Olympic Stadium Coalition – campaign update: What we don’t know about the deal between the LLDC and West Ham United

The Olympic Stadium Coalition has assessed the most recent releases of the contract between the LLDC and West Ham United. This release is intended to clarify what exactly we now know about the agreement.

Although the LLDC was ordered to release in full the financial terms of the deal between itself and West Ham United for the hire of the Olympic Stadium on September 15th 2015, they are currently releasing information in dribs and drabs.

They have so far released three further versions of the agreement, all with continued substantial redactions.

Although the LLDC is clearly exercising a right to appeal against the decision of the Information Commissioner (ICO), we continue to contend that the LLDC is simply dragging its feet, and using procedural delays to attempt to ‘time out’ the campaign.

Representing as we do fourteen supporters’ organisations, thousands of members of the public, and with the support of MPs, London AMs and other civil society organisations, we will continue to make the same demands for transparency as we made when we set out on this campaign, because we believe that a fair deal for the taxpayer, is a fair deal for football. For more about the campaign, its aims and its supporters, please go to our FAQ section, or get in touch via our email address: olympicstadiumcoalition@gmail.com

This is what we don’t yet know:

How much the stadium costs to hire
The amount (the ‘Basic Usage Fee), that West Ham United will be paying to use the stadium. We also don’t know the amount by which this fee is reduced in the event of relegation

Why does it matter?
This matters because it is one of the principal ways that the taxpayer will get money back through this deal

How much the stadium maintenance will cost, and who will pay for it
What provision the LLDC has made to fund both ongoing repairs, and the upgrade of facilities which can be demanded by West Ham United, and whether there are any upper-limits on costs.

Why does it matter?
It matters because currently, we know that the taxpayer will be paying for changes required by West Ham United for the purposes of playing football, and not necessarily for the other uses of the stadium. Also who’s to say that after a period of years the stadium won’t need a major upgrade? All this will come at the taxpayers’ expense, whilst every other club has to meet their own costs.

How much each party will earn from stadium naming rights
We do not know what revenue West Ham derive from money paid into a separate ‘Naming Rights Account’, established under the agreement. This will be made up from revenue from the main Stadium sponsor, plus all other ‘lower level’ sponsorships.

Why does this matter?
This matters because it is another of principal ways that the taxpayer will get money back through this deal. It also matters because the potential is there, because it’s the Olympic Stadium and hosts other events during the year, for the naming rights to be greater. With most clubs this sort of information can be gleaned from an entry in their accounts, yet in the case of a publicly owned stadium we aren’t able to know.

What happens to the stadium in the event of financial difficulties at stadium company E20
What happens if E20 becomes insolvent? In such an event West Ham can terminate the agreement. It would appear that the way would be open for West Ham to acquire the Stadium from the Administrator.

Why does this matter?
This matters because at the moment, our reading of the deal says that if the stadium owner, E20, stops being able to trade and needs to be restructured, rescued or wound-up, West Ham United have the right to purchase the stadium – a public asset. Because the responsibility of the administrator during this process is to get the best value for those to whom the company owes money (creditors), the right decision might not be made about a public asset that the taxpayer paid for.

What happens if West Ham United is sold by its current owners
The benefit, if any, that E20 will receive if West Ham United is sold by its shareholders. At the moment all we know is that West Ham United simply have to inform E20 of any change, and confirm that the new owner agrees to take over the rental contract. We believe that this is one of the most important questions for the taxpayer.

Why does this matter?
This matters because part of the value of West Ham United is in the assets it owns – including the stadium it occupies. We think it wrong if the Olympic Stadium ends up being a way of the existing owners to make a tidy profit on the sale of the club in these circumstances, without having properly contributed to its building or upkeep, and without paying over some of that profit.

How much West Ham United earns from matchday catering
How much West Ham earn from matchday catering. It also doesn’t actually demonstrate that West Ham keep 100% of hospitality revenue, even though this exact information was confirmed in the LLDC’s private submission to the European Commission.

Why does this matter?
This matters because other clubs have to provide and manage their own catering outlets (or pay to outsource it), and in this case West Ham United will not have to do this – in a publicly owned stadium.

How many jobs are being ‘created’
TUPE refers to the protection of employees’ rights when the organisation or service they work for transfers to a new employer. As a result claims about job creation made by Karren Brady, which relate directly to the numbers of employees of West Ham United who will retain their jobs under TUPE, cannot be verified.

Why does this matter?
We believe there is no reason to withhold this information. If a publicly built and owned stadium is creating jobs, we should know how many jobs it’s creating.

How much office space is being provided to West Ham United and on what terms
How much retail and office space is given to West Ham. However a separate FOI request to the LLDC has yielded details of the amount of space allocated, and confirmed that the space is allocated on a 24x 365 basis.

Why does this matter?
The issue is the value of this space, and whether it is paid for as part of the usage fee, and if not whether the rental is at actual market rate, or some kind of peppercorn rate.