West Ham’s deal for the Olympic Stadium has been in the spotlight the past few weeks. Costs have risen, the BBC have been taking an in-depth look into the deal, the London assembly has questioned the LLDC and fan groups of other clubs have called for a public inquiry. So is the witch hunt justified?
Dan Roan of the BBC has stirred up the Olympic stadium deal story again today. Last month he called it ‘the deal of the century’, today he talks about how ‘West Ham have struck gold’ and have got the stadium ‘virtually rent free’. The reality is no. West Ham will pay a reported £2.5 million in rent each year, Roan summarises that the cost of stadium utilities, security, maintain the pitch and goalposts and corner flags will cost somewhere between £1.4 million and £2.5 million. Let us assume that it will cost £2.5 million eating up the rent we will pay. On top of this however the London Legacy Development committee own the naming rights to the Olympic stadium, as confirmed by David Gold Looking at other stadium naming rights this can range anywhere between £7 million, at Derby’s iPro stadium, and £80 million at Man City’s Etihad stadium.
It is a fair assumption to make that since the LLDC own the naming rights they will get the majority of the revenue this generates. However let us assume that the taxpayers are getting the worse possible, a 50/50 split and those negotiating the naming rights do a poor job and get Derby’s level of income. That is £3.5 million and it will be the presence of West Ham and the prospect Premier League football, and the worldwide audience it attracts, bringing in the sponsorship not the concerts or cricket matches. On top of this West Ham will pay a share of food and catering sales. West Ham’s current catering deal earns them £6 million a season. It is therefore not unfair to assume this will increase to circa £10 million at Olympic stadium, with a bigger stadium and more space. Even if it was just a 75/25 split we are looking at a further £2.5 million. And let us also not forget the increased revenues in the local area for businesses from having 50,000+ people every other Saturday.
Therefore you could say West Ham’s value to the taxpayer is at least going to be circa £6 million a season. And that is probably going to be on the low-end. The cost of the Olympic stadium, as a whole, was reported to be £701 million in June. So if West Ham only bring in £6 million a season over their 99 year lease, the price for West Ham would be £594 million. Not bad for the tenants who only have the right to use the stadium for 23 days a year and see none of the profits from other tenants. It is down to the LLDC to bridge the gap through other activities, the T20 cricket matches and concerts that will also be held there.
That is the part that is frustrating over these articles that bring into question the Olympic stadium deal. The lack of reference to the other people who will be benefitting from use of the Olympic stadium. The focus on ‘West Ham’ makes it looks like it is our stadium, and we will be getting money from the rugby, cricket, concerts, athletics and anything else that happens in the stadium. Far from it. We will turn up on specific days and leave again. Our actual involvement with the day-to-day running with the Olympic stadium stops there, so why should we be asked to pay for everything? It has been forgotten that we agreed a deal to buy the Olympic stadium and take on its costs. However Tottenham and Leyton Orient applied for judicial review and had that decision overturned.
Prior to the questioning of the LLDC by the London Assembly last month, the Greater London Conservatives said it would take West Ham ‘just 7 years to pay back the £253 million taxpayer contribution’ at a cost of ‘£57 per ticket’. Again though the question has to be asked, this is not our stadium, we are only tenants when was the last time it was the tenant’s responsibility to pay for renovation of the house? Ultimately we are paying back the taxpayer contribution but over the course of a number of years, in order to maintain the prosperity of the club, so it can increase its revenue and generate more money to give back to the taxpayer.
Aside from criticism from the BBC we have also seen a growing increase of London clubs asking for a public inquiry into the deal. Over the last few years we have also heard Barry Hearn criticise West Ham’s deal for the Olympic stadium almost every day. The Charlton Athletic Supporters Trust are the latest to add their voice to the calls for a public inquiry. They are concerned by the ‘commercial impact it will have on Charlton’. They theorise that because the deal is ‘prejudicially favourable to West Ham’ and West Ham will be able to offer ‘considerably discounted tickets south of the river’ which is now well-connected to the Olympic stadium because of the Olympic Games.
Now I do not blame them for looking after the long-term future of their club but the truth is the Olympic stadium is not the biggest threat to their ticket sales. West Ham already offer discounted tickets to bring in new supporters, the kids for a quid sales always prove popular. The fact that Premier League games are available to be streamed online, if you know where to look, is another threat.
I like Championship football, but the younger generation want to watch Alex Sanchez, Eden Hazard, Sergio Aguero and it has become easier for these fans to be supporters of these clubs. Ultimately if they want to go to see their local team play they will. The Olympic stadium deal is likely to have little bearing on this. It is down to Charlton to find new ways to draw in new fans. They offer a few deals themselves. They have an annual football for a fiver match and last season they had the cheapest season ticket in the top four divisions. For their worst view it costs just £150 and an Under 11 accompanied by an adult only has to pay £25 for their season ticket. Even with the discounted tickets on offer that Charlton’s trust fear, the cheapest season ticket for our worst view is going to be £289. That price is bound to bring in some new season ticket holders but I would imagine the vast majority of those will be people who had to give up their season tickets at West Ham in the past due to rising costs. Those that are going to get a season ticket because they are cheap are going to go locally.
Charlton is an easier journey for me than West Ham (one train ride compared to 2 buses and 2 tubes) and I went a few times last season. It is a good club, but the atmosphere was quiet and I noted how many of the supporters around me were old. Nothing was there to entice me back aside from the easiness of the journey. I went to the pre-season friendly between Charlton and West Ham and they had a fun fair in the car park for the kids, things like that and their cheap ticket prices are what will bring in new supporters. Not asking West Ham to price their own fans out of going to games.
At the end of the day though, the contracts have been signed for the Olympic stadium. The LLDC confirmed when questioned by the London Assembly that there were no break clauses in the 99 year lease for either side. Therefore if the deal was to be renegotiated there would involve a substantial pay out from the Government and a lot of legal issues. You do not sign a contract and allow the people to sell their house only to then move the goalposts. If the taxpayers do actually want to pay for a new stadium for us then break the contract and let the Olympic stadium eat away at the public purse. The time for debate was a few years ago. Not now. The Olympic stadium deal is good for West Ham, but to pretend like we are getting it cheap at the taxpayers’ expense is not the full truth.
