West Ham United Financial Results 2023/24

West Ham is the third Premier League club to publish their accounts covering Season 2023/24, their twelfth consecutive season in the top-flight and the last under David Moyes.

Season 2023/24 started well, with the Hammers sitting in 6th place at the half-way stage. However, a poor run of form towards the end of the season saw them drop to 9th, missing out on a European spot.  They reached the quarterfinals of the Europa League (UEFA’s second-tier competition), were eliminated in the 3rd round of the FA Cup, and made it to the quarterfinals of the Carabao Cup. A respectable result, but ultimately not up to the expectations of fans and owners, leading to the departure of manager David Moyes.

On financial matters, historically West Ham have avoided the excesses seen at some other clubs, keeping salaries in check, managing debt levels responsibly, and typically operating within their financial limits.

Overview of Financial Results 2023/24

Season 2023/24 saw a record turnover of £270 million and a substantial profit of £57 million, although this was mainly due to the sale of Declan Rice as it alone brought in around £95 million in profits. This is a good result, especially given that few Premier League clubs generate a profit.

Season 2023/24 financial highlights:

• Continued European participation drove record turnover with all major revenue streams showing year-on-year growth.

• Revenue growth was offset by a significant 21% increases in staff costs compared to the previous year.

• The sale of academy graduate Declan Rice generated approximately £95 million in profit.

• Profit and loss before tax of £57 million, up from a loss of £18 million last year, is expected to be one of the highest in the league, behind Manchester City and likely Brighton.

• A total of £124 million was invested in new players. However, this was less than the £140 million generated from player sales (which includes the sale of Rice).

• The club reported strong operating cash flow, enabling them to pay off an outstanding loan and become debt-free (excluding debt related to player sales).

• There are no concerns regarding Profit and Sustainability Rules (PSR), with a three-year rolling profit of £51 million (before allowable deductions), comfortably exceeding the PSR’s allowable losses of £105 million.

This financial result has enabled West Ham to make significant investments at the start of this season, including hiring a new manager and spending over £120 million on new players.

The first half of this season however has been below expectations, with the club currently sitting in 13th position at the time of this report. Financially, this season will also be more challenging, as there is no European participation therefore turnover will likely reduce, and they now have a higher cost base.

Turnover

The 2023/24 season marked West Ham's third consecutive year in European competition, as they returned to the Europa League (EL) after winning the Europa Conference League (ECL) the previous season. This participation boosts all revenue streams, with UEFA broadcast distributions, additional matches, and enhanced commercial opportunities. It played a key role in the club achieving a record revenue of £270 million, which is expected to be the eighth highest in the league, just behind Newcastle.

All major revenue streams show year on year growth.

Matchday Revenue

Despite playing one fewer home match, West Ham’s matchday revenue increased by £4 million to £45 million. The club boasts the second-highest average attendance in the league, at 62,440, yet their matchday revenue ranks only 8th. While they are unable to command the same pricing power as the "Big 6," they have increased their revenue per fan from £26.40 to £33.20, which the club attributes to the growth of Ticket Exchange.

The chart below shows that West Ham’s revenue per fan is comparable to clubs like Fulham and Brentford, though significantly behind Chelsea, Arsenal, and Tottenham.

Broadcast Revenue

Broadcast revenue primarily consists of central distributions from the Premier League and UEFA. Although the club has not provided a specific breakdown, a 9th place finish is expected to increase their Premier League distribution to approximately £143 million (up from £129 million for their 14th-place finish in 2022/23). Additionally, their UEFA distribution is anticipated to rise to around £24 million, compared to £19 million from their Europa Conference League win in 2022/23.

Commercial Revenue

Commercial revenue, including sponsorships, retail merchandising, tours, and other activities, saw a strong increase, rising to £58 million (up from £48 million in 2022/23), largely thanks to their European success. Like many Premier League clubs, West Ham have partnered with the betting industry, with Betway serving as their main sponsor, reportedly paying £12.5 million per year. However, this will need to change in the 2025/26 season, as a ban on betting companies sponsoring shirt fronts will come into effect.

Their £58 million result is a solid increase, and we estimate it to be the 8th highest in the league, just behind Newcastle. As shown below, commercial revenue is a key factor that sets the "Big 6" apart from the rest, with Arsenal’s (the lowest among the Big 6) still being 2.5 times higher than the next highest, Newcastle.

Staff Costs

Season 2023/24 saw a significant increase in staff costs. Salaries rose by £24 million, while amortisation (the write-down of player acquisition costs) increased by £18 million, leading to a total rise of £42 million compared to the previous year, or 21%. The salary hike was partly driven by contract negotiations with key players and likely includes bonus payments related to the club's victory in the Europa Conference League (as this was on June 7, 2023, they would be accounted for in these latest accounts). The growth in amortisation is attributed to the club's additional investment of £124 million in players during the previous season.

With total staff costs, excluding profit on player sales, standing at £244 million, the club is estimated to have the 9th highest staff costs in the league, behind Aston Villa and Newcastle. Given the club's 9th-place finish in the league, you could argue their performance was about par.

Staff Costs before profit on player sales of 244 million is equivalent to 91% of turnover. This would only rank 11th in the league, as there are still several clubs with a ratio >100% such as Chelsea, Aston VIlla, Notts Forest and Everton. This is a key ratio for the future as if it falls above any proposed governing benchmarks the only way to bring this down is to sell players profitably.

Profit from player sales of £96 million was all about the sale of Declan Rice. As an academy graduate, the full sale amount (around £100 million) minus selling costs is recorded as profit. Rice's transfer now holds the record for the highest-ever sale price of an academy graduate, narrowly surpassing Jack Grealish due to the additional £5 million paid by Arsenal post sale.

Other notable sales, such as those of Gianluca Scamacca and Nikola Vlasic, did not generate any profits, as their sale prices were aligned with their current book values,

Profit and Loss Before Tax

The profits for the 2023/24 season reached £57 million, setting a recent record. However, this was largely driven by the exceptional profit from the sale of Declan Rice, a figure that is unlikely to be replicated in the near future.

The record turnover was offset by higher salaries and other operating costs, but West Ham’s EBITDA remained strong at £54 million. EBITDA is a useful measure of operating cash flow as it excludes non-cash items such as player amortisation and depreciation.

When considering Operating Profits before exceptional items (such as profits from player sales) and interest, the club posted a loss of £31 million. It's worth noting that very few clubs achieve operating profits, highlighting how heavily teams rely on profits from player sales to comply with the Profitability and Sustainability Rules (PSR). West Ham is no exception, having earned approximately £150 million in profits from player sales over the past five years.

We anticipate the reported profit of £57 million to be the fourth-highest in the league, trailing behind Manchester City (whose results have already been published), likely Brighton (due to significant profits from player sales), and Luton (with a very low expense base).

As noted, last season was West Ham’s 12th consecutive year in the Premier League. One interesting statistic, especially for the Premier League, is that over this period, the club has essentially broken even, highlighting their ability to consistently operate within their financial means. Good for sustainability, but fans may argue that investment levels have been lower than their peers such as Newcastle and Aston Villa.

Player Trading

West Ham have consistently invested in their squad, spending £370 million over the past three seasons, the ninth highest in the league, behind Newcastle, Aston Villa, and Liverpool. During the same period, they have sold players for a total of £169 million, with £100 million of this coming from the sale of Declan Rice. This results in a net player investment of £201 million, which ranks tenth highest in the league.

Debt

Thanks to strong operating cash flows in recent seasons, West Ham have successfully cleared all debts, including a £55 million loan that was paid off in the 2023/24 season.

As is common with many clubs, player sales are often structured with payments spread over several years. West Ham is no exception, and by the end of last season, the club owed £190 million to other clubs, while being owed £63 million. This resulted in a net trading debt of £127 million.

Cash Flow

Operating cash flows (cash before investments and new financing) have totaled £175 million over the past three years, making it the sixth highest in the league. This has been sufficient to cover their investment in players.

Over the past five years, there has been a net increase in funding of £54 million. They issued £125 million in shares during the 2022/23 season, but much of this has been used to reduce debt.

This investment level is considerably lower than some of their peers, such as Aston Villa and Newcastle. The chart below illustrates that over the same five-year period, Aston Villa have had new funds of nearly £500 million, and Newcastle close to £400 million.

Outlook

As of this report, West Ham are in 13th place in the league, which falls below the expectations of both the club and its fans following a managerial change and new player investments. With no European competition involvement, turnover is expected to decline due to the absence of UEFA distributions and fewer matchdays. The club is likely to make some profit from the sales of Downes, Benrahma, and Kehrer, estimated at around £20 million, but we would still predict a loss for this season, which could be in the range of £30 to £50 million.

To finish, David Sullivan, the primary shareholder, said “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”.

"We are now enjoying our longest unbroken run in the Premier League, supported by an award-winning charitable Foundation making a real difference in the lives of those in east London and beyond. With historical debts cleared, West Ham United is set to strive towards success, both on and off the field, benefitting our supporters and the larger community".

To access all the numbers and receive regular updates, sign up to the Matchday Finance platform.

Access Now