David Conn: Cardiff brought to their knees as financial reality bites for Hammam

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Sam Hammam invoked the spirit of the 15th-century anti-English rebel warrior Owain Glyndwr when he arrived at ragged Cardiff City in August of 2000, calling on its "Welsh army" of fans to aim for the Premier League "and beyond to Europe". This week he called on another, perhaps less stirring couple of names: Ernst and Young accountants, to see how they can staunch losses the club is now haemorrhaging as it scraps against relegation from the Championship.

Sam Hammam invoked the spirit of the 15th-century anti-English rebel warrior Owain Glyndwr when he arrived at ragged Cardiff City in August of 2000, calling on its "Welsh army" of fans to aim for the Premier League "and beyond to Europe". This week he called on another, perhaps less stirring couple of names: Ernst and Young accountants, to see how they can staunch losses the club is now haemorrhaging as it scraps against relegation from the Championship.

Cardiff, whom Hammam believed to be one of football's few remaining sleeping giants, a franchise which could draw fans from the whole of Wales, appear to have reached a financial crisis point. The players and office staff have not been paid their wages for last month and the club has also defaulted on a payment due to West Ham United for the transfer of the midfielder Jobie McAnuff last August.

Construction of the new 30,000-seater stadium at Leckwith, which has been Hammam's baby from the outset and was due to start in May, has suffered another delay, with the Cardiff Council leader, Rodney Berman, saying the club has yet to provide a finalised, viable business plan. Yesterday, the Bluebirds suddenly sold their captain, Graham Kavanagh, who had been the club's first £1m signing, in 2001, to Wigan, admitting the sale was "necessitated" by the club's financial problems.

The march up two divisions with good players signed by Hammam has led to debts reported to be £30m and a wage bill of £750,000 a month, picked up recently not by Hammam but another director, the South Glamorgan-based businessman Michael Isaac. He sought to dampen fears of a Ninian Park meltdown this week, saying Cardiff will not be "the next Leeds", and will pull through.

The Professional Footballers' Association has sent in its own lawyer, Mark Hovell, who has been heavily involved in the crises afflicting about 40 clubs over the past three years.

When Hammam arrived four-and-a-half years ago, the club was on its knees, relegated to the Third Division, with debts of £1.5m, ongoing losses close to £1m and a crumbling Ninian Park. "Sam the Man" brought with him the aura of Wimbledon, whose legendary rise he oversaw from the Fourth Division to the top flight, and 1988 FA Cup winners over Liverpool.

Hammam said he would invest more than £3m in Cardiff to pay off debts, cover anticipated losses and spend on new players. Cardiff fans hailed his arrival as the start of their return to the top, although Hammam toned down his language after violence at Cardiff's 2-1 FA Cup win over Leeds, which followed his call for the fans to be a "Welsh army crossing the border" to away games, and walks around the pitch which some saw as incitement.

Promotion to the Second Division in his first season had boosted the cult of Sam, then in 2003 Cardiff, featuring promising Welsh youngsters Danny Gabbidon and Robert Earnshaw, won promotion again. Hammam looked to be moving unstoppably to being the first owner to take two different clubs to the Premier League. "Having recently come out of a 22-year love affair with another club (my baby)" he wrote of Wimbledon, "I never thought I would fall in love again. But I have!"

His baby, however, was left screaming and grizzling on the doorstep at Milton Keynes' National Hockey Stadium. While Hammam's record at Wimbledon is footballing lore, only gradually has it been understood how Hammam made a killing.

As early as 1984, Hammam transferred Wimbledon's Plough Lane ground away from the club, to his own company, Rudgwick Limited, as payment for loans which he had paid in to bankroll Wimbledon's assault on the League. After that, his baby always paid rent to his company. In May 1991, Hammam moved Wimbledon to become tenants at Selhurst Park, then six years later, managed to sell 80 per cent of his shares in the club to the Norwegian shipping magnates Kjell Inge Rokke and Bjorn Gjelsten, for an outlandish £25m, because they believed the club was going to move to Dublin. The following year, 1998, Hammam sold Plough Lane, to Safeway, for a reported £8m; Rudgwick's accounts for that year show a £5m profit for the sale of a property.

Wimbledon were left homeless and, when the Irish FA turned the Dublin move down, they had owners who didn't want them anymore. The move to Milton Keynes, the desperate answer of the next chairman, Charles Koppel, was almost unanimously opposed by fans, who upped and formed their own club from scratch, starting again at the base of the football pyramid: AFC Wimbledon.

Cardiff fans, feasting on long-yearned-for success and improvements to Ninian Park pending the construction of their new super-stadium, would hear nothing of that history, until doubts seeped in at the beginning of this season. After finishing 13th last term, Cardiff sold Earnshaw to West Bromwich Albion for £3.5m, while McAnuff, a former Wimbledon midfielder, was signed from West Ham for £250,000. This season has been difficult; following last Saturday's 2-1 defeat at Sunderland, Cardiff find themselves three points above the relegation zone.

This week began with news that the stadium had been delayed again. There are understood to have been delays in two retailers signing for the project, and Cardiff Council is waiting for assurances that the club has "shortfall funding" to enable the scheme to go ahead. "We have yet to see a viable business plan, and if the club has financial problems it could affect its ability to secure the finance," Berman said.

The club put out a statement, which could hardly contrast more starkly with the purple of Hammam's early rhetoric: "The club is reviewing certain aspects of its operations and development requirements."

It then emerged that staff and players had not been paid, McAnuff has not been paid for in full, and Ernst and Young were picking over the financial morass. The club is due to file accounts at the end of this month, but Hammam's company, Rudgwick, which now owns Cardiff, published group accounts last November. They were horrible, showing a loss of £8.6m, although Hammam was still paid £235,000 in dividends.

The cost of financing a team to win promotion to the Premier League is more expensive now than it was when he had Wimbledon. The wage bill in the year to May 2003 was £160,000 a week, £8.4m altogether, almost £1m greater than the company's whole turnover. A short-term loan from Citibank was up to £18m; there was a further £6m of debt, and last September, Rudgwick borrowed £24m in a new seven-year facility, to repay the bank and other loans. That is before a penny is borrowed to finance the stadium.

Michael Isaac has emerged as the director who has been paying the players' wages in recent months. He said he and Hammam were working "flat out" to "regroup and strengthen the club's position".

Hammam set out his extravagant original vision for the club in a document laced with Welsh and Celtic nationalism. It was called Follow the Dream. They now appear to have lived the dream, and reality bites.

davidconn@independent.co.uk

Ups and downs of Sam the Man from FA Cup glory to £30m debts

1981: Hammam buys Wimbledon for £100,000.

1983: Wimbledon promoted to Third Division.

1984: Promoted to Second Division. Hammam's company, Rudgwick, takes ownership of Plough Lane.

1986: Promoted to First Division.

1988: Beat Liverpool 1-0 in FA Cup Final.

1991: Moves Wimbledon to Selhurst Park.

1997: Sells 80 per cent of Wimbledon for £25m.

1998: Sells Plough Lane to Safeway for reported £8m.

2000: Sells remainder of Wimbledon for £1.5m. Invests £3.1m in Cardiff City.

2001: Cardiff promoted to Second Division.

2003: Promotion to First Division.

2005: Cardiff's debts said to be £30m; staff not paid, new stadium delayed.