At some point, good business begins to look like unfair business. When the deal struck creeps close to obscene levels of good value, the group feeling of the once-jealous, now-outraged onlookers peaks like a towering crimson wave, frothing and cresting, about to crash down on its target.
Just a few days ago, it was announced that the cost of the Olympic Stadium, a 54,000 seater about to be occupied by West Ham United, has risen to over £700 million. It is now comparable in cost to the new Wembley Stadium, which took £780 million to complete. But Wembley belongs to no one club in the near-exclusive fashion that the Olympic Stadium will belong to the Hammers. The heady cha-ching of the price going up is rivalled in volume only by the new wave of anger that has rippled out in response.
The crux of the issue is this – the stadium has already cost in excess of £400 million to build, for the London Olympics. It now requires a face-lift to meet the needs of Premier League football, a transformation that will reportedly take an additional £272 million. West Ham are set to contribute £15 million to this added cost, as well as the £2.5 annual rent. Yes, the main tenants, who will occupy the stadium for the vast majority of the scheduled events there, are contributing slightly more than five percent to pay for the final revamp specifically designed to accommodate them.
Put this way, one can certainly empathise with the chagrin felt by, to name the two angriest protesters, Leyton Orient and Tottenham Hotspur. So who is footing the rest of the bill? Well, a collection of entities – Newham council, the UK Athletics, and the London Marathon Charitable Trust. But the most significant portions come from funds provided by the exchequer and the government, and from funds left over from the Olympics budget.
It is a great deal, one that West Ham vice-chairwoman Karren Brady has been the architect of. The East London club’s response to the perceived inequity of the agreement has been to announce lower ticket prices and to sell out some of the executive boxes. This gesture is one that could be reasonably expected to have come in the wake of the increased television money that was recently negotiated, let alone a historic gift of a brand new stadium, the fifth largest football arena in England. In short, the external goodwill towards West Ham remains wholly in the negative.
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West Ham are not quite in the clear yet, they still remain vulnerable to a hefty fine if the deal is found to be in violation of European state aid laws. Objections can – and may well be – lodged by any and all parties that feel disadvantaged by the deal during a window that lasts a decade. The worst case scenario here is this – if the London Legacy Development Corporation’s deal with West Ham for the stadium, which was completed before approval was sought from the European Commission, is found to break the relevant state aid laws, then West Ham might have to reimburse the public purse. That would mean repaying the full amount that the government, in its varied forms, has contributed to the stadium conversion costs, an amount that has, as was announced, just risen significantly.
West Ham are no strangers to deals that seem, and often turn out to be, too good to be true. Carlos Tevez and Javier Mascherano, at the time two of the best Argentinian players yet to move to Europe, suddenly became West Ham players under acutely suspect circumstances. Eventually, the deal was found to be highly illegal, and West Ham was fined heavily for it. This deal seems even better than the one that brought two future Champions League winners to Upton Park. Whether or not it too will be found punishable is yet to be seen.
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You also need to take into account all aspects of the deal which restrict West Ham’s use of the stadium. They have to retain the running track which was part of the Olympic Legacy. Tottenham weren’t prepared to do this. Don’t even get me started on Leyton Orient, a club with attendances in the region of 4,000. Barry Hearn’s inflated ego was the only thing at Leyton Orient that could have fully occupied the stadium. West Ham will have 19 home premier league matches and depending on success and cup draws, a handful of other games there. The LLDC will bring in revenue from other sports including Athletics (world championships 2017) Rugby World Cup and Concerts all of which will benefit from the redevelopment of the stadium. The fact that the stadium was poorly designed without any thought for future use is not West Ham’s fault or their sole financial responsibility. I also believe that the LLDC have got clauses in the contract that should West Ham FC be sold by Messrs Sullivan & Gold to some Billionaire for a healthy profit, they would be able to claw even more money back. What winds me up most about the OS deal is the endless witterings of people who are selective in their view of deal and see it purely as an amazing deal for West Ham at the taxpayers expense.
And this guy supports West Ham ? Imagine what he could write then if he doesn’t like the club!
Incredibly poorly researched article.
Very poor research there are whole loads of profitability even at West Ham matches that do not go to the club but to the developers and of course the club get only a variable percentage of any sponsorship including ground sponsorship that brings in a substantial profit for the operators and will go against development costs. The overwhelming contributers towards those earnings and overall contract value is of course the club. Yet no one mentions these facts while being only too keen announcing the base direct contributions. One has to ask since when has the lease holder had to pay substantial amounts towards the re development of a building to make it an earning and sustainable entity most of the profit from which will be from the club’s presense be it directly or indirectly the tenant? Everyone using it will benefit from this re development which was vital to make it a going concern, sadly due to poor planning and vision from the original planners back in 2005. West Ham have saved this’s from being a potential disaster, no thanks required but the animosity and hypocrisy is sickening in light of the Man City experience and even Leyton Orient owners getting a 1000 year lease for a pound from Walthamstow Council and then selling the site for millions. As I say do your research my friend.
West Ham fan? Do me a favour go “support” someone else will you mate! As we can really do without ill informed backing like this!
Who wrote this shit? How are West Ham going to get a hefty fine? They are renting the Stadium from the Government. They pay an annual fee in rent. It seems that nowadays, you can write whatever you want, no matter how poorly written, and fabricated, and it still gets published.