Don’t forget to take part in the WHTID readers survey. Click HERE
In January 2010 David Sullivan purchased a 50% controlling share in West ham United for £52.5 million with CB Holdings representing the Icelandic banks including Straumur retaining the remaining 50%. David Sullivan later split his share holding on a 50/50 with his long term business partner David Gold.
In May 2010 the two Davids increased their share holding to 60% investing an addition £8 million. £4 million of that investment is said to have gone straight to CB Holdings with the remaining £4 million being fed back into the club.
In August 2010 WHUFC.com released a statement saying they had found new investors in the shape of John Harris CBE and Daniel Harris founders of Alba group who are lifelong West Ham fans. Also included in this group is the infamous Terence Brown, former Chairman of the club. Daniel Harris joined the West Ham board as a non executive director to represent these new investors and Terence Brown was made Honorary Life President of the club following his investment.
Their investment of £4 million was believed to be in return for 3.8% of the shares owned by CB Holdings. At the same time the two Davids increased their share holding to 30.6% each (an increase of 1.2% of the shares between them).
It is known that Terry Brown made £33.4 million from his original sale of West Ham shares to the Icelandic’s and received over a £1 million salary in his final year as West Ham chairman. His original investment into West Ham in the nineties is thought to have been in the region of just £2 million when he took over from the Cearns family. As a twist of fate the two Davids also originally owned 27% of West Ham which they purchased from Jack Petchey in the late eighties. The two Davids later sold their shares to Terry Brown but David Sullivan retained 4% right up to their compulsory sale when the Icelandic’s took over in 2006.
The Harris family owned the Alba group, a consumer electronics company with well known brand names including Alba, Bush, Grundig & Goodmans. Their net worth today is said to be over £150 million.
Bringing the story up to date, David Sullivan recently acquired a further 25% of shares in West Ham this July as part of a £25.5m restructuring of the club’s debt. The deal is thought to involve a swap of debt for equity after David Sullivan & David Gold lent West Ham £35 million in the form of personal loans with £1 million per annum of roll over interest as disclosed in the 2012 financial accounts.
The share holdings now stand at:
1. David Sullivan: 55.6%
2. David Gold: 30.6%
3. CB Holdings representing Straumur & other Icelandic banks 10%
4. John Harris, Daniel Harris and Terence Brown: 3.8%
Karen Brady claimed in an interview with the Times in 2012 she also has a ‘small shareholding’ in West ham but it is not clear whether that is included within the two Davids combined 86.2% share or as part of the 3.8% owned by the other investors.
During the recent purchase of extra shares non executive director Bob Ellis resigned from the board. Bob is a management consultant who describes himself as a restructuring specialist on his Linkedin profile. It was likely he represented the interests of CB Holdings until recently.
A new non Executive director was appointed to the West Ham board in July. He is the former Non Executive West Ham chairman Andrew Bernhardt who now represents CB Holding remaining 10% share holding in the club.
Some have questioned the timing of the recent purchase of extra shares. In a recent interview with KUMB David Sullivan explained there was a deadline to purchase a further 25% of shares but after speaking with Financial Fair Play expert Ed Thompson of www.financialfairplay.co.uk I believe the actions could also be related with a desire to comply with UEFA Financial Fair Play rules which if nothing else shows ambition that the board believe we could qualify for Europe via one route or another this season.
UEFA’s rules require our losses to be below 45 million Euros over the 2011/12 and 2012/13 season combined. Any loss above 5 million Euros for the two seasons combined has to be covered by an injection of equity.
Before the latest injection of equity by David Sullivan it is likely West ham did not comply with UEFA FFP rules.
If West Ham did not comply with these rules then we would be not be eligible to play in UEFA competitions next season. We have to apply to UEFA in advance. If you wait until you qualify it would be too late.
So maybe a top five or six position is a bit too ambitious this season but a good cup to be crowned as League cup winners or even FA Cup winners or runners up might be more within our grasp for an unlikely UEFA place next season!
Further information on UEFA Financial Fair Play can be found at www.financialfairplay.co.uk