Written by @StevenMcCarthy9
I find myself as dismayed and disappointed, as many of you do with the start of our season and the end of the transfer window. This won’t be another board out article nor will it be one where I am “up the owners arse!” as I was so eloquently accused of being the other day. What it will be is a totally unbiased and neutral view of finances under their owners at this point. This week I think I have finally grasped just how much damage the high expectations set by our owners have caused. I’ll also focus upon exactly how they are attempting to try and compete with the resources they have. How I believe that they simply cannot do, compete without outside investment, so buckle up, this is a long one.
Before I am accused of making excuses and being on the owners side, I will give my personal opinion on the investment into the club: I personally feel in the past 2 summer windows, we were tricked into believing the owners would spend big on a 20+ goal a season striker and the “top talents” around Europe. That in the end we have payed the price for looking at cheap deals on potential or ageing players and quantity of players brought in, rather than looking to wisely spend on quality. However when you take a step back, what we did was pay high wages, high agent and signing on fees whilst writing large appearance fees to a number of under par players! So we did in fact spend, we just did so in different ways, paying a certain Algerian a few million in a signing fee and big 70,000 a week wages (before various bonus fees). I cannot and will not defend that, because whilst you can sign players “cheaply” in the modern game due to contract lengths and in Hernandez’s case a release clause. I think we should have really dug deeper and been willing to spend more, because in my opinion in terms of league finishes, TV rights and potential European competitions, it would have more than paid itself back.
A perfect example of this is the Carvalho debacle, we have all heard the basics by now and we all know that despite a player, who is generally very highly regarded having a release clause many saw as low, we refused to meet said price.
We wanted to pay a rumoured 8million euros upfront and the rest on an instalment and clause basis. Which club would accept that for their star players? I know we certainly fought hard to keep Payet and subsequently tried hard to achieve 25 Million. In my opinion, we simply took the mick. We low balled and relied on the hope that Club Sporting would rather sell than pay Carvalho a loyalty bonus of 5million Euros and in the end, we got strong armed and firmly f’d…with the use of our own well publicised sex toy.
But now I’ve swerved any hint of board loving, this window in particular, we felt the vast resources of numerous Premier League clubs do nothing short of eclipse us in terms of spending! Some were expected in the forms of Manchester City and United, Liverpool and Chelsea, however I keep hearing the same and ultimately un-researched angry shouts about the likes of Everton, West Brom and Leicester outspending us as a lack of ambition, this is simply not the case. I hate seeing teams around us grow over us just as much as any other fan! We should be looking to finish above and around teams like Everton and West Brom. I believe had we spent wisely last summer, and further added to this year with the players brought in, this challenge would be something the fans would not even be questioning. However, let’s take a look at precisely why it is: Why have we been left behind in terms of spending by these clubs? The long and short of it is outside investors or outright ownership in the case of clubs like Everton, Leicester, West Brom and Bournemouth.
First up, that team I always see popping up on my twitter feed with fans baying for each other’s blood!
Everton spent big after the £90million sale of their most coveted asset in Lukaku! However the spending we have seen from them was done so with the sale and added riches of a new owner and the money he brought to the club as the biggest factors. Farhad Moshiri is said to be worth twice the total of Gold and Sullivan combined at an estimated figure of over £3billion! Moshiri is a well known character to anyone following the football money men as his ties to an eager to spend and unhappy board member at Arsenal, in the form of Alisher Usmanov are clear. Now whilst the Arsenal man has publicly stated he isn’t a part of the Everton takeover, his investment company USM, which possesses vast holdings in Russian mining and metals, and digital corporations has pumped money into Everton by sponsoring its Training ground…yes. A deal rumoured to be worth £30million over 5 years…for a training ground sponsorship! If we want to go into the realm of gossip, it is rumoured that Usmanov is said to be so unhappy at Arsenal’s fall from grace that he is considering selling his shares completely and buying into Everton. Usmanov is worth an estimated 15 Billion Dollars…a figure almost 10 times that of Gold and Sullivan combined. I am not stating we should not be ambitious and spend, but when being realistic about it, in terms of finance I think that even removing the rumour of personal investment from Usmanov we cannot compete financially with Everton when you view the sponsorship and future developments they have planned. This is a club who are looking to achieve a similar goal stated by our owners, to compete for top 4 eventually, they are not setting there sights on the League yet, but a trophy and strong finish. One thing Everton are doing very differently (and I will add, that in my opinion they are doing properly) is building their own stadium at the Bramley Moore dock with a proposed capacity of 55,000.
The city council have already agreed to the proposed deal and hinted at financial aid in the project, this allows Everton a greater budget toward the transfer funds and player wages they already have. However this new investment and now secure plan for growth and future increase in gate money has also allowed Everton the chance to sustainably offer the same large wages we at West Ham were able to give through our ticket sales, marketing and overall turnover.
Take for example Wayne Rooney, Sandro Ramirez and Davy Klaassen who are all supposedly on over 100,000 a week. Yannick Bolasie on 80,000 and both Michael Keane and Jordan Pickford on 90,000 a week. The overall Everton wage structure is now growing beyond ours. At the moment, we have Hernandez, Arnautovic and Hart are all on high wages at our club, said to be over 100,000 a week. Why is it that Everton can offer this? Well Moshiri instantly cleared Everton’s debt with a loan, giving them a much stronger base upon which to develop the above plans.
In our case we were well and truly in the midst of a potential financial meltdown before G&S were involved, something that was only made worse by our impending relegation. From there on, it was an uphill climb for the owners to settle our debts and make us an attractive proposition for lucrative investment from sponsors, based on anything other than club history. It was only by securing the high capacity of the London Stadium that we are able to sustainably give multiple players high wage contracts. Hernandez is on 140,000 a week before bonuses, this is a figure that had we remained at The Boleyn we would more than likely have only been able to offer to 1 player. However now we are seeing the likes of Lanzini and Antonio being touted as high earners onto of the Hart and Arnie contracts mentioned previously, with the club having the ability to offer far higher wages across a squad than we have ever had at the club.
West Brom and Bournemouth are interesting points of debate and the main reasons for me writing this long article.
Both have been the beneficiaries of outside investment and whilst the full scale of the Chinese investors finances is not entirely clear, I was able to find that Lai Guochuan, the outright owner of West Brom is said to in the latest “conservative” estimate I could find online for his net worth be around 2.8Billion GBP! And that is without the backing of his Chinese investment group. They however have no known plans to develop a stadium and will be relying solely on owner wealth and marketing turnover from now on. And the aforementioned Bournemouth now have the considerable finance of 25% steak holder in the form of US based investment group Peak6. Going off figures online I found with a simple google, this company is worth almost $12.2Billion. Bournemouth also show plans of future stadium development and with that in mind they have been able to buy big in terms of both funds and wages.
What we do have in favour of us though, is our position in terms of overall revenue. As of July 17th we are placed at 15th by Forbes in terms of the Worlds Richest Clubs, but this creates a notion that I think is dangerous for fans.
It is giving us purely the amount of money generated by the club alone during a financial year and it’s judged value by way of assets and marketing power. We are marketed at a value of 634million dollars, with a revenue of $213million. This is were our budgets are made under Gold and Sullivan, we take out loans based upon our value and ability past and present to pay those loans.
The more money we make, the more money we can spend, However what we cannot do financially is compete with the mentioned Billionaires above. To put this into context, Gold and Sullivan are said to be worth around 1.4Billion GBP combined. We are simply unable to compete on a larger scale with clubs who have such investment available.
I want to say thank you for reading the article if you made it this far! I believe that with wise spending we can easily cement a top 10 place for years to come, however we cannot hope to compete at a top level on anything other than a freak like Leicester season if we cannot find investment for the owners due to the mind boggling numbers we are seeing spent these days The news that American Billionaire J.Albert “Tripp” Smith has purchased a 10% stake in our club is fantastic! Personal Wealth estimates and figures were hard to find on this man, as the sale was done through him alone and unlike Bournemouth, there is seemingly no group behind him. What I did manage to find was that he had sold his company GSO Capital Partners for a cool $1billion (Dr.Evil stance). Purchasing a 10% stake in our club does mean we can have the added deep pockets of Mr.Smith behind us, but also means that Gold and Sullivan remain in majority control. Which regardless of your views on their ownership does mean that we are experienced and dare I say, steady hands when it comes to the running of our football club.
But before I finish this article, I believe that the best way for us to really make up for a lack of spending this Summer is to make the London Stadium a place players from the opposition hate to come! And I hope this season we can replicate the electric atmospheres we witnessed against Spurs and even West Brom last year.
Thank you Ex and all @TheWestHamWay should they post this, I’m @StevenMcCarthy9 and thanks for reading