How Magnusson's spending spree hastened his departure

Eggert Magnusson's departure from West Ham United was partly caused by the club running up a loss of £18.8 million in the last financial year,
The Independent on Sunday can reveal.

The deficit, compared to a £3.6m profit the year before, can be explained by the spending spree the Icelandic businessman embarked upon in the last January transfer window when the club fought against relegation. However, they also followed that up in the summer with some unwise moves such as acquiring Freddie Ljungberg on a three-year contract that pays him an astonishing £85,000 a week.

West Ham spent £23.1m in January 2007, including players who have not made a significant impression, such as Luis Boa Morte and Calum Davenport. And with turnover down after a disappointing Premier League season and poor runs in cup competitions, West Ham saw income drop £2.6m to £49.4m. The figures, to the year ended 31 May 2007, have been a concern for West Ham's billionaire owner, Bjorgolfur Gudmundsson, who installed Magnusson as chairman and chief executive when he bought the club in December 2006.

The lack of financial control has been cited by sources as one of the major reasons for Magnusson being deposed a year later. The financial figures appear to back up that claim although, it could be argued, it is a price worth paying for staying in the Premier League. At the same time West Ham's wage bill rose dramatically – up £11.1m to £41.3m. The figures do not take into account transfers last summer but they do include the compensation paid to Alan Pardew when he was sacked as manager,plus the £5.5m fine imposed for a breach of Premier League rules in signing Carlos Tevez.

Given Gudmundsson's wealth – he is pushing ahead with plans to build a £250m stadium – the results are not a cause for grave concern, especially, as sources pointed out yesterday, he pumped £30m more into the club in the autumn. But it has contributed to the lack of transfer activity this month. That, though, is also explained by the manager, Alan Curbishley, not having been able to field his best side.

West Ham have also, however, put on hold contract talks with players such as Lucas Neill and Dean Ashton. Neill, the captain, was seeking parity with the top earners but has been told he will only be given a year's extension while Ashton, who has two years left but is now one of the lowest earners, will have to wait until the summer. West Ham are likely to try to sign an established striker on loan this month. At the same time they will listen to offers for Davenport, Bobby Zamora, Nigel Quashie, John Pantsil and Christian Dailly.

Last night a West Ham spokesman said: "The club is in a sound financial state but it was necessary last year to invest in players in order to remain in the Premier League. That strategy was successful but it's also right that we take a firmer fiscal view as we move forward."

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Caption competition
Caption competition
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

Bleacher Report

Daily Quiz
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee