• Dyer and Ljungberg cost club £34m for 32 games
• Dean Ashton left West Ham with £6m bill

Freddie Ljungberg and Kieron Dyer will have cost West Ham effectively £1m a match, it was revealed in the club’s latest accounts. Ljungberg, who has left Upton Park, and Dyer will have cost £34m over the terms of their contracts, having started a combined total of only 32 matches for West Ham since the summer of 2007.

The club’s ill-judged spending over recent seasons also included their decision to give Dean Ashton a new contract, which left them liable for a £5.81m payment when he was forced to retire because of injury.

For two years under the ill-fated Icelandic regime, West Ham’s wages totalled around 80% of their annual turnover, nearly 20% higher than the Barclays Premier League average. Nick Igoe, the club’s finance director, said West Ham’s performance on the pitch was poor following their huge outlay.

“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 wrote in the accounts.

“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 football club can sustain this level of expenditure on underperforming members of its squad.”

West Ham UnitedBusinessguardian.co.uk

• ‘It’ll be Armageddon if we go down – worse than Newcastle’
• Pay reductions reported to amount to 25% of salaries

The West Ham co-owner David Sullivan has revealed that players and management staff will be asked to take a salary cut even if the club avoids relegation from the Premier League and has warned that it will be “Armageddon” if the Londoners go down.

“Everyone will be asked to take a cut this summer,” Sullivan told the Sun, which reported that the pay reductions would amount to 25% of their salaries.

High earners such as Scott Parker and Kieron Dyer, who reportedly take home around £65,000-a-week are among those who may be affected, as well as the England defender Matthew Upson.

The full scale of the financial crisis at Upton Park is made clear in documents which the paper claims reveal the club owes £15m to other teams in outstanding fees for its current squad assembled for a costly £75m.

“It’ll be Armageddon if we go down. It’ll be worse than what’s gone on at Newcastle,” said Sullivan. “I can’t believe the contracts I’ve inherited. Every position is overpaid, whether in administration or on the playing side. All are earning more than they would at other clubs.

“We have made cutbacks already but may have to make another 20 or 30 people redundant by the summer. We have already had people in senior positions offer to take a voluntary 25% reduction to keep their jobs. It’s been gratefully accepted. If someone is doing a good job but is overpaid you still want to keep them. But many people at the training ground should take a voluntary pay cut. There’s an army of people supporting the first team. Everyone at the club will be asked to take a salary cut in the summer. The club is in a mess and we all have to pull together. If we go down I can’t even consider the situation.”

West Ham, two places off the bottom, face Sullivan and David Gold’s former club Birmingham City at Upton Park tomorrow evening. Gold has said he hopes his new club “whack” Alex McLeish’s side.

“I was at Birmingham City for years and it was great – but I really want to whack them,” he said. “I have a great fondness for Birmingham but it was said the way it ended. I am a lot wiser now than when I went there 17 years ago and I want to win. My allegiance is to West Ham – that it where my heart and sole is and I think of my mum looking down and going: ‘Come on you Hammers.’”

West Ham UnitedDavid SullivanPremier LeagueGregg Roughleyguardian.co.uk