How did it go wrong?
PERHAPS THE biggest surprise to come out of last week s revelations was that we all seemed so surprised by what was going on behind the scenes at West Ham, writes DAVE EVANS. The signs were there. We had all heard about the huge wages that were being paid
PERHAPS THE biggest surprise to come out of last week's revelations was that we all seemed so surprised by what was going on behind the scenes at West Ham, writes DAVE EVANS.
The signs were there. We had all heard about the huge wages that were being paid to players; about the �38million of debt the club had accrued in one year; about the removal of Eggert Magnusson as chairman; about Alan Curbishley being forced out as players were sold from under his nose.
Surely we should have suspected that things were not being run by shrewd businessmen, but rather by extravagant fat cat bankers who did not know the meaning of excess.
It took West Ham nearly going into administration and a last-ditch takeover by lifelong Hammers fans David Sullivan and David Gold to finally spill the beans - and did they spill them.
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"In very simplistic terms, there is �50m owed to banks and there is �40m owed to other clubs," explained Sullivan.
"Just to clarify that, because it is important that we tell the supporters exactly the position, normally you owe money and you are owed money. Here West Ham owe �40m to other clubs including Sheffield United, West Ham are not owed a single penny by other clubs."
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That Sheffield United bill is said to be �26million spread over five years, so where the other �14million will be going is something of a mystery when you consider the small amount of players West Ham have bought in the last couple of seasons.
Sullivan was quick to herald the job done by chief executive Scott Duxbury and finance director Nick Igoe in trying to keep the sinking ship afloat, but it seems that has left the new owners with little leeway.
"Looking at the finances, they have walked a very, very difficult line and this is why they have had to pre-sell stuff," said Sullivan.
"In defence of Scott (Duxbury) and Nick (Igoe) they have done a wonderful job of pre-selling everything, which makes our job more difficult.
"When they have sold players, they have discounted the debt with the bank. So for example if Mr Bellamy was sold for �12m or �15m, they put three million down, they were owed �10 and a half million, that money was sold for �9m to a finance company, so there is not a penny to come in.
"In addition, West Ham have borrowed against the next two year's season ticket money - 70 per cent of next season and 60 per cent the year after. The shirt sponsors have paid 70 per cent of their money three years up front.
"There is the Alan Curbis-hley settlement and various other bits and pieces, so the real debt is about �110 million.
"Every stone we turn is a negative to the cashflow of the club and the viability of the club. So they have done a fantastic job of keeping the club alive, but the cost is we are taking over an incredibly bad situation."
So who is to blame for the current crisis at Upton Park? Certainly Messrs Sullivan and Gold will point the figure firmly at the Icelandic owners - namely Eggert Magnusson and Bjorgolfur Gudmundsson.
On the face of it, some of their extravagances need to be seen to be believed.
The signing of Freddie Ljungberg springs readily to mind. A player who was on the way out of Arsenal and on �30,000 a week, signs for West Ham for �3million and earns himself �80,000 a week, including �20,000 in image rights.
His signing seemed to have been a personal triumph for Magnusson, who allegedly idolised the Swede and was quick to pose for photographs with his star capture.
Then there was the purchase of Savio from Brescia, supposedly the next striking star, who was signed as a replacement for Craig Bellamy.
He turned out to be a young, fragile winger who was going to take years to mature into a top-class player, and in any case Junior Stanislas quickly emerged from the Academy and looked a much better prospect. He cost nothing, Savio, anything between �5m and �9m depending on what rumour you believe.
The Carlos Tevez and Javier Mascherano affair was inflicted upon the Icelandics, but why was Kia Joorabchian, the agent who had caused the club so much trouble and taken them to court, suddenly given a consultancy job at Upton Park and allegedly paid �1million for his services?
Magnusson, a likeable man who was taken to the hearts of the West Ham supporters, says it was not his fault.
"Does anyone honestly think I did that on my own?" said Magnusson. "That I did it without the full knowledge and support of the owner, the chief executive and the manager Alan Curbishley? Of course not.
"Maybe I was led to believe there was more money available than there was. I was told that there was a lot of money."
So it was Gudmundsson's fault then, was it? Certainly he seems to have misled Magnusson and West Ham as to where the funding was coming from. They thought it was from his own personal fortune, he apparently was getting it from the bank where he owned a controlling interest.
Sullivan made his position clear: "We are not the King of Saudi Arabia or Roman Abramovich," he said. "We are English tax payers who will pay 50 per cent in the pound in a few months time, plus National Insurance, and we haven't got �140million."
There lies the rub. Gud-mundsson thought he was the King of Saudi Arabia and Roman Abramovich rolled into one, and in the good times, he might as well have been.
He did have �140million to spend if he wanted to. He was a billionaire who with his good mate Eggert Magnusson wanted to rub shoulders with the elite of world football.
What went wrong was world recession, and typically for West Ham, the Icelandic economy, built on banking and finance, was brought to its knees.
When everything is okay in the world economy, no questions are asked about bonuses and other extravagancies. But when the going gets tough, all of those extremes come home to roost and that is what we are now seeing at West Ham.
At long last, things seem to be improving in the world economy, and maybe things will now improve at Upton Park under the new owners.
When you think about it, almost the whole country is in debt. You can't turn on the television without seeing an advert from some dubious loan company offering to bail you out of your problems.
We are living in a society where people and governments owe huge sums and yet when the next gadget comes on to the market, or when the sales start, there is an almighty stampede to buy, buy, buy.
One of the first moves from the new owners at West Ham was to offer 33-year-old injury-prone striker Ruud Van Nistelrooy a deal worth �100,000 a week.
A new era at Upton Park? We shall see.