Talking Point

Ravel Morrison's £19 million Buy Out Clause

The Sun reported today that Ravel Morrison has put a £19 million buy out clause into his contract. They allege he insisted on the buy out clause himself when he signed from Manchester United last January for a reported deal worth £650,000 which can rise to £1 million. I wouldn’t be surprised if Manchester United also added some sell on clause too.

It was revealed last year that Momo Diame has a buy out clause of just £3.5m.

His agent Willie McKay said at the time: “The only reason some clubs have the players they have is because of a clause being inserted. They may make an offer that is less wages than another club has offered but because they allow a trigger clause then the player will sign with them. Diame was a free transfer and believed he could command a better salary than he was offered so to compensate for that the clause was put in so he could leave in six months time for £3.5million. That way the club can sell him at a quick profit or renegotiate.”

In other news this week Ravel Morrison received his maiden call-up to Gareth Southgate’s England Under-21 squad. The Daily Mail reported he admitted being an Arsenal fan in an interview. He reportedly said ‘I can’t wait for Sunday, ‘I’m more of an Arsenal fan to be honest, but Tottenham have done really well this season. Hopefully we can carry on playing how we have been playing, but we can score a few goals this time and you never know how things could go.’

We won’t hold his love of Arsenal against Ravel if he scores the winning goal on Sunday against Tottenham.


Financial

The £36 million pound bill West Ham faces in January

On the very day that the January Transfer Window opens West Ham face some rather large bills which need to be re-paid or refinanced.

Note 20 on page 32 of West Ham’s 2012 Financial accounts explains the terms of our current bank loans.

It explains the primary bank loan to West ham of £30,527,000 provided by a syndicate of five banks and secured freehold land including the Boleyn expires on the 31st December 2013.

A further two unsecured loans are both repayable a day later on 1st January 2014. £5,167,000 is due to CB Holding ehf (The Icelandic company which inherited West Ham through its major share holding in Straumur)

A further £1,058,000 is also due on 1st January 2014 to ALMC ehf (formerly known as Straumur-Burdaras Investment Bank)

This amounts to a grand total of £36 million which needs to be re-financed or paid off by the day the January transfer window opens.

It is a common misconception that all multi millionaires like our chairman keep tens of millions of cash in the bank. Successful business men like our owners will make their money work for them in different investments most of which will not be liquid or easily converted back to cash.

In the case of David Sullivan much of his wealth is tied up in a vast property portfolio through his property company Conegate Holdings which has £245m of assets, £110m of long term debts and £35m cash in the bank.

I am sure it is wishful thinking to believe that David Sullivan will use this £35m in the bank of this property company to wipe out the remaining debts at the end of this year. This business needs working capital to buy and invest in new properties otherwise it would of used some of this cash in the bank to pay back some of its £110m of long term debts.

This same property company already owns 12.5% of West Ham and has loaned it £16 million pounds.

In 2011 Conegate sold the 999-year leasehold of the old Radio Times buidling (35 Marylebone High Street) to a pension company for £32.3m

This is almost an identical amount to what our owners invested into West Ham after our relegation to the Championship.

Unless West Ham makes a statement in January we won’t know how they intend to re-finance or pay off these £36m of loans. The financial accounts for that period will not be released until 2015. How this affects any possible January transfer window budget remains to be seen.

UPDATE:

Since this article was published I became aware that David Sullivan covered some of the question of re-financing in his Interview with Graeme Howlett from KUMB.com in August.

When Graeme asked about the extra 25% of shares Sullivan acquired in West Ham he replied:

“It was all to do with restructuring the bank debt. If I bought these shares they would take over the bank debt which ran out in December. It’s been renewed for another three years and I’ve put a bit of money into the bank debt as well. It’s complicated really”

So it appears the pressure is now off for January.

You can find the full interview from KUMB.com here


Talking Point

Olympic Stadium Naming Rights: Will We Get the Dosh?

Some West Ham fans are confused whether West Ham will share in any revenue generated by the sale of the naming rights of the Olympic Stadium.

Earlier this year the club repeatedly stated that naming rights income would be shared.

These quotes are still published on West Ham’s website WHUFC.com

Olympic Stadium Q+A dated March 2013
Can you tell me more about the the deal between West Ham United and the LLDC?
An upfront capital contribution of £15m which along with a share of Naming rights income will assist with the cost of the overall transformation works.
http://www.whufc.com/articles/20130322/olympic-stadium-qa_2236884_3118486

WHUFC.com Statement on Olympic Stadium decision dated March 2013
Vice-Chairman Karren Brady said: “Anyone who thinks we got a free ride, we most certainly haven’t. We want to pay our way and accept that we have to pay our way and the two owners of West Ham have been very clear on that. We will put in a lump-sum and pay a rent that will cover most of the running costs and then we will share naming rights and other revenues.”

Olympic Stadium Master Q&A dated April 2013
Will the move affect the Club in a negative way commercially?
The full terms of the agreement cannot be disclosed at this stage. We retain full commercial control of our business. Catering and naming rights revenue is shared. The Club has no current naming rights partner at the Boleyn Ground.

David Gold even clarified the situation on twitter on 22nd July this year saying the LLDC own the naming rights but we have a share of them.

Two days after that tweet Karren Brady faced the House of Lords select committee. This is the transcript of what she said on naming rights during her interview.

Lord Bates: You mentioned the naming rights of the stadium. Could you just say a little bit about how that will work and how the bidding process will work? If you are able to say so, how much do you think you will get for the naming rights of the stadium?
Karren Brady: The naming rights are not West Ham’s to sell; they are the LLDC’s to sell. The LLDC will operate that process. It will probably appoint somebody to sell them for it, and it will determine the value and the amount of money that they take for them.
Lord Bates: That will all go to the LLDC.
Karren Brady: Yes.

Some fans have asked what has changed from West Ham sharing the naming rights and the LLDC keeping it all as suggested in the House of Lords interview.

It is believed that West Ham can indeed receive a share of the naming rights but only if the naming rights sale achieves a very high valuation for any revenue share to kick in.

As the agreement remains confidential we do not know what that figure might is and whether there is any realistic prospect of receiving any naming rights income.

So I guess both versions are correct! We do have a share but we are unlikely to see any of it!


Talking Point

What is the future of Rush Green?

West Ham purchased their current training ground, Chadwell Heath in 1995, the story goes that a West Ham director was embarrassed by the poor conditions West Ham were training at the time which led the board to purchase and move to Chadwell Heath.Chadwell Heath is under 10 acres in size having two full size grass pitches & one all weather artificial pitch with flood lights. It also has a large indoor facility which resembles a large warehouse with various outbuildings.

There is an urban myth that the state of Chadwell Heath pitches are the cause of many of our players injuries and I understand West Ham carried out an investigation in the past to find out whether there was any truth in this. As if to prove the point West Ham released an article and pictures on WHUFC.com last year about the Chadwell Heath pitches being dug up re-leveled with sand & re-seeded.

However the fact remains whatever the truth is on the pitches the site is too small with limited building facilities for the modern game.

In February 2009, West Ham entered into an option agreement to purchase the freehold interest in the 29 acre Rush Green Ford Sports Ground from the Ford Motor Company. In September the same year, they completed the acquisition of the property for a sum of £1.4 million.

The original plan was built a new state of the art training facility and in November 2009 West Ham submitted a planning permission application to Havering Council.

The Rush Green site is close to Romford and just two miles from our current facilities at Chadwell Heath.The training ground has a stadium pitch and three training pitches.

David Sullivan said of Rush Green when he officially opened the stadium last year:

“I wanted to come down here to see the facilities and what is happening here, I have to say they’re doing a wonderful job.Our reserves will be playing here next season so for anybody wishing to watch them it will be an easier trip than Bishops Stortford. We’re now located in our heartland of Romford and it’s a lovely little place. Hopefully this could become our new training ground one day”

The question remains when and if this training ground will ever be properly re-developed into a world class training facility worthy of our world class Academy. Our debt problems and getting the Olympic Stadium has been our number one priority but now the clock is finally ticking down to 2016 we need a training facility to rival our 54,000 Olympic stadium.

Just like 1955, we have been left behind by our London Premier league rivals and should feel embarrassed again.

Spurs built a new training centre at their 77 Acre Bulls Cross site at a net cost of £30m. They have 15 grass pitches across the site including four dedicated solely for First Team Training and one and a half artificial outdoor pitches with floodlighting. It also has a pool and hydrotherapy complex, altitude room, large-scale gymnasium and specialist sports rehabilitation suites

The Arsenal Training Centre covers an area of 143 acres with ten full-size pitches which was build in 1999.

Chelsea Cobham training centre in Surrey is based on a 140 acre site and houses all of the club’s football activities, from the first team to the academy, reserve and women’s teams. It features "the latest in training, rehabilitation, medical, pitch and media technology and includes 30 football pitches (three with undersoil heating and six to Premier League standard), an indoor artificial pitch, a media centre, a medical centre, gyms, cold immersion pools, a sauna, a steam room, a HydroWorx pool and a 56 ft hydrotherapy pool.

With our owners ambitions for the Olympic Stadium we also need similar ambitions for a new training facility to rival what Spurs, Chelsea and Arsenal have already done. The question is whether Rush Green at 29 acres is big enough?

Maybe we should be looking for a 150 acre site in the Essex countryside and invest £31m to make it the best premier league training and academy facilities around London.


Talking Point

Safe Standing at the Olympic Stadium

Back in the eighties I stood week in, week out on the terraces of the old South Bank in the Boleyn Ground.

Now I stand in front of my seat in Sir Trevor Brooking Lower at every game like everyone else around me, and I have done so for many years.

However, I understand in other parts of the Boleyn Ground West Ham fans are asked to sit down or face eviction from the ground. In total it is estimated that 65,000 football fans stand in front of their seats every Saturday.

The law changed after the Taylor report stated that football clubs must have a seat for each fan that is admitted. It doesn’t say the fan must sit down in that seat. However, the football league rules say fans must sit down when matches are being played and clubs can eject any fan that doesn’t comply with this rule.

This is enforced differently from football club to club, ground to ground and in some cases, like West ham, it is different from stand to stand.

I think it is time for the Government and the FA together football clubs to take another look at these rules and the law.

We all remember the tragic circumstances and travesty at Hillsborough and why seating came in via the Taylor Report after this event.

I am not calling for a return of the old terraces but saying technology has moved on and it is time football fans had the choice to stand safety.

Personally I support the Football Supporters Federation (FSF) campaign for Safe Standing.

This is what West Ham management have said about safe standing in the past.

“We actually wish we could have fans like that back in England who stand up behind the goal and sing all the way through, fantastic atmosphere really enjoyed it.” Sam Allardyce after his West ham visited Dynamo Dresden.

“I am in favour of safe standing the key is in the title ’safe’” West Ham United Chairman David Gold on Twitter

“In this world the customer has the right to choose and if some fans would prefer to stand, fair enough.” West Ham United Vice Chairman Karen Brady.

Last ‘Movember’ I had the opportunity to ask our Chairman David Gold and former FA Chief Executive Mark Palios their views on safe standing live on a Sports TV channel by Skype.

In response to my question about safe standing David Gold replied “I have recently seen a German model of safe standing, it actually is a seat but you leave the seat up and you can stand there but for other functions they can actually drop the seat down very quickly with a mechanism. It can be done and I think we should at least take a look at it and not close our eyes to the fact”

When asked whether David would install safe standing at the Olympic Stadium he replied. “If I got the Olympic Stadium, I would certainly consider it there”

Hopefully football grounds in the future can accommodate areas for safe standing as well as seated areas for others.

The 2012 Football Supporters Federation survey shows I am not alone and the strong support for the return of standing areas at football grounds, with 54.4% of the survey’s respondents saying they prefer to stand during games, and 91.1% saying fans should be given the choice to sit or stand.

When I spoke to Jon Darch, founder of the Safe Standing Roadshow he added: “It’s great that David Gold recognises the potential of rail seats. I hope he will now back the call for safe standing trials.”

Although David words were recorded before we were finally awarded the Olympic Stadium it appears safe standing forms no part of the current LLDC design for the Olympic Stadium. I do wonder what will be West ham’s stance on standing in front of seats when we move to Olympic stadium.


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