The New Nation - Internet Edition

BBC Online

West Ham could face a £5m shortfall after their shirt sponsor went into administration on Friday.

The Hammers have only received £2.5m from a three-year deal with travel company XL, BBC Sport understands.

A £7.5m deal, worth £2.5m a year, was signed with the Sussex-based company in February 2007 but only one year of the contract has been paid so far.

Hammers chairman Bjorgolfur Gudmundsson is also one of the guarantors of a 207 million Euros bank loan given to XL.

Gudmundsson and his son Bjorgolfur Thor Bjorgolfsson, who is also a billionaire, became guarantors of the bank loan on Wednesday.

The guarantee was originally provided by Icelandic shipping company Eimskip, in which Gudmundsson has an interest.

West Ham will now start the search for another shirt sponsor and wait, along with XL's other creditors, to see what administrator Kroll does with the company.

A contingency plan had been built into the deal in the event of the club being relegated, with the annual payment being reduced from £2.5m if the Hammers did drop down a division.

A West Ham statement said: "XL Holidays remains the club's principal partner and we await further information from the administrator before ascertaining the impact of these events.

"We are of course saddened for the customers of XL Holidays that they have been affected and hope that a speedy and satisfactory solution is found."

XL Leisure Group, which is based in Crawley, is Britain's third largest package holiday group.