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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by B Knipes
09:04PM 3rd Sep 2009
''Yeah we lost loads of money, and its all doom and gloom. But can anyone honestly say the players that we have sold are better than the boys coming through the youth academy or the signings Zola's made? Bar James Collins, Lucas Neill and Craig Bellamy the positions have been improved with the likes of Valon Berahmi, Jack Collison, Scott Parker, Luis Jiminez....etc.
And not too mention the drastic improvement of the whole team under Zola, notably Carlton Cole. In Zola and Clarke we've got the best managerial set up we've had in years. The recession's hit us hard, granted, but we will be sold on soon. The wage bill's been slashed, deadwood's been shifted and it's the first transfer window in ages we haven't been stripped of all our good players.
We were effectively reposessed from BG by Straumer and if they start losing money on us they'll sell us to re-coup some money back. Watching us crash and burn serves them no purpose they will try to make us look an attractive buy for the next owner to get as much money back as possible.
We're playing some great football. I just can't see us going under.''
08:18PM 3rd Sep 2009
''The club needs new owners and sharpish. Surely if a club like Portsmouth (no disrespect) is of interest to foreign capitalists then West Ham should be an attractive proposition with its London location, large fan base and good manager. It's also an opportunity to sell shares to fans once more in order to raise funds.
Unless there is a change of owner, Zola will be off, the team will plummet and another generation of talent will be flogged to settle the debts. ''
05:57PM 3rd Sep 2009
''All I can say is that the sooner we find a buyer for the club the better. Lets face it, who wants to see all our prized assets leaving the club come January? It's crap to think all the hard work us Hammers do to see little or no results, we deserve better signings and more of them.
I think Clarkey and Zola have been an absolute breath of fresh air since joining the club, if only we had the financial backing to support them then we could do wonders. Let's think of this... What if Zola and Clarke were to leave because they were fed up of the financial mess we are in, any club would jump at the chance of having the pair. So I think the sooner we get the greedy poor 'business' men out the better. With them gone then we could challenge for the top six!''
by Terry Bonds
09:17AM 3rd Sep 2009
''This would be the worst period of West Ham's history if it were not for the fact that the majority of those players were i) rubbish, ii) crocks, iii) bottle jobs - there are a few I'd rather still have like Collins, maybe Etherington. However our academy youngsters have stepped up, we've got a few more youngsters from other teams and we've done an amazing bit of business finding and signing Ilunga. We did look weak up front but Hines showed he is very much of the Defoe mould against Millwall and we've hopefully signed another Di Canio. If the continual sales have steadied the financial ship then there is no reason for all this concern.''
07:56AM 3rd Sep 2009
''Looking at the players sold, it is becoming clear that we are also running out of assets to sell beyond a first XI and are now having to sell them too, like James Collins for a paltry £5mil (he is better than Anton Ferdinand sold for £8mil). It seems ridiculous that it wasn't so many years ago we were selling the likes of Rio Ferdinand, Lampard, Cole, Carrick, Defoe etc etc etc and thinking that we must at last be financially stable.
Tony Carr has worked wonders at raising talented youngsters but he is by far and away the most important person at the club. If he hadn't still been producing talent like the current crop of Tomkins, Noble, Stanislas, then we would barely have a first team and we would have gone under financially ages ago. Peter Storrie at Portsmouth has said they are now the team in the premier league with the least debt, but look at the state of them now in order to get there - nailed on relegation fodder. Sadly it would seem that West Ham are not far behind.
The club has been hit by many problems from the Tevez decision to injuries, neither of which could have been foreseen, but if people at the club are simply going to manage what is essentially our money, poorly, then they should be brought to book.''
by Tony Jones
07:35AM 3rd Sep 2009
''Man Utd, Liverpool and Arsenal have £2.4billion of debt between them. So no one should panic. We will have got the Premier League money for this season (50 mill ) and the money from the 2009 sales in this article is another 24 mill. Also all those players (outs in 2009) are off the wage bill meaning more savings.
Strumur said they had a two-year plan for the club to sort out the mess and I believe we will be fine. Zola has hardly spent any money but it was reported that he will have most of the Premier League cash at his disposal next year. This means we are probably on track to be debt free sooner than was originally planned. This was probably possible because of Bellamy leaving, which wrote of around a quarter of the debt itself, plus the savings on his wages.
We must trust in Strumur and CB Holdings to sort out a mess they did not want or create. Get behind Zola and the players, we will be fine.''
by Adam mckean
06:55AM 3rd Sep 2009
''Again another reason why our club is a joke, GET OUT AND SELL THIS CLUB before it's ruined.
I am seriously worried and think someone from the club needs to come out and explain what the future is, as it's not looking good.''
by g portugal
05:47AM 3rd Sep 2009
''Cut the effing excuses. Where was the rest of the Board when Eggert "approved" all this spending? Was the rest of the Board to busy gorging itself on subprime debt? Blaming it all on Magnusson is easy and convenient ,isn't it? Magnusson was only one of whole cast of characters at fault,including the current CEO.
And if it's really so bad, then why the funk do they not just sell the club, get out and take the their losses? Because with every player they sell without having gotten adequate striking options, these mugs edge the club closer to relegation.
In which case, THEY WILL NEVER BE ABLE TO SELL THE CLUB AND IN WHICH CASE THEIR DEBTS WILL ONLY INCREASE.
If it's that bad then don't cut season ticket prices. Don't sign Kovac who we didn't need. Don't fail to bite the bullet and make a decision on Ashton, whether that means giving him a payout to cancel his contract or not. Don't sign Nouble and Daprela. Don't fail to loan out or sell Quashie and Davenport when it was still possible to do so earlier in the summer.
AND DON'T LIE ABOUT A SO-CALLED "PROJECT" WHEN YOU HAVE NO INTENTION OF FUNDING IT.''
02:14AM 3rd Sep 2009
''Here we go again, let's just doom and gloom our club into oblivion, it's almost like some folk who write this enjoy it. We are not going to hell. Get a grip and lets see what happens. Talk about whinge whinge whinge.''