West Ham United have warned of the “serious and severe” financial consequences if they are relegated from the Premier League this season after announcing a loss of £104.2million.
The east London club said their biggest loss since returning to the top flight in 2012 was a result of player trading, poor performance and not having European football.
West Ham’s wage bill increased from £161million to £176million for the financial year ending in May and their wages-to-turnover ratio rose to 77 per cent. They also owe £195million in transfer fees to other clubs in next three years.
After earning 25 points from 27 games, the club faces their first relegation since 2011
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It reflects the higher salaries paid to attract players such as Max Kilman, Niclas Füllkrug, Aaron Wan-Bissaka and Jean-Clair Todibo after Julen Lopetegui’s appointment as head coach at the start of last season. Lopetegui was replaced by Graham Potter in January last year before Nuno Espírito Santo took charge in September.
West Ham are two points from safety and play away against Liverpool on Saturday.
Their revenue well by 16 per cent and their wages increased by 9 per cent.
“The group’s principal business risk remains that of the men’s football club being relegated from the Premier League with the serious financial consequences which follow,” the accounts read. “The club continues to comply with Financial Fair Play rules and expects to do so in the future as the new Squad Cost Ratio rules are introduced in the forthcoming years.”
Premier League clubs face financial turbulence
If relegated to the Championship, West Ham would expect to sell several players, including Jarrod Bowen, Todibo, Crysencio Summerville, Kilman, Mateus Fernandes and Alphonse Areola. In addition, the owners may need to put in money as they did after relegation in 2010-11.
The club’s annual report revealed that the highest-paid director — assumed to be Baroness Brady, the vice-chairwoman — was paid £1.47million, an increase of £35,000.
Turnover fell from £269million to £228million due to lower income from broadcasting, match days and retail. Commercial income rose from £41.9million to £42.2million.
Big-money signings under Lopetegui have contributed to £195million of unpaid transfer fees
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West Ham paid almost £22million in interest payments. The club also took out a £124million loan facility for a five-year duration and has drawn down £89million.
The club have been in talks with investors wanting to buy David Gold’s 25 per cent stake, controlled by his descendants. However, the problem remains that any new investor would not have control of the club without buying shares from David Sullivan, the co-owner who owns 39 per cent, or the Czech billionaire Daniel Kretinsky, who bought a 27 per cent share for about £150million in 2021.
Some of the potential investors have a tech background, which could appeal to supporters who have called for better scouting and the use of the type of analytics employed by other clubs.