Premier League football club West Ham finalises its move to the Olympic Stadium, but critics say the deal is commercially unviable, and that the public purse is having to “pick up the tab”.
On Friday a deal was secured which gives West Ham, currently 14th in the Premier League, a 99-year lease of the stadium once it has undergone a multi-million pound conversion.
West Ham will pay £15m of the £150m conversion costs, with the local council paying £40m. The government has agreed to set aside £25m of funds if it is needed for the work.
We are defying the gloomsters who predicted this landmark would become a dusty relic – Boris Johnson
The deal will see West Ham occupy the venue as the anchor tenant, though the stadium will still be used for other events (see box, bottom).
An original deal with West Ham collapsed in 2011 following legal challenges from London clubs Tottenham and Leyton Orient. The latest deal has been signed despite a fresh challenge by Leyton Orient.
West Ham will pay an annual rent of around £2m and it share revenue from any naming rights deal and match day catering.
The deal should be scrapped immediately and a commercially viable alternative explored as a matter of urgency. Andrew Boff
Club chairmen David Sullivan and David Gold said in a statement: “We understand the responsibilities that come with calling the nation’s iconic Olympic stadium, which will be converted into a world-class football stadium, our new home. It is an honor we will take on with pride.”
Mr Johnson said: “Through this deal with West Ham United FC, we are defying the gloomsters who predicted this landmark would become a dusty relic.”
The stadium in stats
Olympic capacity - 80,000
Post-conversion capacity - 54,000
Olympic stadium construction cost - forecast in March 2012 at £428m
Conversion cost - £150m+ made up of...
West Ham - £15m
Newham Council - £40m
Government available funds - £25m
Additional £80m - 18.75 per cent from private sources, 81.25 per cent from public money
However, critics have questioned the financial sense of the deal and have gone as far as calling for it to be scrapped.
Former sports minister Richard Caborn said: “West Ham are basically getting a stadium costing more than £600m for just £15m and a small amount in annual rent.
“I do welcome the fact that the future of the stadium has finally been secured, but we should also realize that the public sector is picking up the tab.”
And Andrew Boff, the Conservatives’ Olympic spokesman in the London Assembly, said: “The decision to give West Ham the Olympic stadium means Londoners and the nation’s taxpayers have been landed with a poor deal.
“It is a disgrace that another £25m from the public purse will now be used to prop up this agreement. I argued from the start that the commitment to retain the athletics track in the stadium would mean more public money being sucked into propping up this developing white elephant.
“The deal should be scrapped immediately and a commercially viable alternative explored as a matter of urgency.
“The mayor must confirm who will be responsible for paying for the costs of converting the stadium to be fit for football. Londoners will want to know how much they will have to cough up, given the vast amounts that the tax payer has already contributed.”
What's coming up at the stadium?
27-28 July: London Grand Prix - Olympic and Paralympic athletes mark one year since the start of London 2012
September 2015: Boris Johnson is hoping matches in the 2015 Rugby World Cup will be held at the Olympic Stadium
Summer 2016: West Ham move into the stadium
Summer 2017: World Athletics Championships to be held in July (Paralympians) and September
Under the deal, the London Legacy Development Corporation has promised that taxpayers will receive a share of the benefits of any increase in value of West Ham’s owners were to decide to sell out of the stadium within the next 10 years.
West Ham wants to add a new roof to the stadium, to keep fans dry during the winter, executive boxes and retractable seating to go over the running track.