West Ham’s Olympic dreams cause new row with club neighbours

By Paul Nicholson
April 27 – The row over West Ham’s move to London’s Olympic Stadium was re-ignited last week with Charlton Athletic Supporters Trust (CAST) seeking a review of the terms of West Ham’s rental agreement at the venue.

The West Ham move to Stratford has been shrouded in controversy since the club was awarded the stadium by the London Legacy Development Corporation (LDDC) for an annual rent of £2-2.5 million. West Ham’s was the highest bid for the occupancy of the stadium, a bid process which has since passed judicial review.

The club is contributing an estimated £15 million to the £296 million reconfiguration costs of the stadium to accommodate the club after the stadium has hosted the World Athletics Championships. But the XAST statement says the club should be paying more. The Boleyn Ground, which West Ham will sell for redevelopment, is valued at least £71 million in its accounts as a football ground, but which has been sold for considerably less to Galliard Group as a building plot (no figure for the sale has been released).

By way of comparison, the CAST statement points to Manchester City who pay £3 million a year rental for the Etihad Stadium (formerly the Commonwealth Stadium) while Ajax Amsterdam pay €9 million a year for the Amsterdam ArenA. They also note that West Ham are paying 8% of the capital cost of the reconfiguration of the Olympic Stadium, the City of Manchester and the club each contributed 50% (£20 million each) for the conversion of the Commonwealth Stadium.

The comparison is not entriely accurate as West Ham will only have 25 days of usage of the stadium a year, plus any naming rights income will be returned to the LDDC. West Ham will also share catering and pouring rights in the stadium as well as providing 700 new jobs and taking care of stadium maintenance costs.

However, CAST claim that the current agreement favours West Ham to the degree that it could disadvantage Charlton Athletic commercially, hence affecting its ability to trade in a free market.

“We believe that the terms of the agreement put far too much financial burden on the taxpayer; and that as a result West Ham will feel able to offer heavily discounted tickets south of the river in Charlton’s catchment area, which is now well connected to the Olympic stadium thanks to the transport links built for the games,” said a CAST statement.

“This presents a severe commercial threat to our club, whose long term future it is our mission to care for and seek to preserve. A re-negotiation of the contract which requires West Ham to pay more will oblige West Ham to focus more on filling the stadium with core West Ham support paying prices similar to those at other FAPL clubs in London…”

“Put simply, the taxpayer should pay far less of the capital costs than is currently planned, and West Ham should pay back far more in rent to the taxpayer. If this re-balancing were to take place, West Ham will still have excellent commercial prospects, but they will not be able to threaten the commercial health of other clubs (particularly Charlton) using taxpayers’ money.”

The award of the stadium to West Ham, who have already announced discounted tickets when the bumper new TV deal takes effect in 2016, also caused protest from Leyton Orient’s then-owner Barry Hearn. Orient are the closest club to the Olympic Stadium but were excluded from any use of the stadium. The Orient bid was considerably lower than West Ham’s.

West Ham currently don’t have difficulty selling their current stadium and it seems unlikely they will need to rely on supporters of other clubs to fill the Olympic Stadium to watch Premier League football. Certainly West Ham said they did not want or exepct to pull fans from neighbouring clubs, nor would then persue a ticket marketing strategy that did this.

At the time of the decision to award the stadium tenancy to West Ham, Hearn pointed out that West Ham was a limited company with a turnover of more than £100 million but was being gifted a public and national asset that cost more than £650 million of taxpayers’ money for peppercorn rent and virtually in perpetuity. That may be so but the West Ham deal was the best commerical deal on the table at the time.