€114m the price of failure for Hammers

WEST HAM’S relegation from the Barclays Premier League will push the club’s debt past the £100 million (€114m) mark, according to a football finance expert.

David Bick, chairman of Square 1 Consulting, states that the Hammers’ descent into the npower Championship will cost them up to £50m (€57m).

David Sullivan admitted last week that in the event of relegation, he and fellow co-owner David Gold would have to raid their personal fortunes for between €23-€46m to keep the club afloat.

Bick fears for the future of West Ham if the joint chairmen refuse to provide finance during their campaign in the Championship.

“The loss of income from relegation, and this figure factors in the parachute payments, will be between £40m (€45.6m) and £50m (€57m) net,” he said.

“Apart from the loss of media money, there is bound to be a loss in season ticket income, hospitality and other matchday income.

“The Premier League division payment is about £50m (€57m) while the parachute payment for the first year is £16m (€18.2m), so there’s an immediate loss of £34m (€38.8m).

“If they don’t secure promotion immediately, West Ham’s position will get more severe. Given their current position with debts of £80m (€91.3m), it would be impossible to raise finance from bank loans now.

“If the chairmen put in more money as loans rather than shares, that will only worsen the position.

“Sullivan has talked about loans of £20m (€22.8m) to £40m (€45m), so the debts could rise to £100m (€114m) to £120m (€137m).

“That’s a huge number for any club, but especially for a club in the Championship.

“If the owners put that money in, the club’s position will be guaranteed for next season.

“If they don’t, I’d certainly fear for the future of West Ham.”

Bick insists the financial implications of relegation will be felt almost immediately. “Roughly you’re looking at a business taking a hit of 50% of its income. It would be very hard for any business to take that,” he said.

“If that happened to a non-football business, there would have to be redundancies and a severe cost-cutting campaign across all items of expenditure. It’s a very sharp drop in income in a short space of time.

“Keep in mind that the main cashflow for clubs is June to August when they’re taking their season ticket money and the payments from the Premier League.

“An additional problem for West Ham is that they’re still due to make payments to Sheffield United after the Carlos Tevez affair, and I believe those payments are made in August.”

West Ham sacked Avram Grant immediately after Sunday’s defeat at Wigan, the result that confirmed their drop into the Championship.

Leading players such as Scott Parker and Rob Green are sure to follow during the transfer window, but Bick doubts the Hammers will profit hugely from any deals.

“You’d expect a player sale now. It’s impossible to see the likes of Scott Parker and Rob Green staying beyond the summer,” he said.

“Clubs are being careful in the transfer market so it’s unlikely West Ham will get premium prices for players.

“If you’re selling players as a successful club, you’ll get better prices than if you’re selling as a relegated club.”

Bick insists Sullivan and Gold must shoulder some of the blame for West Ham’s predicament.

“They’ve stabilised the club financially, in that the situation hasn’t gotten any worse,” he said.

“But they haven’t made any real impact on the level of debt in the club, which is considered too high.

“By common consent, they made a crucial decision in opting to keep Avram Grant in January. That’s proved to be the wrong decision.

“The owners must bear some of the responsibility for relegation because they’re the ones who appointed Grant and then failed to let him go.”


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