As the clock moved within minutes of the transfer window closing, the Hammers had moved to the forefront of the race to sign Spurs forward Emmanuel Adebayor on loan, only for the move to be unilaterally vetoed by Spurs chairman Daniel Levy.
“There were five good clubs who were interested, and I narrowed that down to three and then one that I wanted to go,” Adebayor told Sky Sports the next day. “But Mr Levy was against that because it was a rival club [West Ham]. So I am staying here.”
As that deal collapsed, so did a number of others that were contingent on Adebayor’s arrival at Upton Park (Carlton Cole, the man making way for Adebayor, was called back from West Bromwich Albion with almost all aspects of his transfer sorted).
Levy's decision had a trickle-down effect on the entire deadline day, one of the quietest for many seasons.
"At the last moment the main deal collapsed and the rest folded like a pack of cards,” West Ham co-owner David Gold bemoaned on Twitter (via Darren Lewis of the Daily Mirror). He added, “No matter how hard you tried there are people out there that you just can't do business with.”
Levy’s intervention was portrayed as a hard-nosed business decision—at the time, West Ham remained realistic rivals for Champions League qualification, so handing them an experienced striking option would have perhaps been ill-advised—but Gold’s own comments suggested an underlying animosity between the hierarchies of both London clubs, an enmity Gold clearly felt contributed to Levy's decision.
Perhaps that should be no surprise. This season, West Ham have emerged as closer rivals to Spurs on the pitch, but off the pitch, they have been fighting, and winning, battles against the north Londoners for almost a decade.
The central war, over the future of the Olympic Stadium, was won by West Ham—a controversial victory that could yet define the fortunes of both clubs over the next decade or more.
As the two clubs prepare to face off in the Premier League on Sunday, with Spurs still firmly in the Champions League hunt, we are perhaps only slowly waking up to the opportunity that awaits West Ham in the years ahead.
West Ham United revel in their lore. The Hammers have grown to adopt “The Academy of Football” as a semi-official slogan, one that adorns different areas of Upton Park and the club’s training ground.
It is a phrase full of significance, one first ascribed to the east London club by newspapers back in the 1960s, when the likes of club legends Bobby Moore, Geoff Hurst and Martin Peters formed the backbone of the England team that would go on to win the 1966 World Cup.
Yet, even in that era, when Moore was good enough to tackle Pele, the club never once finished higher than sixth in the top flight, a pattern that has frequently repeated itself in the years since.
In and out of the Premier League in recent times, West Ham have remained very much in the second tier of London clubs, unable to keep up with neighbours, who have gotten used to regular European football and the power and resources that come with it.
Since then, the academy of football has become the basis of some taunting from rival fans, with the talent pool perhaps drying up somewhat since the emergence of the likes of Joe Cole, Michael Carrick and Rio Ferdinand.
“This train, like many promising young football careers, terminates at West Ham,” as one, possibly apocryphal, story about a recent London Underground announcement goes.
Perhaps, however, the tide is starting to turn. The club entered 2015 sixth in the Premier League table with realistic (albeit distant) hopes of qualifying for the Champions League.
It is 13 years since the club last finished higher than eighth in the top flight (seventh in 2001/02), and they have never directly qualified for a European competition via the league (in 1999, after finishing fifth, the Hammers were one of the winners of the Intertoto Cup, meaning they progressed into the UEFA Cup).
That could all change this season, however, if Sam Allardyce and his squad can sustain their form.
Co-owner David Sullivan—who, along with partner Gold, has helped rebuild the club after an ill-fated stint under Icelandic ownership—certainly thinks so, revealing earlier this month that he was targeting a Premier League title and even Champions League success “within the next five years.”
“Yes, I know it’s unlikely, but again, it's not impossible—look at Atletico Madrid [who won La Liga and finished runners-up in the Champions League last season],” Sullivan told the London Evening Standard. “We can all dream.”
Clearly, then, West Ham are a club on the up. But while this season and the next could see the club break new ground, it is the 2016/17 campaign when they could really move to the next level, as they finally move into the Olympic Stadium.
Suddenly, the club will be the sole football occupiers of a 54,000-capacity stadium, something that, in terms of ground size, would catapult them into the same tier as Arsenal, Newcastle United and Manchester City. The club themselves describe it as “a once-in-a-lifetime opportunity,” while the Guardian was moved to describe it as “one of the most advantageous deals ever struck in the history of football.”
One criticism of the modern game is that “social mobility” is practically non-existent; without the benefit of a billionaire backer, clubs outside the traditional elite find it virtually impossible to break into it. The introduction of financial fair play was meant to change that, but there is a very real argument that it has only succeeded in further sustaining the status quo (now, even a billionaire backer cannot help you climb the ladder with the ease others have enjoyed in the past).
A new stadium, however, can change a club’s entire economic and sporting outlook in a stroke. West Ham have been presented with one on a plate—and it could be their key to becoming a domestic and European force to be seriously reckoned with.
Certainly, it appears to be a game changer—which is perhaps why Spurs wanted it for themselves.
Judged purely on certain statistics, there is no Premier League club that needs a new stadium more than West Ham. This season, at the time of writing the club has an average home attendance of 34,845 (per soccerstats.com), which works out at an impressive 99.5 per cent of Upton Park’s maximum capacity of 35,016.
That is as good as Manchester United—who have so far sold out 99.5 per cent of (the admittedly far larger) Old Trafford—and better any of Chelsea, Liverpool and Everton, all of whom are currently exploring different ways of expanding their current grounds to bring in greater matchday audiences.
Tottenham are another club looking to move into a new ground—a modern arena that better chimes with their ongoing aspirations. On paper, they are currently a bigger club than West Ham, with more realistic European and domestic aspirations, but based purely on the statistics, their need for a bigger space is marginally less than their rivals. Spurs currently hold an average attendance of 35,823, 98.9 per cent of White Hart Lane’s 36,240 capacity.
In theory, both clubs are looking to emulate the success enjoyed by another London club, Arsenal, who seem to be thriving since making the move from their traditional home, Highbury (capacity: 38,419), to the Emirates Stadium (capacity: 60,272) almost 10 years ago.
Ignoring the growing pains involved with the move (more of which later), it has clearly been a resounding economic success for the Gunners, aided by manager Arsene Wenger’s consistent ability to guide the club to Champions League qualification during the transitional phase.
In the last published financial results, following the 2012/13 season, Arsenal returned matchday revenues of £93 million, nearly double those of West Ham and Spurs combined (which totaled £51 million). Additional Champions League home games contribute to that inflated figure, but in the main, it is the greater number of tickets, both personal and corporate, that can be sold—and at higher prices—at the Emirates that contributes to the difference.
West Ham and Spurs both want a piece of that pie (London, of course, being an affluent city where demand for tickets is more inelastic than most places), which is why they have already made arrangements to get it. West Ham have been handed their golden ticket, however, while Spurs face an arduous and expensive journey to reach the same point.
If Arsenal are the blueprint, then they are also a warning shot. The club may be free of their debts now, but for over a decade, the Emirates Stadium was a huge financial responsibility that drastically curbed their ability to spend large sums on improving the playing squad.
“It is massively difficult,” Arsene Wenger said to the Daily Express last year. “If you look at the history of all the English clubs who have built a new stadium, and look at where they have finished, I knew always that would be the most sensitive period in the history of the club.”
Some of the “sensitivity” was of Arsenal’s own making, however. Rather than simply selling the old Highbury site to a developer and letting them take on the burden of converting the plot to flats, Arsenal opted to take on the burden themselves. That required the club to take out bank loans of around £133 million to raze the ground and build 655 flats, an additional liability on top of what it was already costing them to buy the new site and build the stadium.
This was a calculated risk on the club’s part. While the risks were perhaps higher than they needed to be, by building and owning the flats, the club stood to make a greater profit in the long run than they would have done by simply selling the land. While exact figures are hard to come by, it seems safe to assume the club made around £80 million in profit on the Highbury development, whereas the land itself would only have commanded around a quarter of that (albeit many years sooner).
West Ham have taken the more risk-averse option, selling the Upton Park site to the development company that also assisted Arsenal in redeveloping areas around the Emirates, Galliard Group.
Located slightly further away from central London than Highbury, the Boleyn Ground plot was nevertheless estimated to be worth around £20 million by observers, although the club insist that they did not accept the biggest deal on the table—preferring instead to go with one that offered a greater commitment to regenerating the surrounding area, the club’s traditional supporter base.
“There were better offers on the table from more aggressive developers,” the club said in a statement, “but these were rejected as the club wanted to leave the right legacy for fans and the local community.”
The sale made sense for West Ham for far less sentimental reasons, of course. If we estimate the fee commanded for the site being just shy of £20 million, then that immediately offsets the £15 million the club have been told to contribute to the Olympic Stadium redevelopment costs (it needs to be made football-ready between now and next summer).
That is all West Ham are being asked to contribute, however, to a stadium that has now cost taxpayers at least £619 million (they also have to pay £2.5 million a year in rent). With their 99-year lease and moderate rental charges—which will be more than covered by an increase in matchday revenue—the Hammers have effectively gone from a 35,000-seater stadium to a more modern, adaptable 54,000-seater at no cost to themselves.
“This is state sponsorship beyond my wildest dreams,” then-Leyton Orient owner Barry Hearn said in 2013, per the Guardian. Orient are the nearest club geographically to the Olympic Stadium but lost out to West Ham in their bid to move in. “In effect, it’s rent free, as they have the ability to develop Upton Park.”
Hearn added: “We have ended up in situation where we have gifted £500 million of taxpayers’ money to a Premier League club that has a turnover of more than £100 million. It’s a wonderful gift, but if I was an Arsenal fan, I would wonder why we bothered paying to build a new stadium.”
Spurs, of course, were also strongly interested in moving into the Olympic Stadium, even if it meant moving away from their traditional borough. But they lost out to the Hammers (in a bidding process that remains highly contentious) and, after that setback, are now planning on staying as close to their current ground as possible.
They plan to move slightly away from the White Hart Lane site but will still have to knock down the old ground to complete a new one they hope to move into at the start of the 2018/19 season, making the new ground part of a larger redevelopment: the Northumberland Development Project.
A new Sainsbury’s superstore has been built on the site, with the entire development expected to cost around £400 million—although Spurs are pushing hard to receive initial payments from the local council and other development funds to get the first phase off the ground.
The stadium was initially expected to have a capacity of 55,000, although recent reports have suggested they now want to pump it up to 61,000—1,000 more than Arsenal's stadium (a symbolic, albeit perhaps infantile, gesture).
Beyond that, however, the transition is fraught with difficulties. White Hart Lane will be knocked down before the new ground is able to be finished (something that, as this week's High Court case with a local business shows, comes with its own complications), meaning Spurs will have to play home games at an external site for at least one season.
Stadium MK, home of the MK Dons, has already been mooted—the Olympic Stadium would be a perfect alternative had West Ham not already locked it up (and gained power to veto any other football tenant).
None of those options are ideal. With Stadium MK housing several thousand fewer seats than White Hart Lane, Spurs would also take a hefty hit in matchday income during their exile. A new ground might pay dividends in the long run, but in the short term, it will place immense stresses on the bank balance.
Arsenal showed that to be the case in the years following their move, and almost 10 years on, the figures involved are all the more draconian. Spurs have hugely wealthy owners behind them but will still have to cut costs to comply with FFP regulations.
“We built our stadium at a price that you couldn’t afford anymore,” Wenger added last year to The Telegraph. “We managed to build our stadium by subsidising it with our own resources. That is much more difficult today.”
But not acting can be nearly as disastrous. The Frenchman noted:
You cannot be in a business where you turn down 15,000 or 20,000 people every week. If your competitors have more financial power than you, at some stage you have to make a decision.
It looks like everybody makes this decision now, because when you look at Liverpool, Everton, Tottenham they want to increase their capacity.
And then West Ham, a club outside Britain’s traditional power base, secure such a site, increasing their financial power and forcing others to try to respond: “West Ham go to a bigger stadium [too], so if you stay in a smaller capacity, it’s even more difficult.”
Whether that has hardened Spurs’ resolve to push forward despite the obstacles is difficult to ascertain, but what is clear is the obstacles are not insignificant. Spurs’ owner, billionaire Joe Lewis, is widely characterised as one of the richest men in the world, and someone who, while preferring to delegate most day-to-day club responsibilities to Levy, is not unwilling to ensure the club have the funding they need.
Building a new stadium, however, is on a different level to signing a top player—as the club’s recent moves indicate. News that the club had appointed financial adviser Rothschild was taken as an indication that Lewis was about to sell up, with the club forced to clarify that it was instead to find ways of financing the new stadium.
A club statement said:
The stadium redevelopment plans are a significant part of the future for both our club and the local area and represent a complex infrastructure project that requires funding. This substantial construction project requires discussions with multiple providers of finance so that the optimum financing package can be achieved. To this end, we have appointed Rothschild to advise us on those options.
Contrary to recent press speculation, neither the club, nor its majority shareholder, are in any takeover discussions and the focus of the club is fully on delivering the new stadium project.
Nevertheless, the hot speculation remains that Lewis will sell the club once the new stadium is built. A new, state-of-the-art, large-capacity stadium will significantly increase the value of the club, with many expecting Lewis to choose that moment to cash in on his investment and collect a sizable profit.
Clearly, there is a belief that West Ham’s owners will do the same once the Hammers make their own move—indeed, co-owners Sullivan and Gold reached an agreement with Mayor of London Boris Johnson that any profits they make from selling all or part of their interest in the club in the 10 years after their move will be split with the city, another indication of the brilliant business deal all parties knew the club were getting.
When the pair bought their 50 per cent stake in the club in 2010, it valued the club at £105 million (both men have since upped their interest and now control over 80 per cent between them). That valuation has not changed significantly in the years since, whereas Arsenal were most recently valued at £890 million by Forbes magazine.
Such figures are not based on sentiment. If West Ham start qualifying for the Champions League on a consistent basis, the club could significantly close that gap very quickly. Even if they don’t, as an asset, the Olympic Stadium and its 99-year lease would only boost the value of the club considerably.
That is because of the money-making potential of the move. Again, it is very difficult to work out exactly how much West Ham stand to gain from the stadium switch, but we can make some estimates with reasonable conviction.
The club made £19.5 million in matchday revenue in the last revealed accounts, so that should, at the very least, increase in line with the larger capacity of the Olympic Stadium, which is 54 per cent bigger than Upton Park.
A 54 per cent increase in matchday revenues would be £30.1 million—but even that is perhaps not entirely accurate, considering the club could (and probably will) charge more at the new arena and be able to sell a greater percentage of corporate packages at a variety of (again increased) prices.
A figure nearer £35 million would not seem outlandish, while the addition of European football could quickly add another £5 million to that. Of course, that requires selling out the stadium on a regular basis, something not all observers are convinced the club can do without offering heavy discounts in certain sections.
Commercial income is also likely to increase, with the club expected to sell naming rights to the new stadium—which, if paired with shirt sponsorship, should net an extra few million a year—as well as attract more partners keen to be involved with the club as it makes such a big move.
Last season, the club made just under £14 million in commercial revenue, whereas the capital’s big three clubs (Arsenal, Chelsea and Spurs) made an average of £61.7 million. Vice-chairman Karren Brady and her team will certainly be targeting a push toward at least £30 million once they have their new home.
“The Olympic Stadium offers enormous commercial and brand opportunities,” Brady said when the club announced their latest financial results. “We have a strategy to deliver sell-out crowds and enter that stadium with a team that are benefiting of such an amazing iconic venue.”
|West Ham's financial outlook from 2016|
|At Olympic Stadium||£35m||£20m||£5m||£60m|
|West Ham / B/R estimates|
Of course, those figures will depend in part on matters on the pitch; the better West Ham do, the more money can be made on the back of that success. But it is important to note the club are in rude health now—they made a profit of more than £10 million in the last financial results for the 2013-14 season despite a net transfer spend of £20 million and some dire performances on the pitch, which saw the club fight relegation and even consider sacking manager Sam Allardyce.
“My board and I are satisfied with the achievements we have made in the 2013-14 season,” Sullivan said in his own statement about the latest financial results. “We continue to believe we will deliver both on and off the pitch by investing in the team, the brand and managing the business well.”
The large net transfer spend (it was an even bigger £30 million this summer) was achievable because of the vastly increased domestic television-rights deal, which netted the club around £20 million more per annum (a boost that is set to jump again by around £30 million in 2016 after the latest £5 billion deal was struck).
The Olympic Stadium move should almost match that boost, giving West Ham the financial muscle they need to challenge all but a handful of clubs in the world (most of them in England) in the transfer market.
Tottenham would perhaps be one of those clubs ahead of them, except they will have to pour vast sums each year into paying off loans and building costs on their own new stadium—a net difference between the two clubs that could approach nine figures for the time it takes to build the new ground.
That is the sort of difference that will eventually show on the pitch.
West Ham deny they have been the beneficiary of remarkable generosity (or preyed on government incompetence) in this matter.
"West Ham is not getting a free stadium,” Brady said in 2013. “The stadium was built for the Olympics and what are we going to do with it? Without anchor tenants the cost would be huge to the tax payer.”
Nevertheless, the advantageous nature of the deal cannot be disputed. Upgrading their stadium by 20,000 at virtually no cost, West Ham have negotiated a move that should almost instantly elevate their financial muscle toward the biggest in the league.
Sullivan and Gold may decide to sell immediately (even if they have to pay a tax), and the new owners would still walk in with everything in place to turn the club into one of the biggest in England.
With FFP as a leveller, West Ham will suddenly find they have much greater resources at their disposal as they look to challenge for the biggest prizes in the game—at the same time, many of their rivals at their current level will have to drastically reduce their own spending to finance a new stadium.
Many laughed at co-owner David Sullivan when he announced the Champions League was a target for the club, but it seems exactly the sort of goal the club should be setting themselves ahead of their move into their new home. How soon such an aim can be achieved depends in great part on whether Sam Allardyce, or indeed another manager, continues to oversee progress between now and 2016.
Tottenham’s case only serves to underline the good fortune, and good deal, West Ham have created for themselves. It will be an instructive case of compare and contrast over the next few years, as West Ham seamlessly slip into their new surroundings and Spurs count the ongoing cost of building theirs.
In the long term, the owners of both clubs might look to sell up and recoup a nice profit from their London football clubs with brand-new homes.
The path to that point, however, is going to be remarkably different—and it would seem it is West Ham, not Tottenham, who will be best placed to remain competitive, or at least get even more competitive on the pitch, in the meantime.
“We are West Ham United,” as Sullivan noted. “We’re a big club, one of four big clubs in London. We have some catching up to do—but we’ve closed the gap.”
Come 2016, that gap could well have disappeared entirely. The Champions League might be a dream right now—but it could soon be anything but an unrealistic one.