Chairman's Statement And Financial Review


The year under review was a most difficult one for the club and, whilst we completed our 39th season in the top flight of English football during the 45 seasons since 1958-59, we won just 3 of our opening 24 games in the Premier League and did not win at home until 29 January 2003.  Sadly, despite winning 6 and drawing 4 of our last 11 games, the team was relegated with 42 points (the highest number of points achieved by a team relegated from the Premier League).

At the end of the 2000/01 season I reported that the club had only twice, in 75 years of League football, suffered a worse home record.  Unfortunately our performance during the 2002/03 season was even worse than that for 2000/01.  Ironically the last 6 seasons included 4 top half finishes (which matches our best ever performance) and 2 seasons with dreadful home records.  The overall results for both seasons were almost identical.

SeasonPlayedWon DrawnLostForAgainst PointsPosition2001/023810121645504215th 2002/033810121642594218th

Whilst a 7th place finish followed the 2000/01 season, the 2002/03 season ended in relegation.  Both seasons led to a change of manager.

Glenn Roeder left the club on 24 August 2003 and I would like to thank him for his efforts on our behalf.  Glenn managed the club honestly and diligently and, perhaps, in view of his 18th place finish with the same number of points as Harry Redknapp achieved when finishing 15th he can be seen to have been unfortunate.  Injuries to key players, especially Paolo Di Canio and Fredi Kanoute, combined with the newly introduced transfer windows to deliver catastrophic blows to both the manager and the club. Glenn showed great courage and dedication when he returned at the beginning of the season after a serious operation and we wish him every success in the future.

May I also thank my board colleague Trevor Brooking who readily stepped in as caretaker manager following Glenn's illness, continued Glenn's excellent run of results, and almost kept the team in the Premier League with 7 points from the team's final 3 games.   Following the termination of Glenn's contract Trevor once again stepped in as caretaker manager, this time more reluctantly, and achieved 21 points from 10 games - losing just one game.

Our 10th manager, Alan Pardew, was appointed on 10 October 2003.  Alan played 443 games for Crystal Palace, Charlton Athletic and Barnet and has managed Reading since October 1999.  I would like to extend a warm welcome to Alan and wish him every success in his efforts to bring Premiership football back to the Boleyn Ground.

Off the pitch, season ticket sales increased to record levels and attendances averaged 97% of stadium capacity.

On 12 September 2002 we welcomed HRH Prince Harry to the Boleyn Ground as part of a day of engagements to mark his 18th birthday.

Our third Royal visit within the space of 12 months took place on 28 April 2003 when HRH The Duke of York unveiled the "Champions" sculpture commissioned by the London Borough of Newham, members of our local community and ourselves.

Operating Results

In order to provide more information than has previously been available Nick Igoe, our Finance Director, has prepared a financial review and I do hope that both shareholders and supporters will find the additional information helpful.

I will deal with two issues which have been raised following the team's relegation from the Premier League.

I have been asked if the board failed to anticipate the effects of the transfer windows and invest in the squad in the summer of 2002.  The view that we failed to anticipate the effects of the transfer window is certainly true to some extent but fails to take into account the financial challenges we faced in the summer of 2002.  Firstly, we had to fund the second tranche of the transfer fees incurred in 2001 in respect of Hutchison, James, Repka, Schemmel and Labant.  Nick Igoe explained at the AGM that borrowings would escalate as a consequence of our outstanding transfer commitments.  In financial terms those commitments in the summer of 2002 were £9m.  We then incurred a further £1m in transfer and agents' fees and transfer levy as a result of signing Sofiane, Van Der Gouw, Breen and Cisse.  Those players added £2m to the 2002/3 wage bill and contract renegotiations with Sinclair, Lomas, Pearce, Schemmel, Moncur and Winterburn added a further £2m bringing our total additional commitments for the season to £14m.  We then suffered greatly by freezing ticket prices for the second year running when some of our rivals were increasing ticket prices by up to 19%.  Watching this activity were, of course, our banks, with whom we were negotiating throughout the summer of 2002, with borrowing facilities of up to £48m during the course of the 2002/3 season and feeling most reluctant to see the additional expenditure go beyond £14m. In the end the figure moved on to £17m when we made our January acquisitions.

I have also been asked if the financial effects of relegation could have been handled better.  Whilst there is, of course, always room for improvement I do not believe we could have done much more to mitigate the financial position. At a recent conference a presentation was made by Kroll Limited (who are one of the country's leading insolvency practitioners and acknowledged experts in football financing and restructuring) entitled "Re-structuring for Football Business".  During their presentation Lee Manning, one of the firm's senior partners, advised his audience that West Ham United's financial approach following relegation was an example of "getting it right".  I wrote to Mr Manning asking if I might include his comments when corresponding with supporters.  He replied as follows:-

"Thank you for your letter of 9 October 2003 and for enclosing your statement to your shareholders and supporters.  I have also read the summary you have prepared for the supporters and confirm that not only did I state that West Ham United's financial approach was an example of "getting it right" but that West Ham United had recognised that the alternatives of not seeking to confront their financial obligations head to head and to cut their costs accordingly would be tantamount to "wrongful trading".  I am firmly of the view that no matter how bitter a pill the club was forced to swallow, the underlying objective of achieving the survival of West Ham United plc as a going concern was of paramount importance. What you have done by embracing the financial constraints following the club's relegation from The Premier League can only be upheld as an example to be followed by others.  The directors of West Ham United have acted in a professional manner with regard to the best interests of the club's creditors and were, in my opinion, correct in avoiding the dangers of gambling the club's future success on the playing field against its financial viability and arguably its ultimate survival."

The steps we took during the close season were painful for supporters and the board but fundamental for the long-term future of the club. 


During the season the team achieved results in 22 of our 38 League games compared with 23 results in 2001/2 season.  Unfortunately too many drawn games ended in relegation to the Nationwide League.

Three players - David James, Joe Cole and Trevor Sinclair - were selected for England's World Cup squad that competed in the Finals Tournament in Japan and South Korea.

Three players - Jermain Defoe, Stephen Bywater and Michael Carrick - were regularly selected for the England Under-21s squad and Glen Johnson regularly captained the England Under-18s squad.
Christian Dailly and Don Hutchison won Scottish caps and David Noble was selected for the Scotland Under-21s squad.  Steve Lomas and Grant  McCann won Northern Ireland caps.  Other internationals included Gary Breen (Republic of Ireland), Shaun Byrne (Republic of Ireland Under-21s), Richard Garcia (Australia Under-21s).  I would like to take this opportunity to congratulate all these players on their achievements.

The club's under-19s won their FA Premier Youth Academy League and the under-17s finished third in their League.

The England versus Switzerland Under-20s international played at the Boleyn Ground on 12 December 2002 was followed on 12 February 2003 by the first ever full international to be played at our ground when England met Australia.  We also played hosts to the FA Vase Final between AFC Sudbury and Brigg Town on 10 May 2003.

Social Responsibility

A strong sense of social responsibility is part of West Ham United's heritage.  Today it is reflected in our long-term commitment to the people who live in Newham and the neighbouring boroughs as well as reaching out further afield to meet the needs of our expanding supporter base. 

Success through inclusion sets standards for corporate social responsibility and Roger Morgan, Mick King, Jo Robson and their colleagues have, once again, forged important and successful partnerships with sponsors and fund providers, all of whom acknowledge the fact that West Ham United has a key role to play in delivering community programmes which increase participation in sport for youngsters at grass roots level.

An example of such a partnership will be seen when we open our new community centre in Beckton.  The 3½ acre freehold site contains offices, dressing rooms and a full size artificial football pitch with floodlights.  The centre was developed in partnership with the London Borough of Newham and Fairview Homes and I would like to thank both for their commitment to the club.

I would also like to take this opportunity to thank our players who have taken part in various community events during the year with great enthusiasm and commitment.  The players' involvement motivates and encourages all of the youngsters in attendance.

A summary of our current community projects is included later in this report.

Retail and Commercial Operations

I reported last year on the achievements of West Ham United Sportswear Limited, which had maintained its turnover during a difficult time for the sports goods industry with tough trading conditions and heavy discounting.  Trading conditions did not improve during the year to 31 May 2003 and the board decided to rationalise the retail operation and in future trade from just the new stadium superstore (which has been well received with turnover well ahead of expectations), the smaller unit in the Barking Road (on match days) and the shops at the Lakeside and Bluewater shopping centres.  In line with this strategy our kit manufacturing agreement with Reebok incorporates a percentage royalty on our branded merchandise sales throughout the UK rather than restricting our income to sales from our own retail outlets.

West Ham United Hospitality Limited, which operates the catering facilities and the Quality Hotel at the stadium, benefited greatly from the completion of the Dr Martens stand and the resultant stable working environment.  Turnover almost doubled and the company was able to make a substantial contribution to the operating profits of the group.  My thanks to David Thorpe-Tracey and his team who have worked extremely hard to build up the reputation and profitability of their company.

The club clearly suffered a major setback when relegated but swift attention to our finances, magnificent backing from our supporters and a realistic approach from our banks has ensured that the setback did not turn into something far worse.  To have season ticket sales of close to 18,000 and average gates in excess of 30,000 for matches in the Nationwide League speaks volumes for the club and its supporters.

I said in my letter to season ticket holders that "if we sadly lose our fight for Premiership survival then the battle for our club ……. will begin …..".  I believe that battle has been won.  The second part of my sentence suggested that "….. we will all need to work towards a speedy return to the Premiership."  I cannot pretend this task will be an easy one but with our support, an ambitious new manager, some of the best players in the Nationwide League, properly structured finances and the next batch of youngsters waiting impatiently to emerge from "The Academy" we have every chance of succeeding.


I would like to thank Stephen and Max Griggs of R Griggs Group Limited for their past sponsorship and welcome Robbie Cowling and his colleagues from Jobserve following our new sponsorship agreement with Robbie's company.  We very much look forward to working with our new sponsors in the years ahead.

I would also like to welcome Reebok, our new merchandise supplier, and thank Fila (UK), our previous supplier, for an excellent relationship which spanned the previous four seasons.

We continue to work closely with the London Borough of Newham and I would like to thank the councillors and officers of Newham for their continued advice and assistance.

May I also thank my fellow group directors, our management team and all our staff for their hard work throughout, what turned out to be, a most difficult year.

Finally, and most importantly, may I thank every one of our supporters for persevering with the club after such a disappointing season.  As I have said elsewhere, I know we sometimes test your patience and I apologise for that, but collectively we do have an institution that is very special and I have no doubt whatsoever that we have many great seasons ahead of us despite the disappointment of last season.

Terence Brown

31 October 2003

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