West Ham's Olympic Stadium Move Is the Premier League Deal of the Century
West Ham United will relocate to the London Olympic Stadium for the 2016-17 season, moving into a renovated 54,000-capacity, state-of-the-art facility at an initial outlay of just £15 million, according to the BBC.
It's a potentially seismic shift in the right direction for the Hammers, and it comes at absurdly good value. If you need a reference point, Liverpool paid twice that amount to sign Andy Carroll. Chelsea more than tripled it to get Fernando Torres.
West Ham have landed the Premier League deal of the century. The likelihood of attracting a new investor to the club has surely skyrocketed as a direct result of the announcement, and their fans—though sad to leave their spiritual home at Upton Park—will soon come around to the idea.
The Hammers' Premier League contemporaries may not be so easy to appease. Many will echo the sentiment of former sports minister Richard Caborn, per The Guardian:
I do welcome the fact that the future of the stadium has finally been secured, but we should also realise that the public sector is picking up the tab.
Caborn's point is a fair one. Leaving an Olympic legacy in East London has always been a priority, but why should West Ham—a private company—reap huge benefits from a project funded largely by the public?
Fans of other Premier League clubs may justifiably feel a sense of injustice. The question becomes one of how fair it is to give West Ham such a massive boost to their business operation, when other clubs would have to spend hundreds of millions to achieve the same gains.
Liverpool and Everton have needed new homes for at least a decade; Chelsea are actively seeking out land to build on; some claim Tottenham's growth into a major European force may be dependent on developing a stadium.
Grounds like Anfield, Goodison Park, Stamford Bridge and White Hart Lane retain their romantic sense of history, but in their limited capacities and out-dated infrastructure, they are shackling the revenue potential of clubs who play inside them.
Re Olympic stadium: David Gold & David Sullivan must be laughing themselves silly. As Richard Caborn says, a £600m stadium for £15m. #whufc— Richard Williams (@rwilliams1947) March 22, 2013
Arsenal, in their shiny new North London home at the Emirates, earned £93.1 million from matchday revenue in 2012. Chelsea, despite playing more Champions League matches at home, made £67.5 million. Liverpool brought in just £40.9 million, Spurs £43.3 million (figures per Deloitte).
Having more seats and better corporate facilities is a straightforward path to making more money from your operation. Liverpool owner John Henry accepts it is in the club's long-term interests to relocate from Anfield, but if it were a straightforward business decision, he'd already have done it (h/t Daily Mail).
The fact he hasn't comes down to debt implications. Without a staggeringly wealthy benefactor to fund it on a whim, Liverpool would have to take out a big loan and be left paying off their borrowing for years to come.
This is what Arsenal are doing right now, having invested £390 million in the Emirates. This is the model they have chosen to secure their competitiveness for decades to come. But it has unquestionably restricted their competitiveness in the short term. Said their manager Arsene Wenger, in February 2012, per the club's official website:
We want to pay the debt we owe from the stadium we built, that's around £15 million [per year]. So it's normal that at the start, we have to make at least £15 million or we lose money.
Clubs like Liverpool, Everton, Chelsea and Tottenham find themselves wrestling with a big decision. Should they move house and invest for the long term, or renovate their existing homes for short-term gain at far lesser expense?
Manchester United chose the latter. Old Trafford was built in 1910, but United have made dramatic upgrades to a 76,000-capacity stadium that allows the club to compete in revenue terms with the biggest in the world. United made £108.6 million from matchday revenue in 2012 (Deloitte).
Great to see that it's all official now and we will be moving to the Olympic Stadium.Exciting times ahead#COYI— Matt Jarvis(@MrMattJarvis) March 22, 2013
West Ham will spend considerably less than Manchester United have on refurbishments and benefit from from a bespoke sporting venue designed for the 21st century.
They're not the first club to win what The Telegraph called "the stadium lottery." Manchester City inherited the 2002 Commonwealth Games stadium—now the Etihad—at a cost of just £20 million. "The City of Manchester Stadium was paid for by tax payers and lottery revenue," wrote Steve Wilson in 2011.
City got lucky; West Ham perhaps even more so. Said co-chairmen David Gold and David Sullivan in an official statement:
It's fantastic for everyone at West Ham United that at last all the Club's hard work over the past three years has paid off. Since we came to West Ham in 2010 we have had a vision to really take the club forward so West Ham United can compete on the pitch at the highest level.
If West Ham do go places on the back of their Olympic Stadium, they won't just be thanking their fans and players for their success. They'll be thanking the government and the taxpayers who paid it possible.
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