Tag Archives: Wembley

Examining the rising costs of Tottenham’s £800m stadium

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“Brexit to blame as Spurs stadium costs double”, screamed the headlines this week, as it emerged the cost of the club’s new home has increased to an estimated £800m.

The eye-watering figure sparked concern among fans over the impact of the project on the club’s long-term financial future. In this piece, I will look at the £800m figure and the reasons why costs have increased so sharply.

Revised cost estimates

First the background: the new £800m estimate was revealed by chairman Daniel Levy in board-to-board minutes published by the THST, always one of the best sources of information on the project:

DL stated that the funds would come from different sources and that the cost of the stadium was now estimated circa £800m

In an email response to a question from a fan about why the stadium cost had seemingly doubled from the initial £400m estimate, chief executive Donna-Maria Cullen expanded further.

It is worth remembering that the original cost quoted for the stadium was some 7 years ago. This new ‘estimated’ figure relates predominantly to the stadium with some elements of substructure for the other builds particularly the Tottenham Experience. Brexit has added a straight 20% on costs for foreign goods due to the exchange rate, overtime working and increased construction costs similarly. Revised basement works also added to the cost. We are constantly managing costs and will continue to do so throughout the process along with funding plans to ensure the viability of the scheme.

Credit must go to Cullen for communicating directly with fans and attempting to ease concerns over the stadium’s viability.

As Cullen notes, this stadium project has been a long time in coming. A new stadium was first mooted in 2007, and planning permission for the old, 56,000 capacity design was gained in September 2010. The project then drifted for five years amid CPO litigation and interest in the Olympic Stadium site, before enhanced plans were approved in December 2015.

Understandably, the project cost has increased sharply over this period — it has become a bigger, and higher specification, stadium.

The first public estimate for the current version of the stadium came in December 2015. At a fan forum, Levy estimated the cost at £500m. This was in line with the financial Viability Report, which put the estimated bill for the whole scheme — this includes the housing and hotel component — at between £675m and £750m.

This £500m figure is a reasonable baseline — so if and when stadium costs hit £1bn, then we can talk about it doubling.

Explaining the jump

That said, £500m to £800m remains one heck of a jump — £300m is an awful lot of money: it is ten Moussa Sissokos, or 20 times the amount West Ham contributed to the Olympic Stadium rebuild.

In her email, Cullen outlined four key factors beyond the cost increase: the weakening of the pound due to Brexit, overtime working, increased construction costs and revised basement works.

Overtime costs are easily explained — go on the live webcams, and you’ll see workers on site for 18 hours a day, seven days a week. The timeline is phenomenally tight, with Spurs needing to complete work to a sufficient degree to ensure only one season is played at a reduced capacity WHL, and only one season at Wembley. Very soon, the club is going to have to make the decision on whether to knock down White Hart Lane — understandably, both club and contractors Mace will be want to be as far ahead at possible before crossing this point of no return.

On construction costs, the story of the club purchasing cranes is a good example of how costs can rise when the clock is ticking. The club couldn’t afford to wait for leased cranes, so instead bought new ones and will seek to recoup some money after work is finished.

Revised basement works appear to refer to changes to the design that were approved in 2015, prior to full planning permission being granted. The revised plans include more car parking and storage space, seemingly with the NFL groundshare in mind.

The final issue is the weakening of the pound, forcing up the price of imported equipment and goods.

A look at the five-year £/euro exchange rate highlights the problem Spurs have had. In early 2015, just as Spurs were at the peak stage of modelling stadium finances and cost planning, the pound strengthened considerably. For about a year, it hung there, and pretty much as the stadium was approved in December, it started to fall.

Screenshot 2017-03-07 at 6.53.42 PM

Cullen blamed Brexit — and without doubt, Brexit gave the pound a kicking. But the pound was already falling well beforehand — and if you look at the 10-year trend, we’re kind of back where we were for much of 2009 to 2013. The timing is unfortunate — Spursy? — but the club is far from alone in being caught unawares by Brexit.

In terms of magnitude of impact and the 20 percent cost increase on imported goods, it’s hard to gauge without knowing more about where materials for the scheme are coming from. We could be talking millions, or tens of millions. But either way, currency fluctuations have impacted the budget: on the plus side, the weak pound should help exports of crap squad players to the eurozone and China this summer.

Nice things cost money

Does this add up to £300m? In all probability, no. There’s one other factor that — inevitability — has led to an increase in the final costs of the stadium: the fit-out.

When the £500m project figure was first estimated, there was inevitably going to be a lot of uncertainty about internal fittings — how much do tunnel clubs, cheese rooms, sky lounges and state-of-the-art beer bumps actually cost? There is bound to be guesswork for these bespoke elements — it’s not like Levy is heading down to Ikea armed with a pre-budgeted shopping list and club credit card.

Through the build phase, Spurs have been tweaking plans for the internals of the stadium. In responses to questions I posed in the summer, it was clear that issues like in-stadium technology were very much a work in progress. It was reported that Levy was travelling around London skyscrapers inspecting lift fittings to ensure the right specification for the stadium.

This story about the Minnesota Vikings and their spectacular new stadium illustrates how costs can shift. It was decided, during construction, that another 400 in-stadium screens were required (and money was duly extracted from taxpayers), while expensive-sounding network infrastructure had to be developed to cater for increasing demands for stadium wifi. Meanwhile, stadium builders are continuously learning — during the build of the US Bank Stadium, it became clear that the new 49ers home, the Levi’s Stadium, was not sufficiently catering to fan demands for instant replay — so the Vikings increased the number and quality of in-house cameras. You can imagine Spurs doing something similar — the introduction of video-refereeing will mean fans will need to see more to understand the game. These changes are part of the future proofing of the stadium design, but potentially cost a lot of money.

Shifting financial situation

While costs have been rising, so too have club revenues.

In the 2015 financial year, club revenues stood at £196m. Figures for for FY 2016 will be released soon — they should show revenues climbing to around £210-215m, per my estimates. But from here, the increase will be sharp — FY 2017 will see the new Premier League TV deal accounted for, and should send revenues close to £275m. In the following year, revenues could potentially increase further if Spurs are able to play in front of a sold-out Wembley week-in, week-out. You get the picture.

The amount Spurs can borrow is tied to income. Initially, it was reported Spurs would borrow £350m from banks — in reality, there may be the potential now to borrow more.

In an email lambasting lack of action by local authorities that *mysteriously* found its way onto the front page of the Evening Standard, Levy mentioned the financing had not yet been finalized — in all reality, at least some portion must be in place given the scale of construction so far. It was reported that of the initial funding package, the first £200m would be loaned up front — it may be that this “bridge” part is in place, but Spurs are looking to tap more than £150m in the second phase. This is speculation, but rising costs and income, combined with recent public comments, suggests this may be a potential scenario.

In addition to Spurs earning more, as the project has progressed, the club will have gained greater clarity on feasibility of generating additional revenue. While two of the 16 non-Spurs major events are locked out by the NFL, no doubt conversations are underway in terms of other events, given the stadium is due to open in just 18 months. I have previously speculated that AEG may be involved in organising these events — a Twitter exchange with the head of AEG’s new rugby division did little to deter me from this view.

With greater clarity on how the stadium is going to be used, Spurs may be more confident in pushing the boat out on internal fit-out — more expensive sound systems, better resolution screens, or whatever it is.

In terms of other financing sources, nothing is yet confirmed on naming rights, while advanced premium ticket sales have begun — the club reported about 50 percent of premium packages are now sold. Pinches of salt no doubt required. There is some indication that Joe Lewis recently put a certain amount of money into the club — £20m or so — but this can’t be confirmed. I’m personally dying to know if the NFL is putting money in up front. But either way, with more than £100m spent on property/site prep/design and legal costs, at least £350m coming from banks, and naming rights/advance sales to roll in, Spurs are well on the way to £800m regardless.

Final thought

Given the context of the £800m figure — revealed while relations with authorities over the White Hart Lane station development are strained and amid ongoing dialogue on affordable housing — some caution is advised.

But taking the £800m figure at face value, it doesn’t appear an unrealistic amount for Spurs to spend. The club will have a lot of debt, but increasing revenues to service it. If you look at costs of recent stadiums in the US, £800m is still quite modest — the Vikings stadium cost $1.2bn, while the new Falcons stadium in Atlanta will cost around $1.6bn.

The next few weeks promises to be the most stressful of the entire project.

Brent Council’s decision on Wembley, due March 23, has a multi-million pound impact on Spurs — being able to play in front of 90,000 rather than 51,000 next season will make a huge difference to the club’s bottom line.

Meanwhile, the club has to make the agonizing decision on whether to knock down White Hart Lane. Any delays after this happens — for example during the demolition and excavation of the old ground — could leave Spurs homeless and at the mercy of the FA, who have another tenant — with a lot more money — lined up to take Wembley once we’ve moved out.

Just because costs are increasingly sharply, doesn’t mean they are spiraling out of control. It’s a high-wire act — but if Spurs can pull it off, the rewards are huge.

Thanks for reading. Please follow me on Twitter for more Spurs chat.

 

Spurs, Chelsea and two very different stadiums

Chelsea moved closer to joining London’s “60,000” club on Wednesday night after Hammersmith and Fulham councillors approved plans for their extraordinary new stadium.

While the meeting for Tottenham’s new stadium in December 2015 stretched on until 12.29am and culminated in a fingernail-biter of a vote, Chelsea’s stadium breezed through this critical planning hurdle with a unanimous vote of approval at a distinctly civilized 10.22pm. Decisions over new conservatory extensions have taken longer.

Ultimately, the Herzog de Meuron design swept all before it and meant approval was an inevitability. It was simply too spectacular a piece of architecture to be rejected, no matter the deep inconvenience about to be inflicted on local residents during four years of construction, the land grab over public infrastructure, and the loss of housing and hotel rooms.

Chelsea have work to do before construction can begin: Mayoral and other consents are required, agreement is needed with Chelsea Pitch Owners, the fan group that owns the Stamford Bridge freehold, and deals must be reached to buy out any remaining apartment owners in Chelsea Village. Fortunately money isn’t a problem for Chelsea, as that will be an expensive business.

Chelsea acknowledged that the timeframe had “slipped” in the planning documents, and they won’t be ready to leave Stamford Bridge for Wembley until the end of the 2017/18 season. Provided work is completed on time at New White Hart Lane, this means Spurs and Chelsea should avoid the world’s most uncomfortable houseshare.

The two stadiums will inevitably draw comparisons, but these are two very different projects, and each speaks volumes about the club and its situation.

For Spurs, the new stadium has always been about levelling the playing field. Constrained by the size of White Hart Lane, Spurs have slipped further and further behind wealthier clubs in financial strength. Spurs have clung onto the coattails of the big spenders with admirable tenacity and some Mauricio Pochettino magic, but it’s been a gruelling business and you can only defy gravity for so long.

This need to maximise the opportunity a new stadium presents has shaped the project, from the moment the early designs were released with the words “Naming Rights” emblazoned on the roof in giant letters.

The newly released stadium promotion video demonstrated this: it’s a home for Spurs, but also for the NFL and for concerts. The club ensured it can hold up to 16 non-THFC major events per year — it is likely that AEG, operators of the O2 and would-be partners in the failed Olympic site plan, may be involved to ensure every one of those 16 events slots is used. Concerts, rugby (European champions Saracens are based just down the road in tiny Allianz Park), boxing, T20 cricket and UFC — you name it, the stadium will host it and Spurs will take their cut.

Daniel Levy knows that Spurs have to make this stadium count — this is the silver bullet, and it can’t be wasted. No effort is being spared on the interior details, and the fan experience should be unrivalled in European stadia. The design is modern, but not flashy and certainly not “signature” — the real investment is being made inside, not on the exterior. Above all, it is about money — Spurs have been fighting with one hand behind their back for years, and now it’s time to punch back.

For Chelsea, Stamford Bridge isn’t so much a commercial project as a personal one: The stadium is both a monument to Roman Abramovich, and his personal legacy to Chelsea.

If his first decade as owner was about buying Chelsea’s way into the elite — the club technically “owes” him more than £1 billion — the second is about cementing it. The project makes less commercial sense than Spurs with a smaller capacity increase and more recent development of Stamford Bridge, although Chelsea had precious few options for further growth without abandoning west London altogether.

The sheer audacity of the design, with its lattice roof and columns drawing inspiration from Westminster Abbey, takes the breath away. It’s not just a stadium, it’s a symbol — of Abramovich’s extraordinary wealth, of Chelsea’s ambitions, of the sheer magnitude of football now. These aren’t stadiums any more, they are cathedrals.

Perhaps it’s just the name Roman, but rather than visions of London — Westminster Abbey, Battersea Power Station, the Tate Modern — to me the design harks back further, the huge exterior arches and vaunting brick walls bringing to mind the original sporting stadium, the Coliseum. It’s Roman the Emperor, on a Triumph through London, erecting a vast monument to his own glory; all that’s missing is the white horse and vanquished rival Premier League kings in chains.

It won’t be for everyone: there are hints of Albert Speer and Welthauptstadt Germania in its epic scale and Teutonic coldness, and questions will linger about whether Abramovich has really earned the right to redefine London’s skyline in this way.

While Chelsea will surely take on significant financing, the suggestion is that Abramovich will personally fund the bulk of it; it’s unlikely Chelsea will have to engage in something as grubby as naming rights sponsorship. The stadium will host football only. Say this about Abramovich: like him or not, his commitment to Chelsea has been unwavering. He’s the ultimate oligarch, still there week-in week-out nearly 15 years later, still bankrolling his favourite toy.

The law of London football means Spurs fans and Chelsea fans will find ways to undermine, mock and goad each other. The new stadia will be no exception. New White Hart Lane is shaped like an egg, New Stamford Bridge like some sort of novelty vegetable shredder; you get the drift. I hope the ill-feeling continues at boardroom level and on the pitch — it’s surely the best rivalry in the Premier League at the moment, by a distance.

The same one upmanship that made Spurs trump Arsenal in capacity will be in play — stadium development is linear, and Chelsea will learn ruthlessly from Spurs to make sure their’s is “better”. But ultimately, the more you compare these projects, the greater the contrast becomes.

Here’s one thing we can agree on: Spurs and Chelsea are both going to have world-class stadiums within a few years, and thousands more fans are going to be able to see their team live. So a bit like West Ham — except without the need for binoculars, taxpayer subsidies and riot gear.

Thanks for reading. Please follow me on Twitter for more articles and general Spurs chat. See more of my stadium pieces by searching in the stadium category in the right-hand navigation, or in the Deep Dives link above.

Spurs stadium update: New information on capacity, design and other details, plus analysis of timeline and finances

 

stadium screenshot

Image by @ACEinBEDFORD

In recent months, huge progress has been made on the Spurs stadium project.

Key approvals have been gained, allowing construction to hit maximum pace. The stadium, as the timelapse video for May shows, is starting to emerge from the ground. An agreement has been reached for Spurs to play at Wembley in 2017/18, and Champions League games will also be played at the national stadium next season. Demolition work has started on the northeast corner of the ground.

By the final match of next season, the new stadium will be starting to emerge out of the old one, and the future of the club will be visible for all to see.

It will also look as weird as all hell, as this video from @ACEinBEDFORD shows.

It was a small thing, but I particularly liked how Spurs have added club logos to the giant cranes on site. To me, this bodes extremely well for the final finish of the stadium, and highlights the attention to detail in the planning phase. Spurs will be spending hundreds of millions on the stadium, but sometimes it is the tiniest of details that make the biggest difference when it comes to making a new “house” feel like a home.

In this update, I will discuss timeline, project finances and the NFL, and also provide some additional details of the project in terms of final capacity, colours, pitch and in-stadium connectivity.

You can read my previous reporting on the stadium here.

Attention to detail

While the club is doing a good job providing images, videos and updates on construction, there is really no end to the amount of information Spurs fans want.

I put a few questions to the club about the minutiae of the project, and to their great credit, a club spokesman gave me some answers

First, I asked about the final capacity of New White Hart Lane. In the planning documents, the “gross total” of all seats is 61,461, or 61,131 if you strip out seats allocated to media and players. However, this total was done before Mace, the construction contractor, had done its assessment. Are there any revisions to this number?

A club spokesman said the final seating number was not yet decided, but would be close to the 61,461 number.

“The capacity of the stadium will be approximately 61,000 and the exact figure continues to move slightly as we refine the detailed design, although we shall operate within the tested capacity established through the planning process,” the spokesman said.

My second question was about the pitch. The playing surface at White Hart Lane has been excellent for many years, greatly helping attractive football.

How were Spurs going to go about finding a new pitch, and were there plans in place to ensure an equally good playing surface and to avoid the issues Wembley experienced in its early years? Would it be hybrid or grass?

The spokesman confirmed the club was currently working on this issue and carrying out testing of various playing surfaces.

“We currently use a hybrid surface at White Hart Lane and we are in the process of examining and testing a number of different systems to ensure we achieve the highest possible quality surface at our new stadium,” the spokesman said.

My third question was a pretty basic one, but I’m not sure I’ve actually seen it confirmed beyond the mock-up images: What colour are the seats going to be? Will they be the “royal” blue currently at White Hart Lane, or will it be a switch to a “navy” blue?

“We shall be using traditional Spurs colours,” the spokesman said.

So there you have it.

Fourth, I asked about atmosphere, and specifically if there were any stadiums, for example the wonderful (and Populous designed) Grande Stade de Lyon, that Spurs/Populous are “learning from” in the design.

“Atmosphere has always been at the heart of our designs and we have studied some of the finest stadia in Europe best known for this,” the spokesman said. “We are looking at all aspects in terms of how we can create and retain an incredible atmosphere including the distance of the pitch from the stands, the tightness of the bowl and the introduction of a single tier south stand.”

Finally, I asked about connectivity. Much play gets made of how technology such as in-stadium wifi is incorporated into these projects, but, to be brutally honest, it doesn’t always work as well as intended. Would the club outsource this sort of technical aspect?

“We are working hard to ensure we deliver on our desire to make this stadium one of the most technologically advanced in Europe. We are currently in discussion with specialist contractors,” the spokesman said. “Technologies are updated continuously so we shall look to future proof too.”

Tight timeline

It is no secret that the timetable for this project is tight, and minutes published by the Tottenham Hotspur Supporters’ Trust of a meeting with club executives last month confirmed this.

Mace, the company overseeing construction, is now working 15 hour days, seven days per week. According to Daniel Levy, construction is on schedule, “but it remains a hugely complex project.”

Levy confirmed that Spurs had requested two matches at the end of the 2016/17 be played away from White Hart Lane to give more time for demolition and construction. This isn’t quite the “last resort”, as a block of fixtures could also be requested away from New WHL at the start of 2018/19 season. But it shows just how tight it is that every bit of extra time is being sought.

The club has announced a Wembley deal for 2017/18, but reading between the lines of reports into the deal, a “second-year option” has in all probability been discussed in case of delays. And with approvals still needed for associated works, and the myriad logistical challenges that come with building a 61,000 capacity stadium in a dense part of North London, we shouldn’t kid ourselves that delays are possible.

I’m sure if you zoomed in on the webcams on site you’d see Kevin McCloud wandering around, as this is the ultimate episode of “Grand Designs”. And you know if you watch the programme, the contractors never deliver the bloody glass on time.

The good news for Spurs, in terms of Wembley availability, is that Chelsea appear quite bogged down in their plans for redeveloping Stamford Bridge. As I reported in April, Chelsea have yet to secure key consents and will have to go through another public consultation due to changes to the design.

Money and Naming Rights

In the minutes published by THST, Daniel Levy provided an update on the financial side of the project. He confirmed that the amount invested so far had risen to £150 million.

Meanwhile, contrary to ITK chatter, naming rights have not yet been put to market, but will be “shortly”.

It will be fascinating to see what Spurs can achieve in this regard. Personally, given the way the club is falling behind the likes of Chelsea and Arsenal in commercial deals, I’d be cautious in expecting too high a figure. However, with the upswing in on-field performance and exciting homegrown core of players, not to mention the NFL tie-in, Spurs should be a far better commercial proposition now than in recent seasons.

A concern of mine is that Spurs may seek to bridge any gap in funding by simply piling up more debt on what will already be a pretty large load — £350 million has been promised by banks. In the minutes, Levy addressed this concern, loosely, noting he was “aware of the level of debt the Club could sustain and there were lots of options open at this point.”

Levy also hinted at the possible structuring of the stadium from an ownership perspective, with the establishment of an SPV (a special purpose vehicle, which sounds more like something you need to get across the construction site than a financial arrangement).

According to filings with Companies House, Spurs registered two companies recently which point to such a structure: Tottenham Hotspur Stadium Development Limited (April 26) and Tottenham Hotspur Stadium Limited (April 27).

There are no details on these companies yet, but nonetheless, it indicates that the financial and legal structuring is also being put in place alongside the steel and concrete.

Spurs and the NFL

I wrote in detail recently about the NFL and how its plans for a team in London appear to be kicking into a higher gear.

In writing this story, I learned from an NFL UK source that the NFL is having regular meetings and conversations with Spurs through the construction phase, and feels “fully engaged”. The relationship between the NFL and the UK was characterised as “excellent” and “ongoing”.

This is hardly revelatory, but nonetheless I thought it was interesting that the NFL remains involved. No doubt, the NFL is keen to ensure the facilities for American football — the retractable pitch, the locker rooms and media facilities — are installed to specification.

This is a “first of its kind” project in the UK, meaning a lack of local expertise, so it is understandable the NFL is keeping a close eye that, for example, the artificial turf is the correct sort.

Thanks for reading. I welcome any comments, and please give me a follow on Twitter for more Spurs and stadium chat. The video is by Asil Purcell, proprietor of Visualhorizon3D. You can see more of his work here: 

West Ham’s stadium deal: Brady’s hollow veto threat, naming rights information, local ticketing and more

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After a long campaign, the deal between West Ham and the London Legacy Development Corporation (LLDC) for the Olympic Stadium has finally been published.

The agreement, and the expensive attempt to keep it secret, has sparked considerable debate over how much value for money has been gained for the British taxpayer.

The BBC report covers the agreement, and controversy, in great detail. What I want to do is talk about some of the provisions that specifically relate to Spurs and our own stadium project.

West Ham do not have a veto

In 2014, West Ham vice-chairman Karren Brady poured cold water on the possibility of a ground share with Tottenham while we rebuild White Hart Lane.

“No-one has asked us for our permission (to ground-share) and if they did we would probably say no, depending on who it is – if you get my drift,” she said.

“We are the anchor tenant for the winter matches and nothing else can happen in that time without our permission. Our football matches take priority over everything else.”

When an LLDC official earlier this year said that a ground share could happen, West Ham doubled down on the position:

“As anchor tenant we have primacy of use during the football season and our contract gives us overriding priority to use the stadium, ensuring our fixtures and events are ring-fenced and will always take priority over all other events. It would therefore be impossible to accommodate the fixtures of another Premier League club without West Ham agreeing, a position which was fully supported at today’s hearing.”

The publication of the full agreement shows that Brady and West Ham are, shall we say, mistaken.

At no point in the agreement does it specify that West Ham have a veto over another football club leasing the stadium, and the grounds on which they may object to such an agreement are limited.

The key section is as follows:

(The LLDC) will not grant a concession, lease or licence to any Other Concessionaires to use the Stadium as its home ground for the playing of Football on the Pitch during the Football Season if:

(i) the Grantor, acting reasonably, believes the quality and condition of the Pitch may
be materially impacted; and

(ii) use by the Other Concessionaires would conflict with the Overriding Priority
Principle or any Governing Body Requirement,

The “Overriding Priority Principle” is what it suggests: West Ham get priority in using the stadium (outside of a one-off window for the World Athletics Championships in 2017). However, there is a big difference between priority use, and exclusive use.

The clause concerning the state of the pitch may prevent the LLDC from leasing the stadium to a rugby team, true. But, given how many stadiums around the world are happily shared, not another football team.

If Spurs were to take it, West Ham would have “first dibs” in terms of when matches were played — that is unquestionable. But given that fixtures are decided by the Premier League, the FA and UEFA, it would be up to the governing bodies to decide when the games were played.

West Ham’s concerns about accommodating another set of fixtures are immaterial if the governing bodies are able to agree on a scheduling arrangement. Given that the FA are reportedly happy for Spurs and Chelsea to share Wembley, there appear to be no concerns on that front.

There would be questions over logistics — ticket booths, hospitality and the like. But it is a multi-purpose stadium, and West Ham are just tenants.

In the 203-page document, I can see no further provisions preventing the LLDC from offering the stadium to another team. In fact, the agreement requires West Ham to “take into account the requirements of any other concessionaires to the extent reasonably practicable”.

I would welcome any further insight in case I have missed something. (Which I did — see the update below)

Spurs would now appear to have three clear choices for our temporary home — Wembley, Stadium MK and the Olympic Stadium. None are perfect — we are investing hundreds of millions in somewhere that is.

A poor deal for local residents?

In the S106 agreement with Haringey Council, it was agreed that Spurs would provide 10,000 tickets for residents of Haringey and Enfield (5,000 season tickets and 5,000 matchday tickets) in the new stadium, per league match.

With 19 home matches, that means 190,000 tickets for local residents per year.

In West Ham’s agreement with the LLDC, the club is required to offer up to 100,000 tickets for residents of Newham, and none for other boroughs. There is no specific language on season tickets or pricing limitations.

Residents of East London have been given a poor deal compared to those in North London.

West Ham revenue streams cut

The one area where the LLDC appear to have struck a fairly good deal is over naming rights. Under the deal, West Ham must hand over the first £4 million of a deal, and then split the rest 50-50 each year.

To me, this seems fair. Of course, while taxpayer money built the stadium (twice), a Premier League club will be able to attract far more in sponsorship than an athletics venue ever would.

For West Ham, the amount lost in naming rights income will surely exceed the annual rent of £2.5 million.

For catering, the LLDC keeps 70 percent, as well as the first £500,000. Again, this may mean some lost income for West Ham compared to teams that own their stadiums (who may outsource catering contracts anyway).

Overall, this is still an incredible deal for West Ham. Compared to what Spurs will have to be paying in annual finance costs, they are way ahead. But there are some downsides — beyond the fact that the stadium looks a poor venue for football — to not being the outright owner.

One strange little detail

West Ham agreed to pay £15 million towards the reconstruction costs of the stadium, a sum widely agreed to be derisory.

However, there is a curious reference to this payment in the agreement. Instead of the club (either the umbrella company WH Holdings or West Ham United Limited), David Gold and David Sullivan agreed to provide personal guarantees for this money.

Mr David Gold and Mr David Sullivan providing personal guarantees for the
Concessionaire’s obligation to pay the One-Off Usage Fee or the obligation to pay the One Off Usage Fee in accordance with Clause 20.4 (Usage Fee for Use of the Stadium and Other Payments) has been irrevocably discharged;

I’d welcome any explanation for this — it certainly seems quite unusual, no?

A final thought

Having read this document in full, as well as much of the reaction to it, I think it is important to make one thing clear: West Ham haven’t done anything wrong.

If the deal represents poor value for the taxpayer, that is the fault of the LLDC. Karren Brady’s job was to negotiate the best possible deal for the company she runs. It is fair to say, she has done that. I can hardly blame her for trying to throw Spurs off the scent in terms of ground sharing, given the history between the clubs.

Could the LLDC have struck a better deal? Possibly. That £15 million contribution from West Ham towards refit costs, in particular, seems deeply unambitious in light of what Arsenal, Spurs and Chelsea have spent, or are planning to spend, on their stadium projects.

But this stadium was a white elephant waiting to happen — a vast arena, built for a sport most people only care about for a week every four years, in a city already full of them. The 2012 Olympics was great fun, but also a mind-blowing waste of money. Gradually, cities such as Boston are wising up to the IOC scam and telling them to get stuffed. Sadly, the egos of our politicians were sufficiently stroked, and we will be paying the bill for a long time to come.

We shouldn’t forget Spurs also wanted the stadium — or rather, we wanted the site. We would have knocked down the existing stadium to build a dedicated football facility (in conjunction with our new NFL friends, no doubt). I’m sure Daniel Levy would have been just as aggressive in his negotiations with the LLDC as Brady was. Under the Spurs plan, the taxpayer would surely be no better off.

A few Spurs fans, myself included, had fun tweeting to the European Commission about potential illegal state aid. This is certainly something that warrants further investigation — undeniably, West Ham have received a huge leg up from the public purse here. This is a list of competition cases in the sports sector — there are a fair few.

I’d be surprised if the challenge came from rival clubs though. I daresay the likes of Spurs and Chelsea, who are yet to finalise funding for their own stadium projects, are cautious about this in case they need to seek any form of public funding if money runs short. Much better just to build a better stadium, and beat West Ham on the pitch.

If I was a West Ham fan, I would be excited about the future of my club and no doubt pleased with the work done by Brady. I’m sure, I’d also be enjoying the angst it is sparking among rival fans.

But I’d also be apprehensive about the quality of the stadium and the matchday experience. Upton Park may be small, but it is a fine and atmospheric football ground, and bigger isn’t always better.

Thanks for reading. Please follow me on Twitter for more Spurs chat. If you’ve spotted anything of interest, or think I have misinterpreted something, please do get in touch.

 

Update (16/04/2016): As was pointed out on Reddit, there is one other clause of importance that I missed first time around.

Clause 20.5 states that, if another “concessionaire” uses the stadium for football, West Ham get 50 percent of their £2.5mln annual rent back, plus 50 percent of the £15mln one-off fee if it is within the first 10 years of the agreement (it drops to 25 percent in the following ten years).

So, if Spurs were to want the Olympic Stadium in 2017/18, it isn’t as simple as just matching West Ham’s rent. To make LLDC “whole”, Spurs would have to cover the £7.5 mln lost in one-off payment, and £1.25mln lost in rent. So, in total, £8.75 mln. After that, it becomes about paying enough that it makes it worth LLDC’s while. Note, it would hard for LLDC to turn down anything that offers the taxpayer more money back after such a huge cost.

For Wembley, the rent is likely to be in the region of £20mln per year, and Spurs would have to have it at a limited capacity, for most matches, of 50,000. Let’s say Spurs offered the same as West Ham in basic payment for the Olympic Stadium — £100,000 per day for 25 event days, and covered the LLDC’s lost one-off fee in full: that would be £10 million for a year. With a capacity of 60,000, and half the rent, this may be a better deal financially for Spurs.

Of course, it may be that there are more premium seats, corporate facilities and other revenue-generating goodies at Wembley than the Olympic Stadium. That, coupled with the ball-ache of having to work with West Ham and deal with all the logistical hurdles Brady has thrown up in the agreement, no doubt means Wembley remains the preferred and more likely option. But my broader point stands: West Ham don’t have a legal veto, and Spurs do have another option — at least something the club can use in its negotiations.