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Relegation Will Cost West Ham £46m

The football economy had an article today on what relegation means to West Ham financially. It does not paint a rosy picture if you are a West Ham fan.

More than half of West Ham’s 2009-10 turnover of £71.7m came from Premier League revenue distributions. The minimum £40m of television and central sponsorship income for the bottom club (up from £31.3 last year) this season will be exchanged for a £16m parachute payment season next.

So to put that another way, West Ham will make at least £26m less next season than this season due to being in the Championship rather than the Premier League.

Gate receipts, commercial and merchandising income, worth £33.1m in the past financial year, will also drop. Matchday, commercial and sponsorship revenues could fall by as much as £20m.

In addition to a reduce in Premier League revenue, West Ham can expect to earn £20m less from sponsors and gate receipts than they did this season.

Add that to the £26m drop in Premier League distributions and it looks like relegation will cost West Ham about £46m. That is a massive amount of money.

West ham will have to gut their team this summer if they want to get anywhere near break even next season. The problem with that, is that if the Hammers sell all their best players, they will be in no condition to challenge for promotion next season.