The pressure on West Ham owner Bjorgolfur Gudmundsson to sell the club has increased dramatically with the news that his holding company, Hansa, face the possibility of being declared insolvent.
Gudmundsson wants a quick sale of West Ham so that he can pay debts of more than £50 million resulting from the collapse of Icelandic bank Landsbanki in which he had a 41% stake.
Gudmundsson bought West Ham for £87 million in 2006 and when he initially went looking for a buyer, he was looking to sell West Ham for around £270 million. But as Mike Ashley at Newcastle found out, it is difficult to find a buyer for a Premier League team in today’s worldwide credit crunch.
Today a figure of between £100-125 million seems a more realistic selling price for the Hammers.
What is making the sale of West Ham more urgent is the March 6 deadline set by court officials in Iceland for Hansa to show they can repay creditors. Failure to do so could result in the company being declared insolvent and having their assets taken over, including West Ham.
The Premier League have already warned West Ham they will be docked points if they are placed in administration:
“Any club within the division that suffers an insolvency event will automatically receive a nine-point sporting sanction,” a spokesman said.
If finding a buyer for West Ham in the next 60+ days is unlikely, then one option that Gudmundsson has is to sell players in order to raise cash. Unfortunely, once you start to sell your best players to pay down your debts, then your team is weaker and the possibility of relegation starts be become more likely.
This is the same sor of cycle that caused Leeds to get relegated several years ago. And they still ahve not recovered from it.