West Ham and the Olympic Stadium
March 23, 2013 6 Comments
By Derek Van de Ven
It has long been known that West Ham would take over the Olympic Stadium in Stratford, East London after the Games. Boris Johnson and the government have repeatedly stated the need for it be sold rather than used for various national events, as it would become (and has been) a major drain on the taxpayer. The battle for ownership of the stadium was fought out between Tottenham Hotspur and West Ham, with Leyton Orient even arguing that due to their location they should be part of any deal, for fear of fans being taken away. Spurs would have perhaps had a much better chance of filling the stadium, given their possible partaking in the Champions League, and of late, competition for the Premier League title. However, despite West Ham’s relegation worries of a few years ago, they won the rights to the Stadium, largely because they planned to keep the running track (or most of it). The move from current home Upton Park to the Olympic stadium is expected to take place in time for the 2016-2017 season, providing construction is completed. However, up until today, where the necessary funding would come from has been a bit of a mystery. Now it all seems to be in place. The club will have the stadium on a 99 year lease.
In reality, West Ham, despite being guaranteed major occupants of the stadium, will pay only very little of the enormous cost estimated. The Treasury will contribute about £60 million, today confirming an extra £25 million on their part, which is the main reason the move can go ahead. The London Legacy and Development Corporation will provide a loan of £20 million, and another loan from Newham Council will provide 40 million. Boris Johnson is also expected to make a contribution. The go-ahead was finally authorised when the club agreed to up their part of the budget from £10 million to £15 million.
There are several areas that the money will go towards. The venue is not ideal for football, and especially for West Ham who struggle to fill the 35,000 capacity Upton Park, and thus the capacity of the Olympic Stadium will be reduced from 80,000 to 60,000. The main problem with athletics arenas is that due to the running track, fans feel far away from the action. Thus it will be partially brought forward, but not all the way. The roof will also be extended to cover all fans, and this must be completed by 2015 in time for the Rugby World Cup. West Ham want the stadium to be used for athletics in the future and intend to keep the Olympic legacy at the stadium, as well as use it for live music performances. This is the only reason West Ham’s bid was successful.
West Ham of course must pay back these generous loans. They will also pay £2 million annually to rent the ground and have agreed to share 50/50 all catering and hospitality revenue with LLDC, but will keep all ticket and merchandise sales revenue. The club directors, David Gold and David Sullivan have agreed to make a one-off payment to LLDC if they sell the club within ten years, and a proportion of any future sale after that. They stated that “the public should benefit from any money made” by West Ham’s future sale of the stadium.
The move giving West Ham ownership has always seemed an odd decision. Firstly, it is a huge stadium, it will be as big as Arsenal’s Emirates’ Stadium, and the third biggest football arena in England and West Ham are not as big a club as Arsenal. Thus if they can’t fill the stadium on a regular basis there will be little or no atmosphere inside, only harmful to the club. However the main question is of course regarding public money – Boris Johnson made it clear that the future use of the ground must not drain the public purse anymore than it already has. The Tottenham plan for the ground would have been largely privately funded, not costing the taxpayer a substantial amount more. West Ham are planning to contribute approximately 6-8% of the overall finance of the stadium’s conversion, hardly fair given that they will be the principal users. The decision seems to have been made on the emotional grounds that West Ham would preserve the “spirit of the games” something which could have been done much more cheaply. Spurs’ plan would have saved the public a lot more money and would have likely been much more successful for the club. Whilst geographically it makes much more sense for West Ham, in times of austerity it makes much more sense to allow Spurs to move. Thus it was emotions, rather than rationality that won the bid for West Ham.