#Finances – Under The Hammers

As a West Ham fan I know we will never win the Premier League

Premier League football is no fun anymore with the vast differential in money available leading to predictability.

The Premier League has become a financial juggernaut, but the gap between the top clubs and the rest has stretched to a point where competitiveness feels like an illusion. When a handful of teams can outspend entire leagues it’s no surprise that some of the magic gets lost. Underdog stories become rarer, and the league becomes predictable.

It’s interesting how the same financial might that brings in the world’s best talent and global attention can also erode the soul of the sport for long-time supporters. Loyalty, local identity, and the joy of unexpected triumphs can get drowned out by branding and billion-pound transfer sagas.

As a West Ham fan I know at the beginning of every season that cup competitions are our only opportunity to win trophies. Sometimes I have despaired when we haven’t even seemed to make the effort to try to succeed in those. I have been fortunate to witness successful FA Cup wins in 1964, 1975 and 1980 as well as a couple of European trophies in 1965 and 2023. Not a lot to show for almost 70 years of following the team. A near miss in the 2006 FA Cup Final too, as well as in the 1981 League Cup final when we were possibly one of the best second tier sides that there has ever been. And I’ll never forget our amazing run in the 1975-76 European Cup Winners Cup competition where we lost in the final, but the quarter final and semi final second legs at Upton Park were two of the greatest games I’ve witnessed.

Our best ever league season was of course 1985-86 when we finished third in the old First Division just four points adrift of winners Liverpool after being in contention right up until the final week. We might have even been champions with a better start to that campaign – we only won one of our first seven games and languished in 17^th place at that point. But there is no chance of a repeat of that season 40 years ago. The best we can possibly hope for in the league is to qualify for European competition. So many clubs can qualify now – we have 9 teams from England playing in one or other of the three available competitions next season. I cannot see any way that we can compete for the Premier League title.

So I racked my brains to try to consider what potential reforms could restore competitiveness in top flight football? There are a few that I have often heard floated that could inject some much-needed balance back into football, especially in the Premier League. Several sports have implemented reforms that significantly improved competitiveness, fairness, or sustainability. Here are a few examples:

Salary Caps / Redistribution of Broadcast Revenue: One of the most debated ideas. A ceiling on player wages, like in American sports leagues, could help level the playing field. The National Football League (NFL) in the USA introduced a hard salary cap in 1994, ensuring teams couldn’t spend beyond a set limit on player wages. Combined with equal sharing of TV revenue, this has helped maintain parity—any team can realistically compete for the Super Bowl. The Premier League currently splits TV revenue more evenly than some leagues, but there’s still a disproportionate benefit to finishing higher. A more socialist approach could help smaller clubs grow sustainably. But with global competition and the Premier League’s appeal, enforcing this without causing talent drain would be tricky, and probably impossible.
Competitive Balance Tax: American Basketball (NBA) and also Major League Baseball impose a luxury tax that penalises teams that exceed a spending threshold, redistributing funds to lower-spending teams. It wouldn’t stop spending but might redistribute its impact.
Draft System The NBA and the NFL use a draft system that gives weaker teams first pick of new talent, helping to balance the league.
Tighter Financial Fair Play (FFP) Rules: FFP exists, but surely it lacks teeth. Stronger regulations with real consequences for overspending might rein in runaway budgets. At the moment some clubs spend vast sums on new recruits that the majority of Premier League teams cannot compete with. Not surprisingly this makes the strong teams stronger.
Squad Size & Loan Limits: Big clubs stockpiling talent and loaning out dozens of players distorts competition. Capping squad sizes and loans could force more even distribution of quality players.
Fan Ownership or Influence Models: Inspired by Germany’s 50+1 rule. This rule ensures that club members (usually fans) hold a majority of voting rights, preventing external investors from taking full control. It’s credited with preserving club identity and financial responsibility, even if it limits spending compared to the Premier League.
Formula 1 – Budget Cap (2021): To reduce the dominance of wealthier teams, F1 introduced a cost cap on team operations. It’s already led to closer racing and more unpredictable outcomes, with mid-tier teams occasionally challenging the front-runners.

These reforms weren’t always popular at first, but many have stood the test of time. If football took a page from these examples, it might just rediscover some of its lost unpredictability. Of course, the real challenge is that the very clubs most resistant to reform hold the most sway. Still, the soul of the game relies on the thrill of the unexpected. Unfortunately, Leicester 2016 was a one-off, it won’t happen again.

Adapting successful reforms from other sports to the Premier League probably isn’t possible – but it could be transformative if only it could be achieved. Here’s how some of the systems might be tailored (watered down!) to fit football’s culture and structure:

1. Salary Cap with Flexibility: A hard cap like in the NFL might clash with the global football transfer market, but a soft cap with luxury tax—like the NBA—could work. Wealthier clubs could still spend big, but they’d pay a hefty penalty for doing so. That tax revenue could then be shared with lower-tier clubs or reinvested in grassroots development.

2. Draft-Style Youth Allocation: While a full American-style draft might feel out of place, the Premier League could introduce a mechanism for sharing standout academy talent. For example, smaller clubs might get priority access to players released by top-tier academies or receive compensation tied to playing opportunities they provide young players.

3. 50+1-Style Governance: Replicating Germany’s 50+1 rule might be a tough sell politically and commercially but encouraging greater fan ownership or mandating supporter representation on club boards would help bring accountability and reconnect clubs with local communities.

4. Enhanced Revenue Sharing: The Premier League already shares a portion of broadcast revenue, but tweaking the formula to provide more meaningful support to lower-revenue clubs could make a big difference. For instance, increase the base share for all teams and reduce performance-based bonuses slightly to even things out without removing incentives.

5. Cost Control Through Squad Caps: Clubs could be limited not just by spending but by total squad value or squad size. This would prevent talent hoarding by the biggest clubs and ensure more players get competitive minutes across the league.

6. Centralised Contracting for Young Talent: Adapting the Irish rugby model, the FA or Premier League could centrally contract a pool of national youth or U21 players. These players could be distributed based on developmental needs, ensuring both top-level experience and competitive balance.

Of course, any of these changes would require buy-in from stakeholders—owners, players, fans, and governing bodies. But if the goal is to make football more open, more exciting, and more equitable, there are definitely paths forward. But as I wrote before we are too far down the road and there are too many reasons why it won’t happen.

Clutching at straws I wondered if a handicapping system as in horse racing could be implemented? It’s a fascinating idea, and not as far-fetched as it might sound at first. In horse racing, handicapping works by assigning different weights to horses based on their ability, aiming to equalise their chances of winning. Theoretically, a similar system in football could involve performance-based disadvantages for stronger teams to level the playing field.

Here’s how a football version might look:

Points Handicaps: Start dominant teams with a points deficit at the beginning of the season. It’s radical, but it would certainly shake things up.
Transfer Restrictions: Limit the number or value of incoming transfers for top-performing clubs, effectively “weighing them down” in the market.
Fixture Difficulty Weighting: Adjust scheduling so stronger teams face tougher fixtures earlier or more frequently away from home.
In-Game Constraints: This would be controversial but imagine limiting substitutions or squad depth for top clubs in certain matches.

Of course, the challenge is that football isn’t a closed system like horse racing or American sports leagues. It’s global, with interconnected competitions and massive commercial interests. Any artificial constraint would be seen as undermining meritocracy and would spark legal challenges.

Still, the spirit of handicapping – engineering unpredictability and fairness – is something football desperately needs. Maybe a hybrid model, like enhanced revenue redistribution or dynamic squad caps based on recent success, could capture that essence without breaking the game.

A handicapping-style system in football would be a radical shift from tradition, but if implemented thoughtfully, it could offer several compelling benefits—particularly for restoring competitive balance and reinvigorating fan engagement. Here’s how:

1. Increased Unpredictability: By design, handicapping would reduce the advantage of dominant clubs, making outcomes less predictable. That unpredictability is what keeps fans glued to their seats—think of the buzz around surprise title runs like Leicester’s in 2016.

2. Renewed Relevance for Mid-Table Clubs: Clubs outside the elite would feel they have a genuine shot at silverware or European qualification. That alone could re-energise fanbases, attract better players to smaller clubs, and create a more dynamic league overall.

3. Rewarding Long-Term Planning Over Just Spending Power: If the system penalises consistent overperformance or overspending, clubs would need to be smarter focusing on scouting, youth development, coaching, and chemistry rather than just flexing financial muscle.

4. Boosted Viewer Interest: Global audiences tune in for drama and storylines. A more level playing field would mean more meaningful matches and tighter title races, which boosts engagement, TV ratings, and revenue for everyone.

5. Revived Romanticism of the Game: Football has always been about hope – the belief that any club can dream big. A handicapping system could help restore that spirit, making football less like a billionaire’s playground and more like a battleground of passion and grit.

Of course, implementing it fairly would be a tall order—defining the metrics, avoiding legal challenges, and maintaining meritocracy. But philosophically? It taps into something a lot of fans yearn for: the feeling that anything is possible again.

If only some of these ideas were adopted in a small way it might help, but has it gone too far now? There’s a sense among many fans, including me, that football’s drift into a money-dominated spectacle has passed the point of no return. The financial stakes are so enormous, and the power so concentrated at the top, that even small reforms feel like drops in an ocean of imbalance.

But I wouldn’t say it’s too far gone – almost but not totally, not yet. Could small changes still be possible? Football still has its grassroots, its local heroes, and a global fan base that genuinely cares about the integrity of the sport. If enough pressure comes from fans, regulators, and smaller clubs, meaningful changes could still happen. It might not be a revolution, but even incremental changes like stronger FFP enforcement or better revenue sharing can start nudging things in the right direction.

If it has really gone too far now (and if I’m honest with myself it probably has) then it speaks volumes about how disconnected the upper echelons of football have become from the people who helped build it: the fans. When billion-pound ownerships and corporate interests dictate the rhythm of the game, it’s easy to feel like voices from the stands are just background noise.

But even small ripples can make waves. The fan protests that helped derail the European Super League weren’t backed by billions—they were powered by sheer passion and public pressure. The 50+1 conversations in the UK? Sparked by fans. Even safe standing and more equitable ticket pricing have gained traction in some clubs thanks to persistent grassroots lobbying. Maybe it won’t flip the pyramid overnight, but change doesn’t always need to be seismic.

As well as supporting West Ham in the Premier League I like to watch lower league and youth football, The Premier League has the best players of course but the excitement is missing because of the predictability. There’s something raw and beautifully human about lower league and youth football—where matches aren’t drowned in glitz, but crackle with real tension, local pride, and moments of unexpected brilliance. It’s football in its purest form, unfiltered by billionaire ownership or endless VAR delays. Unpredictability is the heartbeat of sport. The feeling that anything can happen. When it’s missing, even the most technically flawless performance can feel sterile.

There’s magic in seeing a teenager curl one top corner for the Under 15s or watching a non-league side grind out a win in front of 500 fans who know every chant by heart. No fireworks show required—just graft, heart, and the echo of hope in every tackle. – it’s football with soul. You’re watching young players develop before your eyes, where every pass and goal actually means something deeply personal to the community. It’s not about megastars or multi-million-pound sponsors—it’s about belonging. That feeling when a small crowd roars like it’s 60,000 strong, or when a player claps every hand on the touchline because those faces actually mean something. That’s football at its most human.

The Premier League may have the flash, but lower league and youth football feels more authentic, more grounded. There’s no corporate gloss just muddy boots, raw talent, and a crowd that claps for effort as much as for goals. I have been rediscovering the joy of football not in superstars, but in the passion of a local lad sprinting down the wing in the rain, or a promotion campaign that means everything.

And yet even now as I reflect on this article I still get a buzz in anticipation of the new football season that is approaching. I still want to see West Ham really performing well at the top level. I still read the ridiculous articles every day that suggest we are going to buy x/y/z and laugh to myself. I enjoy the summer sport, the cricket, especially the test matches, the Open, Wimbledon, horse racing on the flat, and this year the Women’s Euros. But nothing beats watching football at all levels. And despite the predictability of the Premier League I’ll still be hoping for a successful season for West Ham just as I have every year since 1958. But one thing is for sure. We won’t be challenging to win the Premier League. I’m afraid we won’t even come close.

Counting And Spilling The Beans On West Ham United’s Finances

Here we go! The silly season of transfer bids, player wages, contract lengths, amortisation and PSR breeches is upon us. How does this leave West Ham’s Finances. Strong and stable, or in a mess?

The once simple beautiful game has mutated into a strange and complicated beast for its followers in recent years. A plague of over analysis, statistical overload, tactical complexities, formation paralysis, and eccentric rule interpretations requires fans to understand double pivots, false 9s, low blocks, high presses, inverted wingers, box-to-box midfields and whether a player was entitled to go down. But making matters even worse is the need to be a financial wizard, understanding concepts such as profit and sustainability rules, associated party transactions, player amortisation, shareholder loans and squad cost ratios.

As we enter the summer madness of the transfer window, we take a look at the current state of West Ham’s finances and how they compare with selected other clubs.

Revenues – Where Does The Money Come From?

Despite being ranked as a top twenty club in the 2024 world football rich list – a status they will struggle to retain in 2025 in the absence of European competition – a massive gulf remains between West Ham’s income and the ‘rich 6’ of English football. Clubs such as Liverpool and Arsenal are able to generate revenues 2.7 times larger than those currently earned by the Hammers. The gap is impossible to narrow for any club lacking regular Champions League participation; or the financial muscle and ambition to challenge for it.

Broadcasting revenues (the central distribution of funds from the Premier League and UEFA for TV rights and prize money) continue to dominate at West Ham where they account for 60% of all income received. Comparable metrics for Liverpool and Arsenal are 33% and 43% respectively, illustrating how the bigger clubs use their global appeal to drive Matchday and Commercial revenues that dwarf those achieved at the London Stadium.

Although West Ham can boast the second largest matchday attendance in the Premier League, they drop to eighth in terms of matchday revenues, even in a season that saw a creditable Europa League campaign. Average revenue per fan is on a par with Fulham and Brentford, and behind the rich six, Newcastle and Brighton. The move to the London Stadium has not proven to be the money spinner promised and attempts at squeezing more from those attending, removing concessions, or attracting a greater proportion of higher spending casual visitors (tourists) have met with understandable resistance.

Commercial revenues have seen incremental growth through additional or improved sponsorship deals, pre-season tours and retail merchandising, but with a slower rate of growth than broadcasting. However, certain income streams, such as naming rights, food and beverage sales and income from the staging of non-football events, are not available due to the stadium ownership. This is a flip side to Brady’s much heralded ‘deal of the century’ in securing a low rent 99-year lease.

Expenses – Where Is The Money Spent?

The principal, and most high-profile, expenses at a football club are those related to player wages and transfer fees. While wages have increased significantly at West Ham over the years, they rank 9^th in the league overall for staff costs (wages plus player amortisation). Unsurprisingly, these are way below the ‘rich’ clubs but they have also fallen further behind Newcastle and Villa as they pursue their Champions League ambitions. In total staff costs represented 91% of revenues in 2023/24.

To avoid confusion, it is worth taking a moment to consider how transfer fees are accounted for in profit and loss statements. Suppose a player is purchased for £50m on a 5-year contract. The £50m cost will be amortised in the accounts over 5 years at £10m per year, not as a lump sum. This is independent of how the transfer fees is actually paid in practise. For example, the whole fee up front or against a schedule of instalments.

Brighton provides an interesting comparison here. While their wage bill is not far behind those at West Ham, amortisation is significantly lower. A reflection of their strategy of unearthing emerging talent at a lower cost than the lazier West Ham obsession with experience and/ or recruiting players recommended by agents.

With many of the operating expenses at the London Stadium paid for by the stadium owners, other expenses at West Ham are relatively modest. Not owning the stadium possibly also contributes to the club being in the rare position of having no financial debt. They do, however, owe significant amounts in future transfer instalments which we will return to later.

Transfers and Player Amortisation

If there are limited options for West Ham to achieve a significant increase in matchday and commercial revenues – and become less dependent of broadcasting income – then surely, they must pay more attention to generating player trading profits. For reasons best known to the owners, the club has chosen to ignore the model of buying low and selling high pioneered by the likes of Brighton. The policy of recruiting older, already established players and selling later resulted in an average annual player sale profit of just £15.4m in the nine years from 2014-23. A figure that was below the league median in seven of those nine years.

Indeed, it is rare for clubs to achieve operating profits. Most rely heavily on profits from player sales to comply with the Profitability and Sustainability Rules (PSR). West Ham’s poor record on player sales – the direct result of a transfer policy prioritising experienced, older players – has been a consistent drag on the club’s progress.

The reason the sale of Declan Rice was such a massive bonus for West Ham’s accounts is that, as an academy product, he had no ‘book value’. The entire sale proceeds could be shown as pure profit. Just as Rice’s contribution papered over the cracks on the pitch during his last season, his sale may have done the same for the club’s finances. The record profits in 2023/24 were almost entirely down to the one-off sale of a single player.

The financial implications of selling a player who had previously been purchased is not so clear cut. Consider the following example of a player bought two years ago on a five-year contract for £50m.

After the completion of two years, the player has a book value of £30m. If he has been a success and can be sold for £75m then great, a profit of £45m can be shown in the accounts. Conversely (and the more usual West Ham scenario) if the transfer has not worked out and he is sold for less than book value then the negative difference must be recorded as a loss. Thus, selling Gianluca Scamacca and Nikola Vlasic may have brought in some much-needed cash but did not generate any profit, as their transfer fees were aligned with current book values.

PSR and All That

The Athletic recently published a club-by-club table of Premier League PSR positions over the latest three-year period. Although interesting in that it confirmed West Ham did not have an immediate PSR problem (as many suspected), it was also a largely irrelevant rearview mirror exercise given the club’s financial year had already closed on 31 May. Whatever transactions take place this summer will become part of the 2025/26 accounts and factored into the three-year PSR period 2023/24 to 2025/26.

In calculating PSR limits, certain allowable costs (depreciation, woman’s football, youth and community development) are added back in to the profit and loss totals. For West Ham this is estimated at approximately £14m per year. Thus, for PSR purposes, West Ham’s 2023/24 profit would increase to £71m and allow for equivalent losses of up to £170+m in the two subsequent seasons without falling foul of the rules. Beyond that timeframe (once the Rice transfer drops out of the equation), the PSR outlook (assuming it remains) looks bleak unless the club significantly ramps up revenues or increases profits on player sales on a regular basis.

The caveat to the above is that clubs can only lose £15m of their own moneyacross a three-year PSR period. Anything above that, and up to the £105m threshold, must be guaranteed by owners providing ‘secure funding’. According to The Athletic report, the most recent capital injection at West Ham has expired for the purpose of PSR calculation. If the Board (combined wealth £8 billion) do not address this, future PSR consequences would look very serious indeed.

Where Has All The Cash Flow Gone?

When David Sullivan presented the 2023/24 accounts he gushed “It fills me with immense pride, as a steward of this illustrious club, to see West Ham United on solid financial ground, with all profits reinvested into our squad, infrastructure, and local community, providing a strong basis for our ongoing progress and long-term objectives”.

If we are to believe that is true, then why are we now hearing noise about the finances being in a mess? Or that players must be sold before signings can be made? And what exactly are the Board’s long-term objectives?

There is clearly a problem with cash flow that is beyond the hysterical headlines on the usual clickbait sites. There is nothing sinister about the club resorting to receivables finance or revolving credit facilities. They are standard business practices which I’m sure other clubs must also use.

A standout statistic from West Ham finances is that they are among the leaders for transfer fees owed, with a staggering £191m outstanding when the 2023/24 accounts were published. The equivalent figures available for selected other clubs are Brighton £104m, Newcastle £160m, Arsenal £268m and Liverpool £128. In part this will reflect the Hammers activity in the transfer market but may also be the result of holding out for extended payment terms – a kicking the can down the road tactic that anecdotally scuppers many a West Ham deal at the last minute.

And here lies the conundrum. On the face of it, West Ham accounts have shown strong operating cash flows in recent seasons, and the club have successfully cleared all outstanding debts. In a normal business it would be an enviable position; but football is an abnormal business. Clubs are not owned for annual profits but for reasons of prestige, ego, and asset accumulation. In 2007, Forbes valued West Ham at £195m. Last May that had increased to £882. An increase achieved with limited shareholder funding beyond the issue of £125m in shares in 2022/23, much of which was used to reduce debt.

This has left a net funding/ investment in the past 5 years of just £54m, compared to £496m at Villa and £391m at Newcastle. It feels like an act of self-harm if the owners decline to make further investment now both to ease PSR pressures and to assemble a squad capable of competing at the right end of the table. This brings us back to the question of long-term objectives. Does this go any deeper than preserving Premier League status (and hence asset value) as a plodding mid-table team?

What is apparent is that caution gets the better of ambition in the West Ham boardroom. No-one wants a reckless club owner, but some risks are worth taking where the rewards are high. Sound financial management is fine, but a clubs ultimate success lives or dies on its player and management recruitment. As the overall steward of West Ham’s recruitment, I’m not sure whether Sullivan should be ashamed or embarrassed by his record – probably both! Is there any chance of it ever changing? COYI!