Stubbornness — on all sides

[WhereDoesThisEnd]

For as long as many of us can remember, West Ham have bounced between relegation fights and promotion pushes. In plenty of those seasons we got through because we stuck together and the place was loud when it mattered.This feels like one of those seasons where we could end up on the wrong side of the line. And if we’re honest, something around the club feels off.Since the move from Upton Park, I can’t help feeling that a section of the fanbase almost sees relegation as a punishment for Sullivan. But if that happens, the only people who really pay for it are the team and the supporters. A flat, divided crowd doesn’t help anyone. We’ve all seen on European nights that the London Stadium can be a great atmosphere when everyone’s at it.At the same time, it’s hard to know what Sullivan actually wants. He could probably have sold up for a big profit when we were pushing top six and doing well in Europe, but he didn’t. From the outside, it just looks like stubbornness on both sides.My kids don’t have the same attachment to Upton Park — they were too young. They just love West Ham as it is. Maybe that says something. Maybe those of us still hung up on the move need to accept it’s not changing, and maybe Sullivan needs to see that the relationship with a lot of the fanbase is worn out.Let the next generation just support the club without carrying all this baggage. Right now it feels like all of us — Sullivan and some of us older fans — are getting in the way.West Ham should be about what comes next, not just what’s gone.
 

 

[WhereDoesThisEnd]

I should probably say that football finance is an area I work in so I naturally find this side of things interesting. I’ve genuinely enjoyed the back and forth on here about West Ham and I’m not trying to push an agenda, and if this level of discussion isn’t what people want then I’m happy to dip out.

On Mike’s point I think we’re just coming from slightly different angles. Stadium ownership can raise your PSR ceiling and if a club is aggressive and successful it can drive higher revenues and more spending power. Our model works differently because by renting we run with a substantially lower fixed cost base than many competitors which means less cash going out each month and more flexibility in hand. It lowers the ceiling but also lowers the risk and neither approach is automatically right or wrong, they are just different strategies depending on priorities and execution.

[Mike Oxsaw]

PSR is your credit limit, cash flow is your bank balance. The limit doesn’t matter if the cash isn’t there. If basic cash flow discussion is seen as an agenda, then we’re probably debating emotion, not finance.

Cash flow?

5 - or even 0.5% of something is better that 100% of nothing.

Our tenancy gives us that nothing from which we obtain 100% in benefit.

Owning a ground with complete financial control offers a % of something positive, even if it is just enough to cover the cost of the milk in the players' canteen.

[southbankbornnbred]

For as long as many of us can remember, West Ham have bounced between relegation fights and promotion pushes. In plenty of those seasons we got through because we stuck together and the place was loud when it mattered.This feels like one of those seasons where we could end up on the wrong side of the line. And if we’re honest, something around the club feels off.Since the move from Upton Park, I can’t help feeling that a section of the fanbase almost sees relegation as a punishment for Sullivan. But if that happens, the only people who really pay for it are the team and the supporters. A flat, divided crowd doesn’t help anyone. We’ve all seen on European nights that the London Stadium can be a great atmosphere when everyone’s at it.At the same time, it’s hard to know what Sullivan actually wants. He could probably have sold up for a big profit when we were pushing top six and doing well in Europe, but he didn’t. From the outside, it just looks like stubbornness on both sides.My kids don’t have the same attachment to Upton Park — they were too young. They just love West Ham as it is. Maybe that says something. Maybe those of us still hung up on the move need to accept it’s not changing, and maybe Sullivan needs to see that the relationship with a lot of the fanbase is worn out.Let the next generation just support the club without carrying all this baggage. Right now it feels like all of us — Sullivan and some of us older fans — are getting in the way.West Ham should be about what comes next, not just what’s gone.
 



 

Your username is becoming less of a philosophical question, and more a community-wide cry for mercy.

[WhereDoesThisEnd]

PSR is your credit limit, cash flow is your bank balance. The limit doesn’t matter if the cash isn’t there. If basic cash flow discussion is seen as an agenda, then we’re probably debating emotion, not finance.

[northbankfrank]

Our billionaire owners, like the rest of the Premier League owners (sportswashing aside), are only interested in making money out of the club.  Given their acess to capital and financial advisors, it's amazing that the armchair experts on this site can identify ways to increase profits that they can't see.  Maybe Kretinsky will be making lucrative approaches to the site experts to increase his returns.

[southbankbornnbred]

PSR rules do not pay the bills, cash flow does. Stadium finance is still real money out of the club. I am genuinely struggling to understand the counter to that point. If tens of millions leave annually in interest and maintenance, how does that not affect what is comfortably spendable?

Go away, mate. You've come here with a very obvious agenda, fucked up your flawed analysis, and are still boring the living bejesus out of people who saw straight through you. You're a baord patsy, absolutely no question about it. At best, you just don't know it. At worst, you're trying to polish your boss's turd.

[WhereDoesThisEnd]

PSR rules do not pay the bills, cash flow does. Stadium finance is still real money out of the club. I am genuinely struggling to understand the counter to that point. If tens of millions leave annually in interest and maintenance, how does that not affect what is comfortably spendable?

[southbankbornnbred]

People are mixing up turnover PSR and actual spendability. PSR is about allowable losses and stadium capex training grounds and academies are largely excluded from that calculation so owning a stadium does not hit PSR the same way player spending does, but the cash cost is still real because finance interest and maintenance still have to be paid even if PSR treats them differently. Spurs reportedly carry around 35 million a year in stadium finance and maintenance costs that we simply do not have because we rent.

So the comparison is not just who earns more revenue it is who has more usable cash after fixed commitments. Spurs have a higher ceiling but bigger obligations to clear first while we trade some upside for flexibility. Ownership can raise the ceiling renting can protect margin and neither model is automatically right or wrong it depends on execution and priorities.

It is interesting how technical the discussion around Sullivan’s decisions becomes once you actually look at the numbers and structures behind them.

People aren't mixing anything up, fella. Except, perhaps, you. "People" know what the PSR rules are and they know what the incoming SCR rules are. Not only do you not have a monopoly on such knowledge, but your own understanding of it all appears deeply blinkered. Now, run back to your pals at the board and let them know they fucked up - and stop bothering us with your infantile analysis.

[WhereDoesThisEnd]

People are mixing up turnover PSR and actual spendability. PSR is about allowable losses and stadium capex training grounds and academies are largely excluded from that calculation so owning a stadium does not hit PSR the same way player spending does, but the cash cost is still real because finance interest and maintenance still have to be paid even if PSR treats them differently. Spurs reportedly carry around 35 million a year in stadium finance and maintenance costs that we simply do not have because we rent.

So the comparison is not just who earns more revenue it is who has more usable cash after fixed commitments. Spurs have a higher ceiling but bigger obligations to clear first while we trade some upside for flexibility. Ownership can raise the ceiling renting can protect margin and neither model is automatically right or wrong it depends on execution and priorities.

It is interesting how technical the discussion around Sullivan’s decisions becomes once you actually look at the numbers and structures behind them.

[Mike Oxsaw]

Guys, the closest comparison to us in the Sullivan debate is Spurs, because a big part of this discussion is stadium ownership versus renting. In a similar timeframe both clubs moved into stadiums worth hundreds of millions just miles apart in London. The structural difference is simple: Spurs fund and maintain their stadium, we rent ours. That creates a £30m+ annual cost gap in our favour before extra revenues achieved by Spurs are factored. Ownership can bring higher revenues, but those revenues first have to bridge huge finance and maintenance costs. So whether people like Sullivan or not, the stadium decision itself wasn’t irrational. It was a low risk financial model. The fair criticism is whether he maximised the fan experience and football side off the back of that saving.

 

 

You won't get any support for Sullivan and his current business model of renting vs owning.

Whilst it may have been a valid strategy 15 years ago, it's long since ceased to be as the game, not to mention the world, has moved on.

Sullivan's insistence on sticking with such a strategy is akin to (him) trying to drive a 30 year old, poorly maintained diesel lorry through London and insisting that he doesn't need to pay any sort of tax/fine/levy for being allowed to do so.

At the very least he should have managed to renegotiate the terms of the lease to allow the club far more freedom with use and revenue generating opportunities in the stadium. He's spectacularly failed on that front, too

[southbankbornnbred]

Guys, the closest comparison to us in the Sullivan debate is Spurs, because a big part of this discussion is stadium ownership versus renting. In a similar timeframe both clubs moved into stadiums worth hundreds of millions just miles apart in London. The structural difference is simple: Spurs fund and maintain their stadium, we rent ours. That creates a £30m+ annual cost gap in our favour before extra revenues achieved by Spurs are factored. Ownership can bring higher revenues, but those revenues first have to bridge huge finance and maintenance costs. So whether people like Sullivan or not, the stadium decision itself wasn’t irrational. It was a low risk financial model. The fair criticism is whether he maximised the fan experience and football side off the back of that saving.

 

 

"That creates a £30m+ annual cost gap in our favour before extra revenues achieved by Spurs are factored."

That's like saying "I'm doing better than all the kids in my class, except when we sit exams and they outperform me."

What the feck are you measuring?! Spurs have considerably more revenues than us - upwards of £250m more. That's the very point that people are making to you. Sure, they have to pay off their stadium and that costs them about £45 to £50m a year. But their revenues last year were £528.2m. Ours were £267.9m. One of many reasons that gap exists is because they get to keep ALL revenues they earn - including most revenues linked to the stadium (they have the NFL deal etc). Under the London Stadium deal, we are not able to do that.

But you just keep thinking we're "saving" £40m a year against Spurs. It's entertainingly delusional.

[John Drake]

Your argument might be valid from an abstract profitability perspective. However, as I said previously it is not relevant to the club's ability to spend on players which is directly linked to revenues only. It is also not a simple ownership versus renting issue as we can see from other clubs - Man City and Newcastle.

Squad costs are related to success and success further boosts revenues. West Ham are becalmed relying much more on broadcasting income than many other clubs 

[WhereDoesThisEnd]

Guys, the closest comparison to us in the Sullivan debate is Spurs, because a big part of this discussion is stadium ownership versus renting. In a similar timeframe both clubs moved into stadiums worth hundreds of millions just miles apart in London. The structural difference is simple: Spurs fund and maintain their stadium, we rent ours. That creates a £30m+ annual cost gap in our favour before extra revenues achieved by Spurs are factored. Ownership can bring higher revenues, but those revenues first have to bridge huge finance and maintenance costs. So whether people like Sullivan or not, the stadium decision itself wasn’t irrational. It was a low risk financial model. The fair criticism is whether he maximised the fan experience and football side off the back of that saving.

[John Drake]

I'd say that depends what scenario you are comparing it with. I was referring only to continuing to lease the London Stadium under an improved deal. Not building a brand new stadium. 

Under PSR having low operational costs was a bonus - although capital expenditure on infrastructure could be excluded.

Under squad cost ratios, only revenues are taken into account. Operating costs are irrelevant. 

I understand that some form of profitability test will remain but it is not clear how this will work (at least to me). 

[southbankbornnbred]

Southbank
The question is not whether ownership is better than renting, it is whether we could realistically earn more per year from owning than the 30 to 40 million annual saving we effectively have compared to the ownership costs clubs like Spurs or Everton carry.
I am not convinced Sullivan and co could deliver that uplift. A different ownership profile, a Ryan Reynolds type with a strong commercial vision, maybe could. But that is a different debate.

To me Sullivan is not some cartoon villain. He is a businessman making decisions he sees as rational. The issue is more that he lacks the ambition and fan sensitivity supporters want from a football owner.

He clearly enjoys the football side, chatting to agents, scouting, chasing the next prospect, but there has never been a consistent football structure or DNA. We swing from one style to another and end up rebuilding squads on repeat cycles.

Ironically he sometimes reacts to fan pressure on managers, which is strange given he ignores fan sentiment in most other areas.

Owning versus renting is not black and white. They are just different models. Ours made a lot of sense when we were top six and winning in Europe, and it still has logic as a lower risk approach today.

 

 

We don't make a £30m to £40m "saving" right now, mate. You seem to WANT to misunderstand the situation. But that's your right. You just keep backing a heavily restrictive financial model that almost no other club is tied to. More than that, you just keep backing the outcome that gives us easily the worst experience for fans anywhere in the top divisions.

I love West Ham to bits. But I fell in love with attending matches during a dull draw between us and Manchester City in the early 80s - because our crowd was raucous, punk and directly engaged with the action in a way that almost no other football crowds were.

If I were a young and impressionable kid now, I probably wouldn't choose to support West Ham. Because attending home matches is an abysmally shit experience for anybody seeking something visceral. For me, that's what the wankers who made that move have created. If you like the gently reheated diarrhoea they've served up, all power to you. 

[WhereDoesThisEnd]

John

Full stadium control only wins if it adds 35 million a year in real net revenue. Naming rights, concerts and hospitality sound big, but once you total it up and strip costs out, very few clubs actually reach that level.

[John Drake]

Neither Manchester City nor Newcastle own their stadiums. The Etihad is owned by Manchester City Council and St James' Park by the Freeman of Newcastle. Both clubs have long term leases for their grounds. But importantly they have opertaional control allowing them to profit from sponsorship deals and any non-football events held at the stadiums.

GSB just wanted the cheapest deal possible. Perhaps that wasn't such a big deal at the time but now that transfer fees and wages is directly tied to revenues it is a terrible constraint on the club's spending.

[threesixty]

I also think "other clubs" like Everton etc have done this on vastly cheaper land than what we'd be trying to do it on, plus building costs in London are insane.
Interest rates are not great right now either, so we will probably pay a third more than the Spurs fixed rate was. 
Unfortunately, the borrowing coupled with GSB's inability to run a successful football side on the pitch for a sustained period means its just the most financially risky thing we could possibly do.
Also, just because Spurs get Beyonce etc doesnt mean we would attract the same amount of big name revenue generating events. There's only so many stadium level events that are going to happen in the capital in any year anyway. So you're competing with Spurs, Arsenal, Wembley etc.. naturally the revenue available for all venues will decrease if stadium supply increases right?

I just think we are snookered. I dont even like the idea of the Govt selling us the stadium because I know what GSB will do with it. At best redevelop with a load of apartments around it but skimp on the actual football stuff, at worse they'd sell the whole thing for flats and put us miles away from the east end of London in some other crap stadium built on the cheap.

I don't trust them to do the right thing for this club at all. No matter what they have been given.
I just wish they would sell the club to someone sensible.

 

[WhereDoesThisEnd]

Southbank
The question is not whether ownership is better than renting, it is whether we could realistically earn more per year from owning than the 30 to 40 million annual saving we effectively have compared to the ownership costs clubs like Spurs or Everton carry.
I am not convinced Sullivan and co could deliver that uplift. A different ownership profile, a Ryan Reynolds type with a strong commercial vision, maybe could. But that is a different debate.

To me Sullivan is not some cartoon villain. He is a businessman making decisions he sees as rational. The issue is more that he lacks the ambition and fan sensitivity supporters want from a football owner.

He clearly enjoys the football side, chatting to agents, scouting, chasing the next prospect, but there has never been a consistent football structure or DNA. We swing from one style to another and end up rebuilding squads on repeat cycles.

Ironically he sometimes reacts to fan pressure on managers, which is strange given he ignores fan sentiment in most other areas.

Owning versus renting is not black and white. They are just different models. Ours made a lot of sense when we were top six and winning in Europe, and it still has logic as a lower risk approach today.

[,]

It’s wishful thinking regarding a new stadium but the club is crying out for a state of the art training facility.

[SurfaceAgentX2Zero]

Capital spending on stadiums, training grounds and academies is excluded from FFP loss calculations. That’s true.What it doesn’t mean is that the cash magically exists to spend on players.If you build or own a stadium, the money still has to be paid in real life through loans, interest, maintenance and long term upkeep. FFP might ignore it, your bank account doesn’t.Our model doesn’t get that accounting benefit because we rent. But in pure cash terms, paying 3-5m rent versus tens of millions a year in financing and maintenance can actually leave more real money available for the football side.So the question isn’t “own vs rent,” it’s whether the extra stadium revenue would genuinely exceed the extra stadium costs. If it doesn’t, renting can be the more efficient model.FFP is an accounting rule. Cashflow is reality.

 

Yes, mate, everybody in the world now knows how it operates. And almost every major football finance voice will tell you it means that owning your stadium is a huge benefit. Because what you are continually ignoring is that when you own your ground, you retain pretty much ALL revenues - in a way that our particular rental model will never allow. And all clubs are now getting wise to expanding those revenue streams. But we are forced to profit-share on most non-ticket revenue streams.

So we are now hindered in growth terms.

West Ham are the only club who seem to think that’s not he case. And even we have made behind-the-scenes inquiries about buying the stadium.

Anyway, it’s becoming a circular argument. You can take a horse to water…

The thing is, while nobody else rents their stadium, nobody else has been offered such insanely good terms on which to rent. So, you still have to do WDTE's calculation. I'll wager the benefit of owning all the revenues doesn't outweight the benefit of the LLDC's bonkers lease.

[,]

Of the possible options regarding the stadium three come to mind. Stay as we are, build our own new home or await the opportunity to acquire the place we rent.

It’s clear to me that a new build option is not under consideration and the likely outcome will be the club taking over the stadium becoming the landlord.

[southbankbornnbred]

Capital spending on stadiums, training grounds and academies is excluded from FFP loss calculations. That’s true.What it doesn’t mean is that the cash magically exists to spend on players.If you build or own a stadium, the money still has to be paid in real life through loans, interest, maintenance and long term upkeep. FFP might ignore it, your bank account doesn’t.Our model doesn’t get that accounting benefit because we rent. But in pure cash terms, paying 3-5m rent versus tens of millions a year in financing and maintenance can actually leave more real money available for the football side.So the question isn’t “own vs rent,” it’s whether the extra stadium revenue would genuinely exceed the extra stadium costs. If it doesn’t, renting can be the more efficient model.FFP is an accounting rule. Cashflow is reality.

 

 

Yes, mate, everybody in the world now knows how it operates. And almost every major football finance voice will tell you it means that owning your stadium is a huge benefit. Because what you are continually ignoring is that when you own your ground, you retain pretty much ALL revenues - in a way that our particular rental model will never allow. And all clubs are now getting wise to expanding those revenue streams. But we are forced to profit-share on most non-ticket revenue streams.

So we are now hindered in growth terms.

West Ham are the only club who seem to think that’s not he case. And even we have made behind-the-scenes inquiries about buying the stadium.

Anyway, it’s becoming a circular argument. You can take a horse to water…

[eusebiovic]

Where the hell is Mad Dog or Vexed to put this utter knob cheese in their rightful place?

I just don't have the tools

[WhereDoesThisEnd]

Capital spending on stadiums, training grounds and academies is excluded from FFP loss calculations. That’s true.What it doesn’t mean is that the cash magically exists to spend on players.If you build or own a stadium, the money still has to be paid in real life through loans, interest, maintenance and long term upkeep. FFP might ignore it, your bank account doesn’t.Our model doesn’t get that accounting benefit because we rent. But in pure cash terms, paying 3-5m rent versus tens of millions a year in financing and maintenance can actually leave more real money available for the football side.So the question isn’t “own vs rent,” it’s whether the extra stadium revenue would genuinely exceed the extra stadium costs. If it doesn’t, renting can be the more efficient model.FFP is an accounting rule. Cashflow is reality.