West Ham well placed to avoid ‘crisis’ as huge relegation clauses revealed
West Ham have given themselves a chance of avoiding relegation to the Championship following their victory over Tottenham.
West Ham secured a dramatic 2-1 win over Spurs on Saturday (17 January), with Callum Wilson grabbing an injury-time winner in north London.
However, Nuno Espirito Santo’s side are still five points from safety in the Premier League relegation zone.
It has been revealed West Ham could lose more than £60million in revenue if they are relegated this season.
In a key development, The Athletic reported on 13 January the Hammers’ first-team squad have 50 per cent salary reduction clauses in their contracts in the event they are relegated to the Championship.
Why relegation clauses are ‘critical’ for West Ham
Former Man City financial adviser Stefan Borson exclusively told Football Insider the relegation clauses will ensure West Ham avoid a “complete crisis” if they lose their Premier League status this season.
However, West Ham’s board are keen to continue spending after signing strikers Taty Castellanos and Pablo Felipe for a combined £45m this month.
Speaking exclusively to Football Insider about the relegation clauses, Borson said: “I mean, if it’s true, it’s the single most critical bit of data coming out of the club in years. If there’s one thing that the relegated clubs need, it’s a 50 per cent pay cut on relegation.
“Because what it means is straight away, when you get the 50 per cent pay cut effectively on broadcast revenue, the two things kind of counterbalance each other and it’s transformational.
“It goes from the club being in complete crisis if you don’t have the relegation clauses and having to fire sale huge numbers of players not just to bring in the fees but also to get the wage bill down, and you have to do it quickly.
“It’s a buyer’s market and it becomes a very difficult situation versus a 50 per cent salary reduction, which calms the situation down in terms of planning.”
West Ham are yet to publish their accounts for last season, but their wage bill stood at £161m in the 2023-24 campaign.
Why West Ham are ‘well-run’ despite fan protests
Borson insisted West Ham are well-run from a business perspective despite their dip in performances on the field.
“It’s not a surprise that they’ve got that clause because they are generally well-run despite what West Ham fans think,” said Borson.
“They’re well-run from a business perspective if not on the footballing side, but it is massively significant.
“You only have to look at Burnley’s financial results over the last few years, where what you’ve seen is they go up and down, but the bottom line doesn’t materially change because they’ve got this counterbalance between the wage bill reducing and the broadcast revenue reducing.”
West Ham’s next fixture sees them take on Sunderland at the London Stadium on Saturday (24 January).
For more West Ham and exclusive news, follow us on Facebook or join our brand new WhatsApp Channel for instant updates to be sent straight to your phone.