Super-power status beckons for Hammers with Olympic Stadium move
Like every other life-long West Ham United supporter, it has taken a while for this week’s big news to sink in. The club, for so long a Cinderella bouncing between divisions, is now on the verge of joining the Big Boys. A move to the £500m Olympic Stadium is game-changing for London’s perennial underdog.
The Deloitte Sports Business Group produces an annual review of data drawn from the 92 English football clubs’ financial statements. Reading this information reveals a football clubs is actually a simple businesses. It relies on four sources of revenue – broadcasting; sponsorships; match-day earnings; and for some like Manchester City, Chelsea and QPR, equity injections by ambitious owners.
From the 2013/14 season when UEFA’s Fair Financial Play rules start kicking in, subsidies from rich shareholders will be capped at e45m for two years and then dropping to e30m until 2017/18. The European Football body’s rules are not clear about what happens thereafter, but do state the intention is to lower these injections still further. Which means two things. The advantage enjoyed by clubs subsidised by the uber-rich is coming to an end. And as we move ahead, the benefit of higher match-day earnings will become increasingly relevant. For that, read stadium capacity.
Naturally, good or bad team management will still play a role. Poor managers will continue to empty stadiums. Brilliant ones will still be able to fill them using less resources. But in the long-term, despite what most fans would like to believe, even in football economic laws prevail: the more seats in the stadium, the stronger the income stream; the greater the ability to attract quality players; the better the team’s performance; and the higher the broadcast and commercial (sponsorship) earnings. It’s the ripple of a virtuous circle whose splash is determiend by your stadium’s capacity.
This is perhaps the key finding in Deloitte’s annual analysis, something the table below supports. Manchester United’s consistent reign in the upper echelon of the biggest football league in the world has a lot to do with its superb manager Sir Alex Ferguson. But even his genius couldn’t overcome the disadvantage of, say, managing a Wigan whose DW Stadium has only a third of Old Trafford’s capacity.
Football clubs have been slow to embrace this reality. Opting, rather, for the quick fix of inflated wages supported by owners with no need for a sustainable commercial matrix. Only two significant English clubs (Brighton and Blackpool) have announced stadium expansion plans since 2006 when as the result of a far-sighted Arsenal directorate, the Gunners relocated at great expense from its 93 year old Highbury home with its capacity of 38 400 to almost doubled seat numbers at nearby Ashburton Grove.
A move to the Olympic Stadium has the potential to transform West Ham into one of the top clubs in Europe. Best of all, it carried little capital cost. The Olympic stadium’s football crowd capacity is estimated at 60 000. This would give West Ham the joint second (with Arsenal) largest arena in the Premier League, with the potential to transform the Hammers from mid-sized battler to elite super club. Providing a sustainable advantage it could use to put daylight between itself and the competition including a traditional powerhouse like Liverpool, bitter London rivals Tottenham Hotspur and, in time, stadium-capacity strapped Chelsea. All of which is a fantasy without the Olympic move.
Current capacity of Premier League clubs’ stadiums
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Publicly, West Ham’s management team has played down the transformative potential of the move. Partly because London’s Mayor Boris Johnston wont sign any deal before he’s sure ratepayers participate in any upside should the club’s 65% shareholders, entrepreneurs David Gold and David Sullivan, on-sell the club at a profit. Also because the small print of a probable 99-year lease will only be finalised early next year. So, club vice chairman Karren Brady has been stressing no decision has yet been made and that the club will consult widely before doing so (see her letter below).
So lots more talk will flow under this particular bridge before the decision to move to the Olympic Stadoum is formalised. Emotions will be stirred by Boleyn Ground traditionalists. But sanity is sure to prevail. It’s the winning of football matches that speaks loudest for fans. Especially for die-hard, long suffering Irons supporters. There’s a perverse pride in always being the underdog. But it’s a place we humans happily trade to be connected to a consistent winner.
Here’s the letter which Vice Chairman Karren Brady sent to her mailing list yesterday this week:
Today I am proud that our great club has been awarded Highest-Ranked Bidder status to become anchor concessionaire at the Olympic Stadium, offering us an historic opportunity to return to West Ham and make this magnificent iconic Stadium our home for the next 100 years.
First and foremost I would like to wholeheartedly thank you, our loyal and passionate supporters, for your patience.
I thank those of you who have given your time to share your views and opinions. I assure you, despite the considerable constraints and confidentially agreements we were required to enter into, that your feedback has been instrumental in informing the Board’s approach to our bid.
It is important for all supporters to note that while today’s decision represents a huge step forward, as we have stated throughout, Preferred Bidder status does not mean that West Ham United have at this stage agreed to the move and it remains the case that we will only do so if the final proposal is right for the Club and our supporters. This includes the necessity of agreeing a Stadium design specification that is acceptable to us in terms of its ability to host world- class football matches.
Therefore we believe that this is the time for supporters to have their voices heard and a more intensive consultation process will commence immediately.
We have been given assurances that our full vision for a world- class Stadium in terms of supporter experience, sightlines and facilities will be realised and we cannot wait for you to be able to see this for yourselves. This Stadium will have sightlines better than Wembley. Our vision includes a state of the art solution to bring supporters closer to the action and a roof that can harness our world famous atmosphere.
We, like you, have been frustrated by the constraints upon us in terms of our ability to share our plans and can assure you that we will now share full details as soon as we are able to.
As part of this we stand by our commitment to conduct full supporter consultation regarding the move, including the polling of supporters. You can be confident that wherever there is an opportunity for West Ham to input in the decisions going forward, our supporters will be at the forefront.
We have already taken the first step towards this by calling an emergency meeting of our Supporter Advisory Board on Tuesday 11th December at 6pm to advise on the best methods to consult the wider support base going forward.
We truly believe that this move, together with the realisation of the many other key goals that we as a Board have set out to achieve from the outset, will play a huge part in helping us to realise our ambitious vision to move the Club to the next level.
Our absolute priority is to take you on this fantastic journey with us, to consult with you and ensure you are a part of it every step of the way. We are also hoping to make the club more accessible to those of you that have previously been unable to attend matches regularly due to barriers such as affordability and accessibility.
We have high ambitions for West Ham United and will seek your full input to ensure this iconic world-class Stadium becomes a true home for our club, our proud heritage and you, our deserving and loyal fans.
Karren Brady
Vice chairman
West Ham United FC
