West Ham United have been issued with a dire warning about their immediate future where a “fire sale” of players could take place in the event of relegation to the Championship.
The Hammers are currently 18th in the Premier League and battling against the drop. It would be a dreaded outcome to deepen the financial troubles at the east London outfit, where it has been revealed that a loan of £124m has been secured from Rights and Media Limited, a company which assists clubs who have been refused extra funding from traditional banks.
Cheshire-based RMF borrows funds from opaque offshore companies in order to lend to football clubs. It currently has just one director, David McKnight. Everton had previously been a debtor for £225m to RMF – a sum which also accrued approximately £30m in interest – until their takeover by the Friedkin Group in 2024.
West Ham, who reached the FA Cup quarter-finals with a win over Brentford on Monday, could, in a worse-case scenario, also risk losing its ownership of properties such as the club’s training ground at Chadwell Heath.
In the short term, relegation would mean a very serious likelihood of departures for prize assets such as Crysencio Summerville, Jarrod Bowen, Aaron Wan-Bissaka and Mateus Fernandes, who have a combined, current market value of around £100m. All four are on long-term deals with the Hammers. Others, such as Lucas Paqueta and Mohammed Kudus, have already been sold this season.
“They would have to enter the Championship with a much reduced squad, sell their best, most expensive players”, Paul Quinn, a football finance and governance expert, told The i Paper. “They’ll end up with a younger squad with less established players.
“They have to reduce costs, even if they avoid relegation. They cannot continue to spend more money than they earn – the squad cost has to be reduced.
“Whilst RMF have charges over the properties and land, it’s most likely West Ham would have a massive fire sale of players to reduce their loan and they would have to use their parachute payments if relegated to pay down the debt.”
Despite the team winning the Europa Conference League in 2023, West Ham chairman David Sullivan and the board have come under sustained criticism from supporters in recent years for their running of the club, where it is spending more money than it earns, mainly on player salaries and operating costs.
And Quinn has also warned of interest payments on the £124m loan amid the Hammers’ difficulties on and off the field.
He said: “There’s no doubt that in recent years the club has been terribly run and poor commercial and footballing decisions have been made.
“The reason clubs need this type of funding is relatively simple. The clubs are spending more money than they earn.
“They spend that money on wages, transfers and running costs. The shortfall can only be made up by selling assets (players), the owner putting more money into the club, or in the absence of either by borrowing from non-traditional lenders.
“Based on the loan charges Everton paid, the interest rate is likely to be the UK base rate plus 5 per cent. Currently, the base rate is 3.75 per cent, so it’s likely West Ham are paying around 8.75 to 9 per cent. That’s likely to produce an interest cost of £10-11m a year.”
According to previously released documents relating to offshore companies, the case of Everton’s RMF debt led to Michael Tabor, a Monaco- and Barbados-based racehorse owner and leisure entrepreneur. However Quinn feels it is very unlikely Tabor would be interested in a possible West Ham takeover.
He said: “I very much doubt it to be honest. A likely buyer would be Daniel Kretinsky who is already a significant (West Ham) shareholder.
“If I was a West Ham fan I would be asking why are shareholders incapable of or unwilling to fund the losses caused by the poor business and football decisions they have made. If they are not willing to fund the losses or find an executive team to turn the club around, the only option is to sell to owners who can.”
In a wider sense, Quinn shares the concerns of football fans when companies such as RMF are the beneficiaries with money lost to the game.
“It’s hugely concerning to all football supporters that so much money leaves the game because clubs spend more than they earn,” he said. “They don’t have owners who are prepared (or able) to fund the losses themselves.”
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