The team started the 2006-2007 campaign brightly, but slipped down the table due to off-field distractions. West Ham were knocked out from UEFA Cup by ItalianSerie A side Palermo (0–1 and 0–3) and saw themselves dragged into the relegation zone.
Eventually an Icelandic consortium, led by Eggert Magnússon, bought the club on 26 November 2006. Following a poor run of form leaving the club in 17th position (despite the signing of big name players like Javier Mascherano and Carlos Tevez, who both failed to perform to expectation for much of the season), the new owners sacked Alan Pardew, replacing him with former West Ham player Alan Curbishley who had recently ended a 15-year spell in charge of Charlton. Curbishley's first game was at home against Manchester United; West Ham won 1–0, but went on to draw at fellow relegation strugglers Fulham, get crushed 6–0 at newly promoted Reading and get knocked out of the FA Cup by rock bottom Premiership team Watford. An end-to-end thriller at home to Tottenham Hotspur ended with West Ham losing 4–3 after having been 3–2 in front with minutes to play, but the bright performance signified a change in form.
At the same time the signings of Mascherano and Tevez were being investigated by the Premier League, who were concerned that details regarding the transfers had been omitted from official records and whether or not the influence of MSI (led by Kia Joorabchian) breached Premier League rules regarding third party ownership of players (rules U.18 and B.13) came into question. The media at this time touted the idea Tevez's contract could be terminated, possibly resulting in a deduction of points for playing an "ineligible" player (despite Premier League statements to the contrary). On 27 April 2007, West Ham pleaded guilty and were handed a record £5.5 million fine by the Premier League, but avoided a points deduction. Liverpool's signing of Mascherano was investigated and he was cleared to play after a two-week delay.
Following the verdict, Wigan Athletic chairman Dave Whelan threatened legal action, supported by other relegation threatened sides including Fulham and Sheffield United: "This is a very serious offence West Ham committed...They broke the law, told blatant lies and should have got a 10-point penalty. If we can sue West Ham or the Premier League, I am sure that will happen." Wigan manager Paul Jewell suggested League officials had intimated they wished to see them relegated.
West Ham ultimately escaped relegation by winning seven of their last nine games, including a 1–0 win over Arsenal, and on the last day of the season, defeating newly crowned Premiership champions Manchester United 1–0 to finish outside the relegation zone in 15th.
Source: Barclays Premier League
Rules for classification: 1) points; 2) goal difference; 3) number of goals scored
For further information on European qualification see Premier League – Qualification for European competitions. (C) = Champion; (R) = Relegated; (P) = Promoted; (E) = Eliminated; (O) = Play-off winner; (A) = Advances to a further round.
Only applicable when the season is not finished: (Q) = Qualified to the phase of tournament indicated; (TQ) = Qualified to tournament, but not yet to the particular phase indicated; (RQ) = Qualified to the relegation tournament indicated; (DQ) = Disqualified from tournament. Pld = Matches played; W = Matches won; D = Matches drawn; L = Matches lost; F = Goals for; A = Goals against; GD = Goal difference; Pts = Points
1.Since the finalists of the 2006–07 FA Cup (Manchester United and Chelsea) and the League Cup winners (Chelsea) had already qualified for the 2007–08 UEFA Champions League through their Premier League positions, their 2007–08 UEFA Cup places were given to the sixth- and seventh-placed Premier League teams.
2.The highest-placed team who applied for the Intertoto Cup and not in an automatic UEFA Cup spot was awarded with a place in that competition. Blackburn Rovers occupied the Intertoto place, because Portsmouth and Reading did not apply. A further place in the UEFA Cup was up for grabs via the Premiership Fair Play League. The winner is placed into a draw with the winners of Fair Play leagues in other countries. The representatives from the two countries that come out of the hat first are given a place in the UEFA Cup first qualifying round. Since the winners of the Premiership Fair Play League, Tottenham Hotspur, had already qualified for the UEFA Cup by virtue of their league position, their place in the Fair Play draw was given to Aston Villa. However, the places in the UEFA Cup were awarded to the representatives from Finland and Norway.