Three years after West Ham clinched a deal to become anchor tenants of the £700m Olympic Stadium the details of their agreement with the London Legacy Development Commission (LLDC) have finally been published.
The 207-page contract was revealed in full for the first time yesterday after an information tribunal this week ruled against the LLDC, who wanted to keep it secret, and in favour of a fans’ coalition.
It covers what West Ham pay for, what they do not, what they could stand to earn from naming rights to the venue, and how much the club’s owners would have to pay the LLDC if they chose to sell up.
The Hammers will pay £2.5m per year – marginally above the average salary for a Premier League player, which is estimated to be £44,000 a week – for the duration of the 99-year agreement. The payment, which grants them use of the stadium for 25 days a year, is pegged to the retail price index. If the club were to be relegated from the top flight then the rent would fall to £1.25m per year.
West Ham are obliged to pay £100,000 for each additional competitive fixture they stage at the stadium above and beyond their stipulated 25 matchdays. They are also committed to paying the LLDC the following performance related bonuses: £100,000 for finishing in the top 10 or winning the FA Cup or Europa League; £250,000 for qualifying for the Champions League; and £1m for winning the Champions League.
The LLDC has led the search for a naming right partner for the stadium and will be entitled to the first £4m per year of any eventual deal. Any revenue after that would be split between the LLDC and West Ham. For example, in the event of a naming rights deal worth £6m per year, the club would receive £1m.
A complex one, but in short West Ham’s owners – David Sullivan holds 51.1 per cent and David Gold 35.1 per cent – would have to pay something back to the LLDC if they sell up in a deal that values the club at £125m or more. How much depends largely on the price paid and when the sale takes place, but it looks unlikely to run into an eight-figure sum.
It has cost the LLDC £272m to covert the Olympic Stadium from the facility that staged many of London 2012’s most iconic moments into a venue also capable of hosting top level football. Under their agreement, West Ham have contributed £15m to that bill.
The LLDC will pay for all heating, lighting, power and maintenance including the pitch and goalposts. The body is also responsible for policing and stewarding costs.
The LLDC receives the first £500,000 of profit on catering activity, and 70 per cent of anything on top. They also stand to benefit more than the club from stadium tours.
What West Ham said
“This publication does not affect West Ham United or our move to the former Olympic Stadium in any way. From our perspective, we welcome the publication of the concession agreement as it proves that, as we have always maintained, the Club has nothing to hide. Importantly, people can now see that the full revenue streams from which the Stadium's owners will benefit go well beyond the widely-reported payments we have committed to make to the transformation costs and our annual usage fee for using the Stadium 25 days a year.
What the LLDC said
“We are disappointed by the tribunal’s decision. Our motivation in bringing this case has been to protect millions of pounds of taxpayers’ money. The stadium needs to be a profitable and successful commercial operation otherwise it will rely on public subsidy. We were concerned that the publication of this contract and the precedent it may set for future agreements could make it harder to do this. However, we have decided not to seek leave to appeal, and have today made the contract available on our website.”
What the fans coalition said
“The hard work now begins to understand the deal, its costs to the taxpayer, and to football, and any further implications. This is a victory for the power of football supporters: organised, focused and willing to work together to achieve a collective goal.”