A cash injection from the West Ham [shareholders](https://www.claretandhugh.info/west-ham-shareholders-will-need-to-inject-cash/) may be the only hope to save West Ham from relegation this season.
The Hammers appear to be in deep relegation form at the moment, and Nuno seems powerless as it stands to resolve the deep-rooted issues with the current unbalanced squad.
Backing the manager in January to rebuild the squad seems to be the only obvious lifeline to avoid the drop, but it won’t come cheap in the winter transfer window when prices are seriously inflated.
With £100m of losses last season and a considerable loss forecast this season, the board will need to inject new capital to balance the books and comply with financial regulations.
The shareholders last injected cash in the form of a rights issue in 2020 when they bought £30m of shares, which they already owned, to shore up finances during the pandemic.
There was another rights issue and an injection of cash in 2021 when Daniel Kretinsky acquired 27% of the parent club. 20% of those shares came via another rights issue, with Kretinsky paying £125m of cash, with the other shareholders diluting their shareholding. The remaining 7% came from other existing shareholders for £43.75m.
In the last four years, there has been no cash injection from the shareholders.
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Current PSR regulations allow owners to inject up to £90m over three years to cover losses up to £105m
Shareholders can inject unlimited funds into a Premier League club as it stands, provided the money is structured as “secure funding” and is used to cover the club’s losses, allowing them to exceed the £105 million PSR (Profitability and Sustainability Rules) loss limit over a three-year period. The club must submit financial plans for the next two seasons to demonstrate how they will manage their finances and stay within the rules.
Next month, the Premier League clubs will vote to ditch the current PSR rules and replace them with SCR and TBA, which would limit the way cash injections from shareholders are treated in the top-flight league.
In the proposed world of Squad Cost Ratio (SCR), this ‘secure funding’ from owners (which comes in the form of equity investment from shareholders) does not count as football revenue, and therefore cannot cover excessive spending. In this case, clubs would have to resort to increasing revenue in other ways if they want to increase spending.
Any proposed change is unlikely to come into force until next season, meaning the board could have one last chance to inject cash and overspend this season before the rules change.
Over the summer, a senior club source told Claret and Hugh, “_**We’ll inject funds if needed/allowed/solves a problem”**_