West Ham’s 2017/18 financial results covered their second season at the new London Stadium, which the club described as “difficult”, despite finishing a “satisfactory” 13th in the Premier League, as managers Slaven Bilic and David Moyes both left. Some thoughts follow #WHUFC

#WHUFC profit before tax reduced by £25m from £43m to £18m, as revenue fell by £8m (4%) to £175m, though profit on player sales was up £2m to £30m. Despite the revenue decline, wages increased by £12m (12%) to £107m, but player amortisation dropped £4m (10%) to £41m.

All #WHUFC revenue streams decreased: match receipts were £4.1m (14%) lower at £24.5m, due to no Europa League; while commercial fell £3m (9%) to £32m, mainly due to one-offs in the previous year; and broadcasting was slightly lower at £119m, due to lower Premier League place.

There was a £10.3m deterioration in exceptional items, as last year included £8.7m profit from the sale of the Boleyn Ground, while this year featured £1.6m costs to revalue the pension scheme. Other expenses included a £1.8m charge after revaluation of properties.

Only 1 Premier League club made a loss in 16/17, but financial results are normally worse in the second year of the TV deal, which is the case in 17/18. Despite the lower #WHUFC profit, their £18m is actually 2nd best of clubs that have reported to date, only behind #MUFC £26m.

Despite #WHUFC profit on player sales rising £2m (5%) to £30m, this was still only mid-table in the Premier League, around a third of Everton’s eye-catching £88m. Sales included Ayew, Sakho, Nordveidt, Fletcher, Randolph, Fonte, Valencia and Feghouli.

Vice-Chairman Karren Brady noted the club made a profit for the second year in a row. In fact, after a lengthy period of losses (adding up to £144m in the 7 years up to 2013), #WHUFC have now been profitable in 4 of the last 5 years (and the 2016 loss was less than £5m).

#WHUFC have rarely made big money from player sales until the last two seasons. In fact, the £58m registered in this period is more than twice as much as the money made from this activity for previous 8 seasons combined (£25m). This season much lower to date (only really Koyaté).

The adverse impact of numerous exceptional items that historically have plagued #WHUFC accounts is largely a thing of the past, though 2017/18 did included £1.6m for a pension scheme revaluation, while the previous season benefited from £8.7m profit on sale of the Boleyn Ground.

#WHUFC EBITDA (Earnings Before Interest, Tax, Depreciation & Amortisation), ), which can be considered as a proxy for cash operating profit, as it excludes player sales and exceptional items, fell from £58m to £37m, though this is still the second highest in the club’s history.

As a result of this decrease, #WHUFC EBITDA of £37m is only around mid-table in the Premier League, about the same level as #BHAFC. To place this into context, it is around a fifth of Manchester United’s amazing £177m.

After five successive years of revenue growth, #WHUFC saw a reduction in revenue in 2017/18 from £183m to £175m. Most of the growth since 2103 has come from new TV deals (£67m), though commercial also up £12m, while match receipts are £7m higher (not great, given stadium move).

Following the decrease, #WHUFC revenue of £175m is currently the 10th highest in the Premier League, having fallen behind Everton £189m and Southampton £182m. Worth noting that Leicester City’s £233m in 2016/17 was boosted by £70m Champions League money, so will fall in 2017/18.

In fact, #WHUFC had the 17th highest revenue in the world in 2016/17 per the Deloitte Money League, largely due to the impact of the new Premier League TV deal. This is only the fourth time that the Hammers have been in the Top 20 and is their highest ever position.

#WHUFC £116m Premier League TV money was slightly lower than the previous season, as a lower merit payment of £15m (13th place vs. 11th) was offset by higher facility fees £25m (broadcast live 17 times vs. 15). Club has received £742m from the Premier League in the last 13 years.

68% of #WHUFC revenue comes from broadcasting, but this is the most balanced revenue mix outside of the “Big Six”. In fact, around half of the clubs in the Premier League earn 80-90% from TV.

#WHUFC qualified for the Europa League in 15/16 and 16/17, but failed to reach the group stage on both occasions., thus earning peanuts. In contrast, Everton got €14m in 17/18, even though they did not get out of their group, while #AFC got €38m for making the semi-final.

The move to the new London Stadium has not exactly been a money-spinner with £25m match day income actually lower than last season at Boleyn (£27m), though a better comparative would be £20m in a “normal” season. 2017/18 £4m fall due to 3 fewer home games and no marquee friendly.

#WHUFC average attendance has shot up from 35,000 to 57,000, partly due to very competitive pricing, which has obviously restricted revenue growth. Ticket prices have been frozen for last two seasons. West Ham have 7th highest revenue, but a full £20m lower than 6th placed #THFC.

#WHUFC attendance of 56,923 was the fourth highest in the Premier League, only beaten by Manchester United, Tottenham (playing at Wembley) and Arsenal. Capacity increased to 60,000 from January, though other operational issues have led to a legal row with landlords LLDC.

#WHUFC commercial revenue fell £3m (9%) to £32m, largely due to one-offs in the previous year. This comprised £24m commercial activities and £8m retail and merchandising. This was still the 7th best in top flight, but a long way behind the Big Six, e.g. #THFC £40m more.

Since 2013 #WHUFC commercial income is up 61% from £20m to £32m, but absolute growth of only £12m means that the gap to the leading clubs has actually widened, e.g. #MUFC grew by £124m over the same period to an incredible £277m. Stadium naming rights are still up for grabs.

#WHUFC £10m shirt sponsorship with Betway is the 7th highest in Premier League, but is still £25m lower than 6th placed #THFC. Umbro kit supplier deal is valued at £4m a year, while club had a new sleeve sponsor with Basset & Gold in 2017/18.

The #WHUFC wage bill increased £12m (12%) from £95m to £107m in 2017/18, increasing the wages to turnover ratio from 52% to 61% following the revenue fall. Since 2013, wages have almost doubled, pretty much in line with the revenue increase.

Despite the increase in the #WHUFC wage bill to £107m, this is still (just) in the bottom half of the Premier League, behind Leicester £113m, Southampton £112m & Palace £112m. Perhaps a better comparison is Everton, whose £145m wages are a sizeable £38m higher than the Hammers.

The #WHUC wages to turnover ratio of 61% is their highest in five years, though it is fairly common for this to worsen in the second year of a three-year Premier League TV deal. It’s now on a par with Chelsea’s 2016/17 figure.

After five successive annual increases, #WHFC player amortisation fell £4m (10%) from £45m to £41m, though this is still significantly higher than the low of £10m in 2012.

Despite the decrease, #WHUFC player amortisation of £41m is still the 8th highest in the Premier League. As an interesting comparative, Everton’s £67m is around 60% more, which reflects the Merseysiders’ major investment in their playing squad.

Although wages are clearly the club’s largest cost, it’s worth keeping an eye on #WHUFC other expenses, which have tripled from £11m in 2009. These rose £1.2m in 2017/18, partly due to £1.5m revaluation of properties, while stadium rent increased from £2.4m to £2.9m.

As a sign of the board “investing heavily in the team”, #WHUFC made player purchases of £61m in 2017/18 (mainly Marko Arnautovic, Javier Hernandez and Jordan Hugill). That makes £195m in the last three seasons. However, the spend was only around same level as Stoke and Brighton.

#WHUFC have really ramped up their transfer activity with annual net spend averaging £35m in last 4 years against £10m in previous 6 years. This season has “unprecedented” investment of £95m gross spend (including Anderson, Diop, Yarmolenko, Fabianski, Sanchez, Perez & Balbuena).

#WHUFC gross debt fell by £11m to £65m, comprising £54.5m shareholder debt (£45m from Sullivan and Gold at 4-4.25% interest + £9.5m interest-free from new director J Albert Smith) & £10m short-term loan with Rights & Media Funding Ltd (repaid in July, but replaced by £23m loan).

#WHUFC debt of £65m is nowhere near the largest in the Premier League, but they also owe £57m in outstanding transfer fees (though are in turn owed £25m by other clubs). #MUFC have nearly £500m debt, while #AFC, #EFC and #BHAFC owe around a quarter of a billion.

However, #WHUFC (cash) interest payment of £12.7m was the second largest in the Premier League, only behind #MUFC £18.9m, as it included 6% interest accrued on the loans from Sullivan and Gold over the past 6 years.

In fact, including the £4.6m paid in August after these accounts closed, Sullivan and Gold have now trousered a hefty £16.8m interest on their loans, which is in sharp contrast to more benevolent owners, such as Tony Bloom at Brighton and Peter Coates at Stoke.

#WHUFC improved finances are reflected in the 2017/18 cash flow statement with the club generating a healthy £37m from operations. This was used to purchase players (£12m), repay loans (£11m), and make that £13m interest payment to the owners.

Since 2010 majority of cash has come from #WHUFC own operations £185m, supplemented by £81m financing from shareholders (£55m loans & £26m share capital) & £29m from Boleyn Ground sale. Most (£173m) was spent on new players, £72m on loan/interest payments and £22m on capex.

#WHUFC cash balance was largely unchanged at a respectable £31m, albeit significantly lower than Manchester United £242m and Arsenal £180m. Tottenham’s £200m is a bit misleading, as it is mainly due to loan advances for the new stadium development.

Karren Brady concluded, “This is a good set of results. We will continue to manage our finances in the best interests of the club and our fans. We have a bright and exciting future and ensuring West Ham United has a sound financial footing is paramount to that.”