Olympic Stadium funding – Progress update

CAS Trust's Richard Hunt provides an update on recent developments on behalf of The Olympic Stadium Coalition (a coalition of fourteen supporters trusts who are campaigning for transparency and fairness in the funding of The Olympic Stadium, now known as The London Stadium).

It took us completely by surprise.

The Olympic Stadium Coalition had been a bit uncertain for a few weeks. The battle to get the contract revealed in full had been a clear goal which kept us all focussed but, once we had it, there was no headline- grabbing new revelation with which to excite the press. That in turn made it more difficult to get a politician to take up the case on our behalf.

And then out of the blue on the evening of 1st November we got a mail from Fulham Trust’s Dan Crawford who is also a Labour Councillor in Ealing. The new Mayor of London had ordered an inquiry into the Stadium’s finances!

It had been a key objective of the Coalition to get such an enquiry. The initial 26,000 strong petition had asked for a “full public inquiry” but such a title implies an extremely long and expensive process. A London Mayoral inquiry was in truth about as good as we could get, provided that it asked the right questions. And having called the inquiry, why would Sadiq Khan not want to make a thorough job of it, with some pretty punchy conclusions?

This probably went through the mind of the chairman of the LLDC, David Edmonds, who resigned less than 48 hours after the Mayor’s announcement. He was quickly followed by the news (previously hidden from the public) that the LLDC Safety Officer, Chris Baker, had resigned in May. He had become concerned about the retractable seating system and its impact on the structure of the ground’s lower tier. At the same time the news emerged that the actual cost of removing and putting back these seats (by hand) had risen by 27 times. The company which had won the contract for this work, and quoted £300,000, had gone bust. The new bill was now stated to be £8m. Every year!

In addition the news had emerged that the stadium naming rights deal with Mahindra had collapsed after the company failed to meet the asking price, which the Coalition believes to be £5.2m (of which 20% would go to West Ham).

It looked like the perfect storm and it put the wind back in the sails of the Coalition. Reinforced by authoritative inside information, we were able to model the so –called profit plan of E20 (the stadium owner - in turn owned by the LLDC and Newham Council) and show that, without a naming rights deal and with the ridiculous cost of the retractable seats, E20 will make an operating loss of between £6m-9m per year.

This is hugely significant because the LLDC justified the “football option and contract” to the European Commission on the grounds that a smaller athletics stadium would need £2m per annum subsidy from the taxpayer. However they claimed that the football option would make a profit each year - thus paying back the cost of re-configuring the stadium (which at the time was said to be £150m. It is now £321m). What could possibly go wrong?

None of that matters to West Ham, it would seem. If they are relegated, their rent halves (thus taking the taxpayer bill to potentially over £10m p.a.) . But they may yet face an even bigger bill. We learnt from fellow campaigner Steve Lawrence (an architect who worked on the original Olympic park plans) that the law firm Mishcon de Reya have filed a formal State Aid complaint in Brussels. Steve believes that the EC would have the power to impose its own idea of a “fair rent” on West Ham, and this could be as high as £30m per annum.

The way all these things came together out of the blue did rather feel to us like the fall of the Berlin Wall - which of course also happened early one November. Now, we simply need to make sure that the Mayor’s enquiry has all the facts we have pieced together in the last three years. We took a big step forward on that thanks to a meeting with Caroline Pidgeon ( the Lib.Dem. GLA leader and consistent inquisitor of the deal) who undertook to ensure the Mayor’s team considers our nine page dossier focusing on the operational losses arising from the current contract. These are losses which will need to be funded by all of us - taxpayers and fans of all the other clubs. Will Brady and Gullivan realise that the writing is on the wall and agree to cough up a more fair share? Their public pronouncements remain as belligerent as ever, so it seems unlikely. But who, at the beginning of 1989, predicted that by the end of that year, the Berlin Wall would be gone?

We also understand that a new BBC documentary on the stadium will be aired on the Inside Out slot in mid January. We will keep you informed of details once they are confirmed.