West Ham could get the Olympic Stadium rent-free – gratis – should the naming rights be sold for £10m per season.
This is based on the fact that the Hammers will share 50 per cent of the naming rights income over £4m so, at £10m, we would get £3m of free rent wiping out our £2.85m annual rent as it stands.
The share of naming rights is capped at the maximum rent West Ham pay so we couldn’t receive anymore were the naming rights to be in excess of £10m per year.
Following the publication of Olympic Stadium agreement West Ham will pay a base rent of £2.5m next season. If we finish in sixth place we would pay a further £275,000 as a performance payment with another £100,000 if we qualify for Europa League.
So our likely rent next season will be around £2,850,000, should the naming rights issue not give us an unexpected ‘free card.’.
This will upset the European state aid brigade but we understand the LLDC ran the legal agreement pass the European commission plus top lawyers expert who didn’t see a problem.
The truth is it would the power of West Ham and the Premier League brands that would attract a major sponsor for the stadium so it’s only right that we should share in the revenue.
If we get money back that’s great if not we just got the best deal in the world any way,
Just be great to play European football there next year,
Who cares,if it gets up other fans noses for a few minutes when they see it on News Now or wherever it is job done.Keep up the good work Sean,lol
Quite right No. 32.
And we will be paying more than the 2.5 million if the naming rights exceed 10 million as we will have to give up our share of the excess.
This seems like an article to make more people jealous, we won’t be getting the stadium rent free as regardless of any naming rights we will still be paying 2.5 million plus a season in rent.
I will re-read the agreement to see if I missed that. It’s been a long week
OK I have re-read the agreement this morning and I still make that we could get the £2.5m usage fee back in naming rights revenue share.
For the duration of the Naming Rights Term (which is 20 years), the Grantor (which is E20 LLP Stadium owned by LLDC/ & Newham) must pay each Event Year to the Concessionaire (West Ham) from the amounts held in the Naming Rights Account an amount equal to the income received by the Grantor (E20 Stadium LLP) in that year that is equal to 50% of the revenue from sale of the Stadium
Naming Rights that is in excess of the Naming Rights Base Amount, but only to the extent that the total amount payable to the Concessionaire in that Event Year is less than the sum of the:
(i) Usage Fee and Operating Costs;
(ii) League Position Payments; and
( iii) Performance Payments,
Usage Fee means the fee to be paid by the Concessionaire to the Grantor in accordance with Clause 20.1 (Usage Fee for Use of the Stadium and Other Payments);
20.1 Subject to Clauses 11.7(c) (Naming and Signage Rights) and 20.5 (Usage Fee for Use of the Stadium and Other Payments), the Concessionaire shall pay to the Grantor an amount equal to: (a) (i) £2,500,000 per annum for the Premier Match Quota in any Football Season in which the Relevant League Club Matches are played in the Premier League;
Hi Sean, thanks for the very detailed reply, if I understand it correctly I certainly hasn’t looked at the deal as closely as you, I still think that we will be paying the 2.5 million plus but having a rebate of upto the same amount, I.e we still are paying £2.5 m plus in rent irrespective of what we get back. I understand what you are saying the point was more that the article would make non WHU supporters more annoyed with the Lldc / us which dependant on your viewpoint is not helpful or is enjoyable etc. Thanks again though appreciate your effort
I would love it,absolutely love it if it worked out we got it free.Richard Hunt & his cronies would meltdown big-time.
Is it not even more money, given say a 50m deal over 5 years, wouldnt the 4m for the lldc come off first , and then split 50/50 the 46m at the end? just wondering.
Maranga, the naming rights is a 20 year deal. Let’s assume it is sold for £200m at £10m per year which is an ambitious figure. It would usually be paid in annual installments, E20 Stadium LLP would get the first £80m over the 20 at the £4m base figure per year. The remaining £120m is shared but is capped for West Ham at the maximum we would have paid in rent and performance payments. If we assume an average payment by West Ham of £2.8m per year we would £56m in rebates over the 20 years and E20 Stadium LLP would take the remaining £64m.
The stadium owners keep all the naming rights money, all we can earn is rebates from the amount you owe for £2.5m usage fee plus league position payments and performance payments
Cheers for the clarification on that Sean 🙂