West Ham in a Kieron Dyer situation

The decision to award injury-plagued striker Ashton a new contract in December 2008 backfired, leaving them open to the huge payment when he was forced to retire a year later.

Ljungberg and Kieron Dyer will have cost West Ham millions despite having only started their combined total of 32 matches since the summer of 2007.

For two seasons under their ill-fated Icelandic regime, West Ham’s wages totalled about 80 per cent of their annual turnover – nearly 20 per cent higher than the Premier League average.

Club finance director Nick Igoe wrote in his accounts on-field performances were unsatisfactory following such major investment.

“It is a truism to observe that a club’s playing success (and almost certainly long term financial success) is largely dependent on how wisely it invests its available resources,” Igoe said in the report.

“It has to be concluded that many of the group’s investment decisions in the last two to three seasons have been ill-judged. Two players who signed in the summer 2007 transfer window, one of whom has since left the club, have started a combined total of 32 games and will have cost the group £34m over the term of their contracts.

“No club can sustain this level of expenditure on underperforming members of its squad.

“It must be concluded that the investment in the playing squad has not generated an appropriate return, either financially or in terms of performance.

“It follows that an eighth and 10th place league finish, one Carling Cup last-eight place and one FA Cup last-16 place represent an unsatisfactory return on this expenditure.

“Clubs with fewer resources and lower levels of expenditure on their squad have achieved a greater level of league and cup success.”

Last night’s figures also revealed the major belt-tightening programme which the Hammers undertook last season in the hope of staving off financial meltdown.

The wage bill was reduced and the club made £10.8m from selling players  but that accounted for less than a quarter of the transfer expenditure from the previous two seasons.

“The 2008/09 season saw the group take steps to generate essential cash flow by a programme of player sales and wage savings,” said Igoe.

“This comprised a reduction in the size of the playing squad and the trading of certain players for less costly replacements.”

West Ham’s turnover was down to £76.1m, due mainly to the collapse of title sponsor XL.

But at least the wage bill also dipped. Losses before tax of £16.2m were not helped by “exceptional expenses” such as the Ashton pay-out, but the figure was still half what it had been the year before.

The club’s bank debt of £45m is not considered “excessive” for a company generating £75-80m of annual turnover.

But West Ham say the debt “is challenging because it is relatively short term in nature, expiring as  it does in August 2011, and has to be viewed alongside other liabilities such as the Sheffield United settlement as well as net transfer fee creditors of £14.4m”.Obviously you’d hope you wouldn’t have any of those injuries but you do, and you have to live with it.

“At the beginning of the season we’d all be happy to be in the position we are at this point. Obviously you’d hope you wouldn’t have any of those injuries but you do, and you have to live with it.

Never more so than in Modric’s superb second goal against Everton, combining both men and fellow Croatian Vedran Corluka in a terrific attacking triangle.