The future of the Boleyn ground

In this financial article I will discuss the financial value of the Boleyn ground land and what might become of it after we move to Olympic stadium.

West Ham originally rented Green Street House and grounds from the Roman Catholic Church from the early 1900’s. This land was later sold by His Eminence William Cardinal Godfrey and the Catholic Church to West Ham United Football Company Limited on 5th August 1959.

In the May 2012 West Ham accounts the value of Boleyn ground is listed at just over £71m but this is not it’s true value, this is just the value of the replacement cost as a football stadium or the possible value if there was a market for 35,000 seat football stadiums which there is not.

We all know in reality the stadium will be knocked down and the land would be sold for redevelopment. In the latest West Ham accounts the value of the Boleyn ground land together with our various training grounds is listed as just over £16m for auditing purposes.

The true re-sale value depends on planning permission from Newham council but we know the council are keen to regenerate the area in a similar way that happened around canning town. Some valuations range from £20m to £30m but it will depend on market conditions and what planning permission will be granted for the land.

Arsenal converted its former stadium Highbury into 711 flats and raised £157m from property sales but a development in East London is unlikely to get anywhere near that.

In 2010 the club placed adverts in trade magazines seeking “expressions of interest for the stadium as a development opportunity” after the 2012 Olympics.

It was widely rumoured that a supermarket and affordable residential flats were planned but as we now know the deal collapsed with the collapse of the first Olympic stadium bid.

The idea to bring a large supermarket and flats to the area is nothing new.

In 2006 it was reported that Asda together with developer St Modwen put forward a £50m scheme to demolish the historic Queen’s Market and build 130 flats next to its new superstore. Asda later pulled out of the controversial development after 12,000 signatures were gathered to oppose the plan by a group called Friends of Queen’s Market.

David Sullivan has an impressive property portfolio himself which is now his main source of wealth. This portfolio is owned under his property company called Conegate Holdings Ltd which has property assets worth over £240m. He owns ‘a huge Sainsbury’s’ that pays him £3million a year in rent as well as a ‘couple of Marks & Spencers’. Just the buildings, you understand, which the retail giants rent from him. Conegate also owns shops, offices and residential properties across the UK. They also own 12.5% of West Ham United through a share holding in WH Holdings Ltd and made loans to West Ham’s holding company of £16,850,000 at an interest rate of the base bank rate plus 5%.

I am sure it is just a complete coincidence that West Ham value their land at £16m in their latest accounts which is almost the identical amount owed to West Ham by Sullivan’s property company Conegate holdings.

I must stress this is just my own personal speculation but I could see a scenario where this same property company which owns 12.5% of West Ham with a track record of owning supermarkets bids, buys, develops,owns and subsequently rents property on the land that was once our home for many years. Not that there would be anything wrong with that you understand. It would be a good business decision in my opinion by someone who might be sympathetic of it’s long history.

Talking Point

It is important to get the marketing right

Earlier this week many West ham fans were angry that West ham’s marketing department over stepped the line by releasing an advert inviting fans to ‘See City’s Superstars at the Boleyn’ although it was only up for 12 hours it was widely seen after it was distributed on social media platforms.

The replacement advert

On Tuesday David Gold via his twitter feed agreed with the fans saying he apologised for the poor wording and agreed it should be about us and not the opponents.

With the move to the 54,000 seat Olympic stadium in 2016 it will be more important than ever for the West ham marketing department to attract new and possible neutral fans to fill the Olympic stadium whilst not upsetting their traditional West Ham fan base.

It will be a very fine line for them to tread. Hopefully they have learnt something from this public relations own goal this week.


West Ham's Debt Explained

In this financial article I will attempt to explore and explain West Ham’s remaining debt position. I believe many West Ham fans still believe we have debts of £100 million or we have to clear £70 million of bank debt before we can move to the Olympic stadium. That is the not the case as I hope to explain.

Net debt is just a metric that shows a company’s overall debt situation by netting the value of a company’s liabilities and debts such as bank loans with its cash held in the bank.

In 2010 David Sullivan after the take over famously revealed in a press conference that West Ham were over £100 million in debt.

Sullivan explained “We’ve paid down some of the debt and injected some working capital but there’s still more than £100 million of debt. In that there’s £50 million owed to banks, there’s £40 million owed to other clubs. There’s not a penny to come in, they (the previous owners) have borrowed against the next two years of season-ticket money.
The sponsors have paid 70% of their three-years up front. In addition there’s the club’s settlement to (former manager) Alan Curbishley, so the real debt is about £110 million.”

Of this non bank debt Sullivan spoke about Sheffield United is believed to have agreed £21m in an out of court settlement although Gold & Sullivan said they inherited around 75% that debt on takeover.

The Alan Curbishly settlement was believed to be £2.2m and the advance on season ticket sales were £7.7m the first year and £7.25m the second year. The SBOBET sponsorship was believed to be worth £1.2m per year much of which was advanced also.

A massive financial mess by anyone’s standards!

The 2009 accounts were the first to be released under Gold & Sullivan ownership showed which a net bank debt of £55.47m with a further £33.65m in other long term liabilities. These included £10m owed to a major shareholder, £3.8m owed to other clubs for transfers and £18m to be paid to Sheffield Utd.

In 2010 this quickly reduced to £33.5m of long term bank debt with an extra £24m in long term liabilities which were principally £7.7m of advance season ticket sales and £16m left to pay of the settlement to Sheffield Utd. In the company accounts Chairman’s statement David Sullivan confirmed that David Gold & himself invested £24m into the club which resulted in a reduction of £12m of bank borrowing and £22m of overall liabilities that year.

In 2011 Sullivan and Gold invested another £3m into the club on top of buying further shares. In his chairman’s statement of that year Sullivan revealed that Gold and himself had invested £29m of equity and loans to the club in the past 18 months. Despite this the bank net debt this increased by £8.1m to £41.6m. Long term liabilities added an £27m which included the remaining £10.5m due to Sheffield United, £3.1m owed to other clubs for transfers and £7.25m for second year of the Season Ticket advance.

In that same statement Sullivan said “Since 31 May 2009 bank debt has reduced from £44.9m to £38m while total net creditors have reduced from £112.7m to £91.2m. In addition during this period we have refinanced the bank debt and we are now on schedule to reduce bank debt to under £21m by 2013.” The figure quoted by Sullivan of £91.2M obviously included creditors due within 12 months which were offset by income that year.

In the latest 2012 financial year accounts revealed Gold and Sullivan invested another £32.2M of cash in the form of loans after West Ham’s turnover fell drastically to £46.2m in our drop to the championship.

This further increased our net debt to £70.7m although £35m of this debt is now owed to Sullivan & Gold through loans so actually it is only £35.7m of external bank net debt when you remove share holder loans. Although £16m of these share holder loans are owed to Sullivan’s property company Conegate Holdings.

Of this remaining £35.7m £5m was due in the year ending 31st May 2013 so should already be paid off wit the remaining £30m due more than 12 months.

Of this £30M longer term bank debt only £25M is secured against the Boleyn Ground as a mortgage so it must be paid off before we move to the Olympic stadium. The remaining £5M of loans are unsecured so do not have that same restriction.

I saw many papers published the £70M figure that West ham had to clear before moving to the Olympic Stadium. Well by my calculation it is more like £25M.

Outside of bank debts our long term liabilities mentioned by Sullivan back in 2010 are also vastly reducing.

We owe West Ham bond holders £611,000 since 1997 which we will pay back after 150 years of the scheme. By the time it is payable in 2148 I am sure £611,000 will be average weekly wage of Premier league footballer so it not a debt that should bother us too much.

We owe other football clubs £4.6M from player transfers from staggered payments. It will be interesting how this increases in 2013 with the Carroll & Downing transfers but more clubs want money up front now or within 12 months so staggered payments are now becoming a thing of the past unless they are desperate to get shot of a player.

In the ‘other creditors’ section of our 2012 accounts there is a sum of just over £5M, this is almost definitely the last payment to Sheffield United which David Gold confirmed we paid very recently.

We are now also finally free of the advance of season ticket money of £7.25M in 2011 & £7.7M in 2010. This like a new revenue stream to West Ham as the Icelandic’s banked 2 years of season ticket sales up front!

We also account for £2.5M from the Football Stadia Fund grant scheme in our long term liabilities even although I understand this is not repayable.

So with the remaining long term liabilities listed in the 2012 accounts we can add on another approx £5M to bring the total West Ham debt to around £37M or £72M if you include the loans from owners Sullivan & Gold.

The 2013 accounts are released early next year and I will update the overall debt picture as soon as they become available. The owners have certainly put their money where their mouth is and for that I am grateful.

David Sullivan speaks debts on takeover

Talking Point

The Y word & those Tottenham Songs

The use of the Y word has made the headlines in the last few weeks.

It all begun when the Football Association issued a statement warning all supporters that the use of the Y words could result in a banning order or criminal charges.

David Cameron entered the debate when he told the Jewish Chronicle there was a difference between Spurs fans “describing themselves as Y**” and the word being used as an insult. Even David Gold was quoted by Hugh Southon saying David is unfazed by use of the Y word by Spurs fans.

As we approach the Spurs away game on Saturday 5th Oct what is clear is that West Ham and the police have zero Torrance with West Ham fans using the Y word or singing any Tottenham songs which could be considered anti Semitic.

In a piece in the Sunday telegraph quoting a piece from Saturday’s West Ham v Everton programme it said “Any fan found to be acting inappropriately – including racist, anti-semitic and homophobic behaviour – will be punished to the full extent of the law and banned from attending matches. “The club, along with the Metropolitan Police, will continue to operate a zero tolerance policy towards any form of discriminatory behaviour.”

The trouble last season at Tottenham away was widely publicised with two fans receiving a police caution and another receiving a life ban. West Ham said in a statement at the time “West Ham United are in contact with Tottenham Hotspur to assist them with their investigation into the conduct of a small number of supporters and alleged inappropriate chanting during yesterday’s match at White Hart Lane”

What is less well publicised is what happened at Stoke home game last year.A group of West Ham supporters started singing the Tottenham song which starts ’We’ll be running about Tottenham with our…’ Although the game was televised on Sky this passed off without a mention as the ‘Tottenham song’ has been regularly sung at non Tottenham games over the years.

During the Chelsea home game uniformed Met police officers stormed the Sir Trevor Brooking Lower stand and arrested several fans pointed out by a plains cloths cop.
None of us understood what was going on at the time but it later transpired that a police undercover operation had videoed fans singing songs which the police and the club regard as anti Semitic. These fans were later charged, pleaded guilty at court and received 3 year banning orders.

I guess the point I am trying to make is singing a song can get you arrested, a criminal record and a banning order from the club you love and support. It’s just not worth it! I know we have all probably sung something in the past we shouldn’t but hopefully that was because we were too young to know better or they were different times. The club & police have been it clear that the defence it’s only football banter no longer holds any water with them.

Last year a Jewish West Ham supporter who is a journalist wrote this in The Guardian which I still think makes interesting reading on the subject one year later.

It can be found HERE

Talking Point

The Great West Ham Ticket Exchange Mystery

Last October West Ham announced an extended partnership with Ticket Exchange Company Viagogo

West Ham United’s Commercial Director, Barry Webber, said at the time “Our loyal fan base deserve a place to sell tickets they can no longer use to other West Ham supporters. Our new partnership with Viagogo, the world’s largest ticket exchange, is great news for both supporters who are occasionally unable to use their season cards and fans struggling to get a ticket to must-see games.”
Barry Webber

I thought this was a great service and used it myself for 3 home games I couldn’t make last season due to work or family commitments. It seemed everyone was a winner. The season ticket holders got some money back for the games they couldn’t attend ( in the case of mine I made a small profit on what they originally cost me), Viagogo made their commission from both the buyer and seller, the buyers paid for tickets which were usually already sold out so a supply and demand marketplace dictated the price and finally the club made a commission on a ticket they had already sold once already. Because of the quite high Viagogo commission charged it also meant Viagogo didn’t compete with West ham ticket office as the prices were more expensive than general sale prices.

I thought this service really added value to season ticket holders knowing they could legally sell their tickets on if they couldn’t make a game.

At the beginning of this season this contract expired and was not extended by West Ham. This was not announced by West Ham to my knowledge and slipped quietly under the radar of most people.

For the first home match of the season against Cardiff a season ticket friend of mine who sits next to me in the Sir Trevor Brooking lower was on holiday abroad so she asked me to sell her ticket on Viagogo. It was only then I worked out the service was no longer available.

I tweeted West Ham’s commercial director Barry Webber. He replied quickly saying the contract had come to an end and the club has reverted back to offering season ticket holders to login to the website and sell their season ticket once the stadium has sold out. Basically he confirmed they were bringing ticket exchange back in-house.

The odd thing was Cardiff was already listed as SOLD OUT on the Saturday but there were no options or instructions how to sell using the in house exchange service. I sent him a screen shot of the website showing it saying SOLD OUT.

He replied saying there were still a handful of tickets left and I should re-visit the website which had mysterious changed back to tickets being available again.

I kept on trying right up to 2.55pm on my mobile but the option never became available and no email was received to say that season ticket holders could sell their season tickets,

The same thing happened at the Stoke City two weeks later. I was away with my family in St Ives, Cornwall for the school holidays but despite being sold out no option became available and no email was received.

Barry tweeted out it was another SELL OUT but clarified afterwards “only before kickoff.”

I am not sure whether this in-house Ticket Exchange is working for anyone else out there? I can find no instructions or information on the scheme on or I have received no emails from the club on Ticket Exchange as I did about the Viagogo scheme.

This must be in West Ham’s financial interest to get right. They will make more money selling the tickets at general admission prices whilst the season ticket holder gets a credit back.

I hope West Ham remember the words Barry said in 2012 namely “Our loyal fan base deserve a place to sell tickets they can no longer use to other West Ham supporters”

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