defer wages, the club launched a £ 30 million rights issue in July 2020 and has also taken a £ 120 million term loan facility from MSD Holdings, the financial arm of the Dell family, of which they have so far drawn £ 55 million. Speculation over the interest rate being charged by MSD has been fuelled over the public knowledge that Southampton were paying 9.14% on a loan from the company. West Ham also have overdraft facilities with Barclays. The club’s net debt reduced from £ 105 million in 2019-20 to £ 89.5 million.

With the fans back in the stadium – hopefully, a situation that will continue in the weeks and months ahead – and a prolonged European run, West Ham’s financial situation should improve in 2021-22. They have already made more than £ 20 million from the Europa League group stage, if they continue to focus firmly on the competition, that figure will continue to rise. And with no silverware in more than 40 years, West Ham are certainly due some real success.