Tin Pot FC Part Two: Cash Rules Everything Around Me
As reported in The Guardian, the most recent available set of accounts for Premier League clubs shows us has having the 7th highest annual turnover (£142m) and the 8th highest wage bill (£85m). Our gate receipts for the last season at the Boleyn produced £27m, while our commercial activities weighed in at just under £20m.
The gap between the top 6 and the rest of the league is as much a result of finances as it is a result of footballing quality (and obviously the two are linked). For context, Spurs have the 6th highest wage bill at roughly £100m and have the 6th highest turnover at £210m (or 150% of our turnover). Tottenham brought in £41m from people going to White Hart Lane and £59m from their commercial endeavours, a staggering three times more than West Ham’s. This disparity is highlighted by the difference in money generated by shirt sponsorship deals:
The 2015/16 numbers alone suggest that we should really have established ourselves at the top of that 8th-and-below portion of the table. As Soccernomics outlined, spending on wages is one of the most reliable indicators of league positioning. At the very least, our underperformance in relation to our wage bill suggests that perhaps that money isn’t being spent as efficiently as it could be.
Of course, that data comes from before the move to Stratford. The capacity of the London Stadium is nearly twice that of the Boleyn ground, so you’d expect matchday income to increase commensurately to least match Tottenham’s £41m annually. If the club get the go ahead to expand to 66,000 seats, then the club should, in theory, surpass Tottenham, Everton, Chelsea and Liverpool in gate receipts, at least in the short term.
As an aside, it’s perhaps a bit unfortunate that the move occurred at a point where income derived from tickets is no longer as significant to the overall wealth of a club. The money from the new broadcasting deals dwarfs the money made from match-going fans, so doubling the capacity of your ground isn’t the game changer it was for, say, Arsenal when they moved from Highbury to the Emirates.
Even with the extra Stratford money, West Ham still have a long way to go to claw back Spurs etc on the commercial front. With the money from the broadcast deals being distributed fairly equitably (obviously Champions League clubs gain extra from their involvement in that competition), and the top clubs all having roughly similarly sized stadia, the main differentiator between the top clubs and the rest going forward is going to be how much cash they make from sponsorship and other commercial activities. People take the piss out of Ed Woodward for securing United an official mattress partnership, but it’s exactly that sort of nonsense that helps make them the financial juggernaut that they are.
And it’s here that we’re lagging seriously behind, and it’s no surprise that Brady et al were constantly ramming home the need to turn West Ham into a “global brand” as the justification for the change in the badge before the move last season, and why the club have been dipping their toes into the eSports game.
The bigger ground will help with this. Filling a 60k+ seater stadium every other week provides a lot of eyeballs for potential sponsors and is evidence of the reach that West Ham potentially offer to prospective advertisers. It’s a bit worrying that the club has struggled to secure a naming rights deal for the ground, but that’s perhaps not high on the board’s list of priorities as a large chunk of anything earned for that goes back to the LLDC anyway. If you wanted to be ultra-cynical, you could even suggest that the signing of Javier Hernández was commercially motivated. Chicharito has an enormous following in Mexico (including over 8 million followers on Twitter) and West Ham’s newly formed Spanish-language Twitter account accrued nearly 20,00 followers in the 12 hours after the Hernández signing was announced. Needless to say, for any company looking to reach the Mexican market, West Ham are suddenly significantly more attractive given the number of eyeballs they’re going to have on their games next season.
Despite all of that, it feels a bit like we’re marooned in the 8th-and-below segment of the table (at best) and, outside of a fortuitous set of circumstances or considerable outside investment, the best we can hope to achieve is to slowly try to close the financial and footballing gap to the top 6 by progressively chipping away at them. In the mean time, the best we can really hope for is to be kings of the also-rans. Which is fine, but there are better, more exciting ways to do that than positioning ourselves as place for players to pick up their last big payday.
(contined in part three).
