West Ham United’s move to the Olympic Stadium has been mired in controversy in recent weeks, as it has been revealed that the taxpayer will front the bill for services such as cleaners and keeping the heating on. There have been calls for more transparency and a review into the bidding process, but has anyone done anything wrong?
The London Legacy Development Corporation (LLDC) appealed a ruling that they had to give full disclosure on the deal with the Hammers, this has bought them a few months. It has also raised suspicions. In light of recent activity within FIFA and UEFA being exposed, leading to both their presidents being suspended, there is a murky air around the bureaucracy in football usually reserved for politicians.
The main reason West Ham and the LLDC claim it is improper to release details is down to commercial sensitive information. In the current climate of revealing extensive accounting to UEFA for FFP purposes this is an extraneous request for privacy. What compounds the remark is West Ham are effectively moving into a council house, not a privately owned property.
It is the use of public funds that has most angered opponents. The cost of transforming the stadium has escalated to £276m from an initial estimate of £160m, West Ham will pay only £15m of this. It is yet to be officially confirmed, but it’s expected the Hammers will pay approximately £2.5m a year in rent, the figure fluctuating depending on league and European performance.
For that yearly outlay they get a stadium with the following services included: undersoil heating and floodlighting; medical facilities; cleaning; CCTV and security force; all the scoreboards and running of pitch side LED advertisement boards.
Vice-chairman of West Ham, Karren Brady, claims she was obliged to get the best deal for her club but promises it doesn’t impact on the taxpayer. She can’t be criticised for working so hard to get such a good deal, it’s her job. What isn’t her job is to ensure the taxpayer benefits, that’s down to the local council, UK Athletics and the government. For all the anger aimed at West Ham, they are almost the innocents in all of this.
The club went through three bidding processes and came out comfortable winners. It’s hard to imagine Tottenham Hotspur gave such a weak bid when going head-to-head with a rival club. Spurs were reluctant to build a new stadium opposite their current location due to the restriction with ultimate capacity there. Yet, that’s the move they’ve been forced into.
To put the West Ham deal into context it needs to be judged against a previous example of a club taking over a legacy project. When Manchester City took over the Commonwealth Stadium for the start of the 2003/04 season they too had to pay toward a conversion. The club fronted £20m of a £42m bill. Instead of rent they handed over half of match day ticket revenue if the attendance exceeded the Maine Road limit of 32,000. This has recently been renegotiated to £3m a year.
If you apply inflation for the 15 year time period that has elapsed, £15m from £276m appears extremely under-priced and a figure Spurs surely could have competed with. The rent, when you consider the London tax element, is also a snip.
This is why LLDC needs to place all the figures into the public forum and explain each part of the decision making process. A corporation is set up to serve the people, in this case the taxpayer, and shouldn’t be asking for the sort of non-disclosure reserved for a private business transaction.
Only when all the facts are revealed can West Ham and the LLDC be fairly judged.
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