In the last week we have seen calls by former Leyton Orient Chairman Barry Hearn and then Labour Shadow Minister Chris Bryant to reveal the so called ‘secret deal’ that the LLDC completed with West Ham to become the anchor concessionaires of the Olympic Stadium.
Multi millionaire Mr Hearn who leases Leyton Orient’s ground for £1 per year for 1,000 years amusingly claims he is the champion of tax payers.
What secret deal? We know West Ham will pay £15m up front towards the conversion costs, we also know West Ham will pay between £2m and £2.5m in rent per year while they remain in the Premier League, dropping to £1.2m per year if we relegated to the Championship. The rent is index linked over the 99 year term so the rent will slowly increase with inflation.
We also know West Ham will share some of the catering and pouring rights but will not share any of the naming rights unless they sold for an overinflated price. West Ham will not be paying for policing, stewards, utility bills, pitch management or other associated costs in running the Stadium. West Ham will receive 100% of the 3,500 corporate seats and boxes and it will retain 100% of the ticket revenue for all matches.
My understanding is the only reason the deal has not been made public is due to commercial sensitivity on the discounted price West Ham received. The French stadium operator Vinci will operate the stadium and sell the remaining days to potential hirers. Obviously it would prefer that West Ham’s deal is not a public document in order to get the best possible rental and return for tax payers.
It is estimated West Ham may contribute over £300m in rent over 99 years which will be returned back to the tax payer once the index link and £15m contribution is factored in. However, the real value of West Ham being the anchor concessionaire is the draw of the West Ham and Premier League brands. LLDC are likely to sell the naming rights for over £10m+ per year together with extra advertising revenue using the LED wrap around the stadium. Add the extra revenue from renting the stadium out for 340 days per year it is not used by West Ham and the lucrative catering and pouring rights from all these events then you soon get eye watering numbers which will eventually turn a profit for the £702m invested.
Without West Ham, the Olympic Stadium would be a white elephant and would have cost the tax payer a fortune by remaining empty. Tax Payers should be thanking West Ham as we were the only viable option and our occupation helps create a real viable business creating local jobs and wealth.
As for super rich Mr Hearn, well we all know he doesn’t a stuff about taxpayers and is only interested in self publicity. MP Chris Byrant is only jumping on the band wagon to score political points with the government and it is nothing to do with championing tax payers either. Ironic in some ways as it was a labour government that was short sighted to get us in this mess by not making it a stadium for suitable for football un the first place.
In my opinion the West Ham Olympic Stadium ‘secret deal’ is great for West Ham and the tax payer.
Who cares Sean what they think,the ink is now dry on the contract and the others wished they had our new ground,
We did not have to burn down someone’s business to get our ground,
We did not pay £1 a year for our lease,
They do not like a new big boy on there patch,
We will be a top 4 club within 5 years
And they will still be little people with big egos
Well written Sean! I thought we’d seen the last of Hearn when he quit Orient but clearly jumping ship and abandoning Orient hasn’t removed the screw up his arse! I’m not even going to go into my feeling on the Labour Party!
Agree with everything Sean,Labour had no real plan for the future and something had to be done,we were the best option.
But be careful this topic can lead to mass debates on State Aid by masters of mass debating lol
I still can’t get may head around it. Yes, we were lucky that the OS is on our doorstep. But the government surely cannot build similar stadiums for all other clubs in the country just because West Ham are allowed to rent the place in order to play their games there.
Or you might have to make a rule that the government cannot use those publicly funded facilities for renting out or selling to private companies (or football clubs) as a matter of principle.
Then of course the criticism would be that those facilities lay idle with generating no money for the taxpayer.
How do you solve this ?
One more thing Sean. Regarding the naming rights you mention that West Ham will only get a share if the sponsorship deal reachesan inflated level. Is that really true ?
As that in reality could mean we will not see ANY naming rights share over our 99 year lease, despite Premier League/West Ham football being in the OS would be the main or even only reason why someone would be interested in buying the right to name the stadium.
I am really surprised to read that. That information alone in my view could be golddust.
As that would represent some serious value for the taxpayer and may shut up some of the state aid critics.
In an otherwise excellent article I think Sean is wrong about the naming rights. I don’t think we start to get a share at an ‘over inflated’ price, rather we share in those rights once they reach a certain figure. So if it gets to £5m pa we share in everything over that.
Which as Sean rightly suggests the naming rights could be £10m plus a year (the Emirates gets at least this amount) it could net the club a million or two a year.
Speaking of White Elephants has our former so called messiah got a job yet or is he still wiping his brow with £50 notes supplied by West Ham, if ever there was a need for a government enquiry into a total waste of money surely this is more important?
He’s currently exploring the universe as there isn’t currently a team on this planet worthy of him or his tactic.
Thanks for the update did ask ITK and heard nothing back from Bradley Branning so was a little concerned
Ahh the all seeing,God praise his name,Bradley only deals with issues of a higher nature as decreed directly from heaven. Sam is the past and he only sees the future lol
Yes Bradley our very own Sauron from lord of the rings perched in his penthouse at Canary Wharf gazing down on all the football agents in London with his all seeing eye…or just reading the daily star with a roll up in his mouth thinking of what he can cut copy and paste onto wet pants
Haha it’s one of the two options but it remains a mystery
The big word after the Olympics was ‘legacy’, which was a complete load of rubbish – the Taxpayer has now had to stump up another £700 million odd to make the stadium viable for the future – what a complete joke.
Tessa Jowell, Seb Coe and all the other dead-legs have a lot to answer for!
It’s not West Ham’s fault that they’ve got a great deal from all this mess – good luck to the Club for their shrewdness in making tge best out of a bad job!
Not another £700m, thats the grand total. The extra bit is £240m or something like that
The Olympic stadium was built with a legacy in mind but no one actually thought of what that legacy was going to be. Mr Hearn spouts about a secret deal but maybe he should invest his time in asking the question why was countless money poured into a venue without any set plan of what is was going to be used for after 2 weeks of Olympic events. The amusing fact is a politician from a party who delivered a giant dome with no thought of what is was going to be used for after,the same party that delivered a giant stadium with no idea of what it was going to be used for after has the cheek to question what it is actually going to be used for now. As for Mr Hearn a man who has mugged off his own club to line his own pocket for a solitary pound coin outlay is truly laughable.
Great analysis and good article. Ken Livingstone was instrumental in building a stadium that has cost so much to convert.
It’s not a party political point though Sean, the fact is there are more Conservative MP’s questioning the deal than Labour.
Their argument isn’t one of the legacy or whether anyone else could have used the stadium, that’s irrelevent, it’s whether the deal that West Ham struck is in breach of State Aid laws, their argument, along with bodies like the Charlton Supporters Trust is that as the conversion is solely to make it fit for a football stadium and the amount of government money being spent on it, £270m, adds up to state aid.
Until the deal is made public this row will just keep rumbling along.
Let’s get it absolutely clear the stadium has been refurbished NOT just for West Ham. In this summer alone athletics, the RWC, rugby league and motor sport will benefit from the new roof, improved spectator facilities including hospitality. In future years some of these groups will also be able to maximise the retractable seating.
West Ham are a tenant. To use a housing example the landlord has invested in refurbishing the house to get more value out of a letting.
What would have been the return on a 25,000 athletics stadium, minimal. Yes, West Ham will be the major user, but it will also be used by many others over the years. The real culprits are those who did not have the foresight to see that the only way for the stadium to not be a burden on the public purse in legacy was for it to be a multi-purpose stadium with a major football club as part, but only part, of the solution. You could also argue that in some respects the club will be worse off in future by being a tenant in the stadium and not owning it, therefore not being able to borrow against it.
The conversion costs are not over 700 million though. The building costs as such had nothing to do with West Ham, that money served its purpose by having the Olympic Games.
Also the conversion costs I believe completely will be paid by West Ham over the years by giving the lion’s share of the naming rights to the taxpayer. So the state aid would not be over the amount as such but rather over stretching the payment over a number of years to make it feasible for West Ham to make this move.
It’s a bit like a credit terms given to West Ham which might be a problem.
If West Ham on the other hand had all that money readily available they would probably build their own stadium and the taxpayer again wouldn’t know what to do with the OS.
So I believe if the government wants the OS put to use and get money back for the taxpayer they either need to sell it (prevented by Spurs and Orient) or make it fit for a football club to rent.
And I don’t see how you could realistically expect any football club to spend 200 million or so upfront without owning the stadium.
I have no answer how this state aid issue can be solved, but I hope West Ham’s and the LLDC’s lawyers have some good answers.
So do I,
The uncertainty isn’t helped by the deal remaining secret.
When this was first brought up on another site I didn’t think much of it to be honest, but I’ve since done a little research on the subject of state aid and I must say we are sailing very close to the wind on this.
Hmmmm,State Aid,where have i heard that word once or twice before recently 😉
Yeah I thought that too, it’s not a subject to get your juices running is it?
But it is a serious matter for us…….potentially.
Certainly doesnt get my juices flowing & whether we have done wrong or not i cant personally change the situation so i will not lose to much sleep over it for the time being,lol,i am all about whats on the pitch & the transfer market atm.State Aid can be sorted out by hierachy of the club.Im just a humble supporter 😉
Pretty much exactly where I was until I read up on it.
Johnsey, who I think it was brought it up on the other site does appear to know what he’s talking about and the penalties are very clear.
I just wish everything was out in the open NOW
I did mention earlier what this would lead to a S—- A– debate. It’s a load of sabre rattling the contracts are signed and the work is nearly complete any legal challenges if they haven’t already been exhausted will be met by a counter lawsuit from the club as they have a binding contract to be a part tenant along with a number of other concerns. So it is not solely a football stadium but an athletics and multi purpose stadium as was decreed in the original botched plan.
With respect mate I think you’re missing the point.
There is no challenge to the contracts or the deal, they have been cleared in a court of law, the whole issue evolves around whether the conversion into a football stadium, the other users wouldn’t require it to converted, at a cost currently of £275m should be met by the state.
If it can be successfully argued that the state funded conversion has given West Ham an advantage over their competitors then we could be in a bit of a fix.
I think that’s the point being made, I might be completely wrong, it wouldn’t be a first.
This could be true but it’s conjecture at the moment with countless outcomes possible. I’m not fretting about tomorrow when today isn’t finished. We’ve been through a pretty lousy 7 or 8 years with the last two particularly grim and right now we’re on a high so I say enjoy it. The legalities and finer details of SA (they’re not good initials for WHU) will be sorted by the Daves,lawyers or even richer new owners all we can do is support the team through thick and thin. Never sure which is better thick or thin but whichever it is I’m enjoying it now lol
Sean you should have wrote this for Wetpants they could have reached there 50 % quoter
Very quickly,
You do seem to have a bit of an obsession with other sites mate 🙂
Lol,whats wrong Fob,have you been black balled by Whtid? Had to come slum it with the rabid dogs & ignorant pigs?
I don’t have anywhere I call home.
I’m not exactly in the clique over there either.
I can’t see why people have to slag off a site full of West Ham fans though?
Shouldnt you be asking that question there,was them called us ignorant pigs & rabid dogs.I dont feel any guilt about a bit of banter at some of their expenses after that.They can handle it,Monkeys Bellend knows the score 😉
It’s all just a little bit childish for me.
I’m 53 ffs.
I suppose some people will feel it’s alright to slag others off from the safety of their computer ( or in one persons case on here, their computer(s) )
🙂
I dont really give a f*ck about who is who, someone who isnt who they say they are or talk to themselves,i just come on here for a bit of banter with the lads.Not to change the world or gain other sites admiration or friendship.There could be ten people on here with twenty accounts,doesnt bother me.As long as they dont get on my t*ts its fine 😉
That’s fair enough.
I still think it’s a bit sad though 🙂
Again: West Ham will pay the entire conversion costs, just not upfront in one lumpsum as we don’t have that kind of money. If we did we didn’t have to rent a stadium in the first place but build our own.
If that were to happen though the government again had the problem of how to get money back for the taxpayer. The conversion is needed to get a football club in.
If that is state aid I don’t see the government ever finding a face saving solution to get money in for the taxpayers.
And the contracts have all been signed, the conversion is nearly done.
Just imagine the cluster**** if a European Court now decided that due to state aid issues West Ham couldn’t use the OS.
Imagine the counter suing from us and the LLDC. Bearing in mind the Boleyn also has been sold under a binding contract.
How many months did the LLDC, West Ham and their respective legal eagles sit over the negotiations of this deal ? I cannot believe they failed to spot and address the state aid issue.
How are we paying the entire conversion costs Hamburg?
Unless you’re including the rent we have to pay? It doesn’t work like that mate, also despite what Sean writes above no one know how much we will have to pay in rent because it’s shrouded in secrecy.
It’s not just the rent, apparently nearly all of the naming rights income initially will go back to tha taxpayer, covering the conversion costs over the course of between 10-20 years, depending on what kind of sponsor comes in under what deal.
Remember it is West Ham playing Premier League football in there that will attract a big sponsor in the first place, so you can actually attach this income to West Ham’s presence as well.
West Ham will not just pay 2.5 million or so a year rent and that’s it.
With naming rights sharing plus catering income you’re probably talking ten million a year minimum.
Either way I’d like the LLDC to start addressing this and not simply wait till another court case comes up.
Bloody hell,its a state aid attack.Glad i was on the p*ss this afternoon,lol.At the end of the day whats matters as fans is that it is only being called The White Elephant.I would only start panicking if we were all found in The Pink Flamingo 😀
Haha or the grey Hippo
All I can say is well done to the owners of West Ham United for noticing the possibility of playing in the Olymic Stadium in the first place ,,, and then pursuing the idea with determination and a hard head for Business .. The Hearns of this world ( who have sucked so much money from sports fans , from boxing to snooker ) that missed their chance because they were blind to the possibility are just being a bunch of Sour Grapes because of their own blindness and non-ambition . Leyton Orient , Charlton Athletic and a few others were never going to able to compete with a club that has a bigger fan base , and more ambition . As for Tottenham wanting the Stadium ,, well , the least said the better .
The Olymic Stadium was up for grabs from the start ,,,, West Ham grabbed it first .
It will either make us or break us ,, but we will die trying . Come on You Hammers .
Who,s this DICK called hearn? Is it MR.PASTRY come back, it sounds like it.