By David Owen
January 4 – West Ham United, the east London club gearing up to move to the Olympic stadium in 2016, has become the latest Premier League outfit to report substantially improved financial results on the back of increased broadcasting revenue.
Pre-tax profit for the year to end-May 2014 reached £10.3 million on turnover of £114.9 million, against a loss of £3.5 million on turnover of £89.8 million the year before. Revenue from broadcast and central sponsorship distributions surged by more than 45% to £75.4 million. With revenue from commercial activities actually edging down, broadcast and central sponsorship now accounts for nearly two-thirds of the overall turnover figure.
The numbers confirm the impression that – with UEFA’s Financial Fair Play (FFP) initiative making it more difficult for clubs to fritter away their latest broadcasting rights bonanza – 2013-14 is shaping up to be a landmark year for profitability in the English top tier.
Joint chairman David Sullivan, who owns 51.1% of the club with fellow director David Gold owning a further 35.1%, recently indicated in an interview with the Sunday Telegraph that a 20% stake was up for sale with the proceeds to be used to pay down debt.
The accounts put the club’s creditors at the end of May at £157.5 million, of which £24.4 million arose from player transfers, with £41.8 million categorised as bank and other loans and £49.2 million as loans from shareholders. The bank facilities and shareholder loans are repayable by end-2016. The accounts note that loans from shareholders are unsecured and subordinated to the secured bank loan. “Interest is accrued at 6-7% but will not be paid or added to the loans until the loans are repaid. The interest accrued as at the balance sheet date amounts to £6,342,477.”
The Hammers are riding high in the top eight of the Premiership, with players such as Alex Song and Stewart Downing enjoying their most effective seasons for some time, and others such as Aaron Cresswell and goalkeeper Adrián also excelling.
On the impending move, vice-chairman Karren Brady said the club had selected the Olympic stadium premium hospitality fit out, agreed lounge layouts and designed the new 12,000 sq ft club megastore. Appointments with fans to discuss the “migration” will start in April in Stratford. Premium hospitality packages are already on sale, with Brady stating that “the level of take up is such that, despite the fact that we are doubling our Upton Park capacity, we will not have enough seats to fulfil demand”.
The club announced last February that it had agreed the sale of the Boleyn Ground [Upton Park] to Galliard Group, a local developer, with a mixed residential, retail and leisure development envisaged.
Brady predicted that West Ham’s new home would be “one of the greatest arenas in world football and a platform to transform the future of our great club”.
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