Post by QPR Report on Jan 14, 2009 7:06:58 GMT
A good summary/explanation of why West Ham are still in trouble over this.
David Conn/The Guardian
Football finance
Are West Ham's directors simply blowing bubbles over the Tevez affair?
West Ham are sticking to their guns as financial concerns loom and another investigation is launched into Carlos Tevez affair
Was there ever a Premier League club with so far-fetched a litany of woes as West Ham United? The old East End family club must concentrate on improving performances on the pitch — if only to take their minds off the Icelandic banking meltdown, which has hammered the owner's fortune and led to West Ham being for sale in an uninviting market, the compensation claim in the Tevez saga, which Sheffield United are understood still to put at £50m, and another Premier League and Football Association inquiry focusing on West Ham's conduct when they fielded the over-performing Argentinian in the final three games of 2006-07.
To these agonies can be added the looming threat, if West Ham are found to have breached the rules when they retained Tevez, that points could be deducted. Although the end of the inquiry is months away, an FA spokesman confirmed that a points deduction was one of the available sanctions . West Ham, on top of everything else, can barely contemplate relegation.
The club would argue that, even if they are found culpable — a possibility they reject — points deduction would amount to double punishment because Lord Griffiths has already ruled against them over their retention of Tevez. In his arbitration ruling Griffiths said West Ham breached the undertaking they gave to the Premier League in April 2007 that they would cancel their contract with Tevez's "owners". Instead Griffiths agreed that the club's chief executive, Scott Duxbury, had a series of "oral cuddles" in which he reassured the owners, two offshore companies represented by Kia Joorabchian, that they would, despite what Duxbury had promised the Premier League, still retain the rights to the player.
West Ham are already being sanctioned for that, forced to compensate Sheffield United for the cost of relegation. The Bramall Lane club are understood to have finalised a financial inventory detailing their losses, to which West Ham have until the end of the month to respond. They argue the just figure is nothing like £50m, because the increased income from Premier League status is mostly swallowed up by higher player wages. Griffiths will decide in March, barring delays.
Of the new inquiry West Ham say they have "nothing to hide" and that they "acted in good faith" — attitudes which would have served them well from the off. Had they come clean to the Premier League about the "third party ownership" when they signed Tevez and Javier Mascherano in August 2006, none of this scandal would have unfolded. Yet the club's conduct seems to have been skewed, throughout, by trying to be a little too cute.
West Ham's then chief executive, Paul Aldridge, told Richard Scudamore, the Premier League's chief executive, there were no documents relevant to the players' registrations which he had not shown the league. The third party contracts came to light when Mascherano moved to Liverpool in January 2007, because they showed the Premier League everything. Scudamore fumed that West Ham had misled him; and disciplinary proceedings began.
The maddening aspect of this for West Ham is that, if Aldridge and Duxbury, then the club's legal director, had shown Scudamore the arrangements, they were likely to have been asked for only minor alterations. The Premier League allowed Mascherano's third party "ownership" to continue when he went to Liverpool, insisting only that the loan be for a fixed period and that the "owners" did not retain any rights during the loan. When Tevez eventually moved to Manchester United, a fixed period was again insisted on; Tevez remains a loan player at Old Trafford and under the "ownership" of Joorabchian's investors.
Yet West Ham chose not to disclose the contracts at all. Even after being charged they argued their innocence, until shortly before the hearing, when they pleaded guilty. Aldridge was outraged that he was denounced as a liar in the judgment without an opportunity to state his case. He maintained he acted on advice that third party contracts were not relevant to Tevez's registration. West Ham, guilty, were handed their record £5.5m fine in April 2007, yet continued to attract more trouble. They were given three options: relinquish Tevez; keep him and negotiate a different arrangement with Joorabchian; or rip up the ownership contract and keep him. They chose to say they had ripped it up, although few understood how they could keep Tevez for free.
It was then, according to Graham Shear, Joorabchian's lawyer, that Duxbury gave the "oral cuddles," telling Joorabchian that the contract was not really torn up, and that the "owners" retained their rights. Tevez stayed, played magnificently, West Ham stayed up and the Blades went down roaring at the injustice.
West Ham deny the "oral cuddles" testimony, arguing they did rip up the contract. They point to the fact Joorabchian sued in summer 2007 for Tevez to be released, and ultimately paid West Ham £2m — a process intimately supervised by the Premier League. Griffiths, though, accepted Shear's view of events. The forthcoming FA and Premier League inquiry will examine exactly the same evidence.
Faced with all this, West Ham are maintaining their brave front. The owner, Bjorgolfur Gudmundsson, has been battered by Iceland's economic collapse but Asgeir Fridgeirsson, West Ham's vice-chairman, insists the club is safe. The holding company, Hansa, has been granted a moratorium on paying its creditors and must report back to an Icelandic court on 6 March to show progress in selling the club. Fridgeirsson, though, now says the club need not necessarily be sold. "If the market does not appreciate the value of the club, we will not sell," he said. Fridgeirsson emphasised that Gudmundsson was not taking money out of the club to service the needs of Hansa or any other debts, and that the manager, Gianfranco Zola, and Duxbury do not need to have a fire sale. West Ham have refused to sell Scott Parker or Craig Bellamy for below a handsome price.
"The club has to balance its books, which is normal practice in any business," said Fridgeirsson. "However, the idea is not to sell players and go into a downward spiral ." He acknowledged the final pay-out to Sheffield United was "a question mark over the club's valuation" but said West Ham would not be forced into insolvency. Fridgeirsson said there were still parties interested in buying the club.
West Ham fans can only hope that this defiant talk, of stability in a sea of troubles, is the truth, not just wishful thinking by beleaguered directors blowing pretty bubbles in the air.
www.guardian.co.uk/football/blog/2009/jan/13/west-ham-united-carlos-tevez-sheffield-united
David Conn/The Guardian
Football finance
Are West Ham's directors simply blowing bubbles over the Tevez affair?
West Ham are sticking to their guns as financial concerns loom and another investigation is launched into Carlos Tevez affair
Was there ever a Premier League club with so far-fetched a litany of woes as West Ham United? The old East End family club must concentrate on improving performances on the pitch — if only to take their minds off the Icelandic banking meltdown, which has hammered the owner's fortune and led to West Ham being for sale in an uninviting market, the compensation claim in the Tevez saga, which Sheffield United are understood still to put at £50m, and another Premier League and Football Association inquiry focusing on West Ham's conduct when they fielded the over-performing Argentinian in the final three games of 2006-07.
To these agonies can be added the looming threat, if West Ham are found to have breached the rules when they retained Tevez, that points could be deducted. Although the end of the inquiry is months away, an FA spokesman confirmed that a points deduction was one of the available sanctions . West Ham, on top of everything else, can barely contemplate relegation.
The club would argue that, even if they are found culpable — a possibility they reject — points deduction would amount to double punishment because Lord Griffiths has already ruled against them over their retention of Tevez. In his arbitration ruling Griffiths said West Ham breached the undertaking they gave to the Premier League in April 2007 that they would cancel their contract with Tevez's "owners". Instead Griffiths agreed that the club's chief executive, Scott Duxbury, had a series of "oral cuddles" in which he reassured the owners, two offshore companies represented by Kia Joorabchian, that they would, despite what Duxbury had promised the Premier League, still retain the rights to the player.
West Ham are already being sanctioned for that, forced to compensate Sheffield United for the cost of relegation. The Bramall Lane club are understood to have finalised a financial inventory detailing their losses, to which West Ham have until the end of the month to respond. They argue the just figure is nothing like £50m, because the increased income from Premier League status is mostly swallowed up by higher player wages. Griffiths will decide in March, barring delays.
Of the new inquiry West Ham say they have "nothing to hide" and that they "acted in good faith" — attitudes which would have served them well from the off. Had they come clean to the Premier League about the "third party ownership" when they signed Tevez and Javier Mascherano in August 2006, none of this scandal would have unfolded. Yet the club's conduct seems to have been skewed, throughout, by trying to be a little too cute.
West Ham's then chief executive, Paul Aldridge, told Richard Scudamore, the Premier League's chief executive, there were no documents relevant to the players' registrations which he had not shown the league. The third party contracts came to light when Mascherano moved to Liverpool in January 2007, because they showed the Premier League everything. Scudamore fumed that West Ham had misled him; and disciplinary proceedings began.
The maddening aspect of this for West Ham is that, if Aldridge and Duxbury, then the club's legal director, had shown Scudamore the arrangements, they were likely to have been asked for only minor alterations. The Premier League allowed Mascherano's third party "ownership" to continue when he went to Liverpool, insisting only that the loan be for a fixed period and that the "owners" did not retain any rights during the loan. When Tevez eventually moved to Manchester United, a fixed period was again insisted on; Tevez remains a loan player at Old Trafford and under the "ownership" of Joorabchian's investors.
Yet West Ham chose not to disclose the contracts at all. Even after being charged they argued their innocence, until shortly before the hearing, when they pleaded guilty. Aldridge was outraged that he was denounced as a liar in the judgment without an opportunity to state his case. He maintained he acted on advice that third party contracts were not relevant to Tevez's registration. West Ham, guilty, were handed their record £5.5m fine in April 2007, yet continued to attract more trouble. They were given three options: relinquish Tevez; keep him and negotiate a different arrangement with Joorabchian; or rip up the ownership contract and keep him. They chose to say they had ripped it up, although few understood how they could keep Tevez for free.
It was then, according to Graham Shear, Joorabchian's lawyer, that Duxbury gave the "oral cuddles," telling Joorabchian that the contract was not really torn up, and that the "owners" retained their rights. Tevez stayed, played magnificently, West Ham stayed up and the Blades went down roaring at the injustice.
West Ham deny the "oral cuddles" testimony, arguing they did rip up the contract. They point to the fact Joorabchian sued in summer 2007 for Tevez to be released, and ultimately paid West Ham £2m — a process intimately supervised by the Premier League. Griffiths, though, accepted Shear's view of events. The forthcoming FA and Premier League inquiry will examine exactly the same evidence.
Faced with all this, West Ham are maintaining their brave front. The owner, Bjorgolfur Gudmundsson, has been battered by Iceland's economic collapse but Asgeir Fridgeirsson, West Ham's vice-chairman, insists the club is safe. The holding company, Hansa, has been granted a moratorium on paying its creditors and must report back to an Icelandic court on 6 March to show progress in selling the club. Fridgeirsson, though, now says the club need not necessarily be sold. "If the market does not appreciate the value of the club, we will not sell," he said. Fridgeirsson emphasised that Gudmundsson was not taking money out of the club to service the needs of Hansa or any other debts, and that the manager, Gianfranco Zola, and Duxbury do not need to have a fire sale. West Ham have refused to sell Scott Parker or Craig Bellamy for below a handsome price.
"The club has to balance its books, which is normal practice in any business," said Fridgeirsson. "However, the idea is not to sell players and go into a downward spiral ." He acknowledged the final pay-out to Sheffield United was "a question mark over the club's valuation" but said West Ham would not be forced into insolvency. Fridgeirsson said there were still parties interested in buying the club.
West Ham fans can only hope that this defiant talk, of stability in a sea of troubles, is the truth, not just wishful thinking by beleaguered directors blowing pretty bubbles in the air.
www.guardian.co.uk/football/blog/2009/jan/13/west-ham-united-carlos-tevez-sheffield-united