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Filed: Thursday, 3rd September 2009
By: Staff Writer

West Ham's latest set of accounts have revealed that the club lost a massive £37million in the year ending 2008.

United CEO Scott Duxbury told KUMB.com earlier in the summer that the forthcoming set of accounts would be a disaster - but the extent of the clubs financial problems will surely surprise even the most pessimistic of supporters.

Despite a steady string of player sales in the past 18 months - including Bobby Zamora (£5.3m), Anton Ferdinand (£8m), George McCartney (£6m), Matthew Etherington (£3m), Craig Bellamy (12m) and now Savio (£3m) and James Collins (£5m) - the Hammers are still reported to be in serious financial trouble, with the club's full liabilities said to total around £100million, according to a report in today's Guardian.

Additionally it is reported that West Ham could have been forced into administration earlier this year had the club's five bankers - who, The Guardian claim, lent United some £20million to cover losses incurred during 2008 - not agreed to allow United extra time to repay further debts after they breached debt covenents.

Financial Director Nick Igoe, who was also Financial Director throughout the Gudmundsson/Magnusson reign said:

"The scale of operating losses and wages caused the group to breach certain banking covenants in 2007-08. Although the group's banking syndicate [later] waived these breaches, a business strategy which relies on the goodwill of the group's bankers to waive covenant breaches is fundamentally flawed."

The Icelandics are reported to have allowed the club's wage bill to rise to an astonishing £63million - just £18million shy of the club's turnover for that year. That figure included a combined cost of around £20million for just three players - Freddie Ljungberg, Craig Bellamy and Kieron Dyer - as Eggert Magnusson went on a crazy spending spree that eventually cost him his position at the club.

Igoe added: "Whilst creditable, the 10th place finish [in 2007/08] has to be viewed in the context of a £21million increase in wages and a further £15.7million net investment in transfer fees, following the £29.9million investment in the previous season. Again ignoring exceptional expenses, the group recorded a loss before player trading and after interest of £7.4m."

The sale of James Collins to Aston Villa on transfer deadline day was the last straw for many fans who have now seen the club wave goodbye to more than 25 players since the end of the 2007/08 season. Today's revelations will add fuel to the fire of those suggesting that the popular defender was sold to appease the club's bankers - which is something that the club's Non Executive Chairman Andrew Bernhardt said would not happen just three months ago.

So whilst many Hammers fans may have thought that the worst was over, it is now becoming clear that further sales could be necessary in order to keep the club afloat.

Long gone: the most notable departures since the end of the 2007/08 season

June 2008: Nobby Solano (free).

July 2008: John Paintsil (Fulham, £1m); Bobby Zamora (Fulham, £5.3m); Richard Wright (free).

August 2008: Freddie Ljungberg (free); Anton Ferdinand (Sunderland, £8m); George McCartney (£6m).

January 2009: Matthew Ettherington (Stoke, £3m); Craig Bellamy (Man CIty, £12m); Hayden Mullins (Portsmouth, £1m).

June 2009: Diego Tristan (free); Walter Lopez (free); Lucas Neill (free); Lee Bowyer (free); Kyel Reid (free); Tony Stokes (free); Jimmy Walker (free)

August 2009: Savio Nsereko (Fiorentina, £3m+player); James Collins (Aston Villa, £5m).

Total sales since June 2008: £44.3million

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