The resignations of two West Ham directors this week have attracted little comment so far. But they are indicative of a situation on the West Ham Board which is far from healthy. Mike Lee and Gudmundur Oddsson left the board this week after apparent concerns about personal liability issues.
There are strong rumours that West Ham chairman Bjorgolfur Gudmundsson’s business empire is close to collapse and that he will be forced to offload the club before Christmas. He had been thought to be worth more than £360 million, but the Icelandic banking collapse saw his major stake in the Lansbanki Bank nationalized. It is thought he lost £230 million. One of his other major businesses, Samson Holdings, went into administration earlier this week. He has previously said that there was no way that he would be forced into selling West Ham, but there is now a recognition that his financial position is so serious that a sale needs to happen before Christmas. There seem to be two dimensions to the resignations. The first is that power has very much shifted back to Iceland as the sale process begins, while Lee and Oddson have clearly recognized that they could become personally liable if the club was held responsible for debts relating to the Holding Company, or if it could not meet its obligations.
While the situation is serious, we should recognize that Gudmundsson seems to be a very unfortunate victim of circumstance, rather than the architect of his downfall. While the club is not officially up for sale, potential buyers are indeed being sought. Mike Lee, although no longer on the board, appears to retain a key role and is continuing to advise the board on communications and might even be a key player in the sale process. His contacts from his time with UEFA are legendary. It is thought that the selling price will be almost double the £85 million paid to Terry Brown in 2006, but the longer it goes on, the lower the price will go. They key thing is not to sell to just anyone, but to try and find a buyer who will see the potential of the club and be willing to invest the requisite sums in the transfer window.
While there may be no fire sale in the transfer window, it is quite clear that there are no further investment funds available from the current owners. The club is financially stable, as debts have been reduced along with the wage bill.
There can be little doubt that the Club is about to enter a very rocky period. We can but hope that the team’s performance is unaffected by what is happening at Board level, although judging from yesterday, that is far from the case.
I for one with the Icelandic owners well in their search for a buyer. I hope I am not being naïve, but I actually trust them to sell to the right buyer. It is a great shame that their own vision for the club can never be realized.