Let’s Talk About Money

The conundrum of stadium, money, tradition and success.

MoneyDo you ever stop to consider why you support a football club? What is it that makes you want to invest so much time, money and emotion into the fortunes of a particular team? What do you get or want out of it in return?

Of course there is no simple answer as everyone has their own story and perspective. Originally it would have been about creating bonds and a sense of community; families, friends, territories and rivalries. Perhaps this still exists in the lower leagues at places such as Rochdale or Hartlepool (who I understand to be the most unsuccessful teams in history) but it has become less relevant at the top level; particularly in the Premier League where money and success rule. The dilemma for a team such as West Ham (or more importantly its supporters) is what constitutes success and what are you prepared to sacrifice to secure it?

It is no surprise to anyone that there is a strong correlation between how much money is available to a club and the level of success on the pitch; if we measure success by league position or trophies won. The move to the London Stadium was, no doubt, seen by the owners as an opportunity for the club to progress financially, to keep Tottenham off our patch and to increase the value of their investment. I don’t want to get involved in the merits or otherwise of the new stadium and we have to accept that there is no going back; like it or not we should concentrate on making the most of what we now have.  We are now in the London Stadium; where can it take us?

“The clubs who have better financial resources have the better teams”

– A Wenger

Based on the financial accounts for 2014/15 West Ham were the 20th biggest club in Europe (in terms of revenue) and the 9th biggest in the UK.  We were one of a cluster of English clubs with reasonably similar levels of revenue comprising Newcastle, Everton, West Ham, Aston Villa and Southampton. Manchester United are way ahead of everyone else followed by a closely grouped Manchester City, Arsenal, Chelsea and Liverpool. There is then a gap to Tottenham before a further gap to our own group.

As Tottenham is the nearest financial target in our sights if we are to improve our relative position then I use them for comparison purposes only. In 2014/15 Tottenham had revenues of £196m compared to West Ham’s £122m. With a similar sized stadium they were able to generate more than us in Matchday (£41m/ £20m), TV (£95m/ £79m) and Commercial (£59m/ £24m) revenues. TV contributed 65% of West Ham’s revenue compared to Tottenham’s 49%.

The larger stadium will certainly generate incremental Matchday cash but it is difficult to see the direct impact that it will have on TV or Commercial activity; as these are more a function of team success and wider, higher profile. For the sponsors involved with football the attraction of Premier League clubs is the worldwide appeal of the major teams participating and this an area where both West Ham and Tottenham suffer in comparison with the (so-called) big 5 clubs. (In fact I ave not seen any significant major overseas profile for Manchester City yet but they can at least rely on the UAE for hefty sponsorship deals). Tottenham fare better than us with commercial sponsorship due to their longer and more regular involvement in European competition but they are still some way behind the others. It would be rare in Asia, for instance, to see locals wearing Tottenham or West Ham shirts and that is why our sponsors have tended to be local rather than international businesses. Breaking into that club and attracting overseas support is a major challenge for any new team.

So where does that leave us? Potentially with improved financial security and topping the also-rans-financial league I mentioned above, but with a mountain to climb if we want to see a sustainable step change in status. Over the last 4 years West Ham have been the 5th largest net transfer spenders (notable for our lack of large transfers out) and although this has brought relative improvement we remain firmly part of that mid-table pack. A realistic view is that it would appear virtually impossible to grow organically into a truly big club; only significant external investment can make that difference. Otherwise the future is the same mid-ranking club but in a much larger stadium.

And that brings us back to the original questions. What does success look like and how badly do we want it? Surely it should be better than 4 cups in 50 years but are we prepared to give up the remaining sense of community, tradition and what it means to be a Hammer in order to achieve it?

Source: Financial information taken from the excellent Swiss Ramble blog.