The purchase of a 50 per cent stake in West Ham United by David Sullivan and David Gold in a deal that valued the club has been generally welcomed. West Ham fans see them as one of their own and hope that a troubled period for the club under Icelandic ownership will now come to an end. It offers a rare example of a Premiership club reverting to British ownership. There were other potential puchasers, including one from Malaysia, and there were reports that the Icelandic owners were worried about the association of Gold and Sullivan with the adult entertainment business.
The purchase of a 50 per cent stake in West Ham United by David Sullivan and David Gold in a deal that valued the club has been generally welcomed. West Ham fans see them as one of their own and hope that a troubled period for the club under Icelandic ownership will now come to an end. It offers a rare example of a Premiership club reverting to British ownership. There were other potential puchasers, including one from Malaysia, and there were reports that the Icelandic owners were worried about the association of Gold and Sullivan with the adult entertainment business. However, Iceland hardly looks pure as the driven snow after the financial crisis. It is generally acknowledged – if not all by Birmingham fans – that Gold and Sullivan did a good job at Birmingham City, now riding high in the Premiership. Karren Brady, who was chief executive at Birmingham, has been appointed vice-chairman and may in time have a larger role at Upton Park.
David Sullivan admitted that the deal ‘made no commercial sense’. Of the £50m they paid for the club, Icelandic bank Straumur and its partners will receive about £10m, with the remainder used to reduce debts estimated at £110m and to provide workng capital. Their willingness to take on full responsibility for the club’s debt was a key consideration for Straumur. The purchasers must exercise an option to buy the remaining 50 per cent if the club meets certain financial targets in relation to revenue and debt within the next four years. Sullivan has predicted that the next set of accounts will show a loss of £40-£50m and has not ruled out selling the naming rights to Upton Park, also known as the Boleyn Ground. The debts are the result of excessive spending on wages and transfers and borrowing against future income. The club owes Sheffield United more than £20m for breaking rules on players’ third-party ownership, there are unpaid transfer fees to settle and also a severance payment outstanding to former manager Alan Curbishley.
The new owners have targeted qualifying for the Champions League within seven years and also want to move to the Olympic Stadium after the 2012 games, which might not be popular with all West Ham fans, particularly given that a running track will surround the pitch. Olympics minister Tessa Jowell has opened the door to a revised bid from the club to move into the stadium, but made it clear that there could be no deal without ‘money on the table’. Three years ago the government rejected plans for the club to buy or rent the stadium. The Boleyn ground is three miles from the Olympic stadium and the ideal solution for West Ham would be a similar one that saw the 2002 Commonwealth Games stadium rented to Manchester City by the local authority. It is thought that the costs of moving a football club into the £540m stadium would be £150m and another £100m if the running track was removed which would increase its attractiveness for football but would mean that it would not be available for athletics. Meanwhile, Gold and Sullivan have to stabilise the club and ensure that it is not relegated which would be a disaster.