David Sullivan fears "Armageddon" if West Ham are relegated from the Premier League.
The Hammers were bought by former Birmingham owners Sullivan and David Gold last month with reported debts of around £100m.
Sullivan acquired 50% of the club in a deal valuing it at £105m, becoming chairman, while ex Birmingham chief executive Karren Brady also joined the Hammers as deputy chairman.
As the new regime discover the full scale of the Hammers' financial position, Sullivan is concerned for the club's future if Gianfranco Zola's side fail to beat the drop.
"It'll be Armageddon if we go down. It'll be worse than what's gone on at Newcastle," Sullivan said in The Sun.
"I can't believe the contracts I've inherited. Every position is overpaid, whether in administration or on the playing side.
"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 face Sullivan and Gold's former club at Upton Park tomorrow night.
Gold said in The Sun: "I was at Birmingham City for years but I really want to give them a good whacking.
"After 17 years at Birmingham, I think we know how to run a football club, I am certainly a lot wiser than when I first started.
"All I need now is for the team to start winning. Wednesday night will do for starters."