Blind Hammer assesses how much financial pressure West Ham can place on the top 4 positions and wonders if we will need to manage expectations from our move to the OS.
Leicester’s upsetting of the form book was a memorable highlight of last season, along with our sparkling performances at Arsenal, Manchester City and Liverpool. For the first time in a long time the apparent “right” of clubs with greater financial resources to dominate the top of the Premier League was shaken up. Chelsea finished in an unfamiliar 10th place and Manchester United, despite winning the FA Cup missed out on Champion’s League qualification.
As well as Leicester and ourselves , Tottenham also achieved above most expectations grabbing a Champion’s League spot, whilst Arsenal provided the consistency which many of their fans complain about, in grabbing for yet another season, a Champion’s League berth. The relative fluidity of places in the top 4, plus the prospect of moving into the Olympic Stadium has caused some excitement that West Ham are also poised to break into the top four of the Premiership. Paul Merson has predicted that West Ham will be a Champion’s League club by 2019. The argument goes is that the move to the OS will allow West Ham the financial clout to compete with the top four. Whilst West Ham may compete on the pitch, whether they can compete, in the short term financially is less certain.
Despite the relative decline of Chelsea and Manchester United the extent to which their financial resources still dwarf that of West Ham is sobering. Not many football supporters realise the sheer size of the inequality in resources in the Premiership. Sullivan has gone on record as saying that he expects turnover at West Ham to increase next year because of increased ticket sales, but this increases is not as much as you would expect as the club lose exclusive rights to catering and other sources of revenue from activities such as stadium tours. Sullivan estimated that the club would receive a net £12 million boost from the move to the OS.
Whilst this is a welcome increase in resources, it is a drop in the ocean when we compare it to existing turnovers in the Premier League. The latest figures available are for the 2014-2015 season. In that year Manchester United had a turnover of £395 million, and Chelsea had £319 million. Their turnover figures were both massively higher than West Ham’s, about 3 times higher, at £121 million. The gap between West Ham and Manchester united and Chelsea turnover was therefore £274 million and 198 million respectively. In other words the gap in financial power alone dwarfed West Ham’s complete turnover. As you might imagine similar gaps exist between us and Manchester City and Arsenal. Arsenal’s turnover of £345 million was £224 million bigger than ours and Manchester City’s at £352 million was £231 million greater. Even Liverpool at £298 million was £177 million ahead of us.
So whilst with the move to the Olympic Stadium West Ham can start a process of catch up, we should have no illusions as to the scale of the financial mountain we have to climb. Financial resources are not, as we have seen last season, necessarily a guide to performance. Newcastle united had a greater turnover than West Ham, at £129 million, yet still managed to suffer relegation. Yet across Europe if we look at a table of turnover we find that money provides results. The clubs with the largest turnovers tend to prevail. The reality is that over time money talks, clubs are able to buy in the players they need to compete at the top level.
In fact, a good way of judging the performance of your club is to compare results against the turnover table. West Ham was 9th in the turnover table, so can be judged, in finishing 7th to have performed well, punching above their weight.
So given the turnover table that are the sides around us who are our nearest competitors? Well the good news for next season at least is that 2 of our nearest turnover competitors were relegated. Newcastle was 2 places above us at £129 million, whilst Villa was one place behind us at £116 million. This means that, looking upwards, our nearest competitor was Everton at £126 million, and looking behind, Southampton at £114 million. With these competitors our yearly £12 million increase will potentially make a difference, however as we know Everton have been promised extra investment to try and maintain their edge.
For many of us though the most pertinent question is what is the gap between West Ham and Tottenham? The gap in turnover between West Ham and Tottenham is not as big as other top 6 clubs but is still substantial. Tottenham at £198 million is a hefty £77 million greater than West Ham. Tottenham Also have plans to move into a 61,000 seater stadium. Whilst the terms of this stadium construction is unlikely to approach the deal available to West Ham at the OS, it does mean that, unlike West ham, they will have exclusive rights to income generated from their stadium.
Much will depend, over the next 10 years, as to the extent that West Ham can extend their commercial revenues amongst an expanded supporter base both at home and abroad. In this they are involved in a race with other clubs to unlock resources in developing world markets. However the consequences of the gap will also tend, I imagine, over time to increase pressure on ticket prices at the OS.
The existing gap in resources is a reality background we should bear in mind when we move to the OS. We will not, as a result of moving to the OS become a club with the resources of Tottenham and Liverpool, let alone Chelsea or Arsenal overnight and we may have to manage expectations. If the project all goes according to plan West Ham can start the long process of overhauling the gap which exists between us and these clubs above us in the turnover table. As with everything results will be critical. Attempts to expand the turnover potential of the club will flounder if the team struggles in their new home. For myself I will keep an eye on the turnover table. If our results on the pitch match or exceed our financial turnover I will consider each season a success.