West Ham's investment in players has not generated an 'appropriate return', according to the club's finance director after the publication of a latest set of accounts.
The Hammers have been criticised for the deals offered to Freddie Ljungberg and Kieron Dyer, who will have cost £34million over the terms of their contracts, having only started a combined total of 32 matches.
The decision to award Dean Ashton a new contract in December 2008 can also be viewed as a mistake as the striker's retirement left the club owing a £5.81million payment and investment has been described as 'ill-judged'.
For two years under the Icelandic regime, West Ham's wages totalled around 80 per cent of their annual turnover, nearly 20% higher than the Premier League average.
The club's finance director Nick Igoe wrote in the accounts: "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.
"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.
"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 and one FA Cup last 16 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."
The figures also reveal the major belt-tightening programme which West Ham undertook last season in the hope of staving off financial meltdown.
"2008/09 saw the group take steps to generate essential cash flow by a programme of player sales and wage savings," wrote Igoe.
"This comprised a reduction in the size of the playing squad and the trading of certain players for less costly replacements."