Tuesday, 11 October 2011

The Gaping Hole in the Olympic Stadium Argument

Ok, so let me get this straight. Stay with me because we will go through this in simple, easy to understand steps.

1. The Olympic Stadium deal has collapsed because of Newham Council's £40m loan to West Ham. That's right isn't it? OK with me so far?

2. Now, the Olympic Stadium is the key to turning West Ham into a major force in football. That's right isn't it? We can't grow at the Boleyn, but by moving to Stratford, we will transform the finances of the club because of the bigger capacity and the massive increase in our profile. That's the argument isn't it? Still with me?

3. Sullivan and Gold are sitting on personal fortunes of over £500m each. That's a matter of public record is it not? Still with me?

So, put those three facts together and what is the simple solution? Tell me, why don't Sullivan and Gold invest £40m of their own money to replace the loan from Newham Council?

I mean, according to our owners, the move to the OS is a no brainer. According to them, it is the key to West Ham becoming a giant in the game. So what could possibly go wrong? Why not dip into their own pockets and chip in the £40m that they were asking Newham Council to invest, on the same interest terms? I mean, if it worked for a local authority using tax payer's money in one of the most deprived boroughs in Britain, why doesn't it work for Sullivan and Gold with a combined wealth of one billion pounds?

Tricky one to answer that isn't it?

Perish the thought that Sullivan and Gold are simply looking to saddle the club with debt whilst selling off its only asset, the Boleyn, and pocketing the dosh.

As if!


Sean Whetstone said...

As usual you are missing many points in your argument.

1) West Ham would never own the stadium outright in the previous deal. We were to get a 125 year lease costing £5M per year.

Newham, West Ham and others would own the stadium meaning part public ownership.

2) Although in theory the two David have £500M of wealth between most of this is in assets such as Ann Summers, properties and bonds/shares. Very little of this is liquid cash so not so easy. This is common with many multi millionaires. I don't think you can expect them to sell off assets just to plug the gap in the stadium move at the drop of a hat. They have put their hands in their pockets many times including the beginning of this season. I am grateful for that.

3)There is a growing call for the Stadium to remain in full public ownership. The complaint made was about state subsidy in a commercial tender. The new plan is for Newham to own the stadium out right but to rent it out to West Ham at £2M per year.

This could save us £375M over 125 years assuming the rent stayed the same ;-). But it is still a £30M over a more modest 10 years.

The Olympic minister said today that the collapse would cost the tax payer £20M. This is the biggest crime! That the ego's and bad loser mentality of Levy and Hearn can cost us tax payers £20M when times are hard.

Shocking! Now hope Spurs don't get their hands on the £17M grant for the same silly reasons.

Maybe this will be a good thing. Man City don't own their ground and rent it from Manchester council.

Hammersfan said...

Sullivan and Gold don't need to sell assets Sean, they can take out a loan on their assets. Easily done. If Newham Council could offer the commercial loan, underwritten by the Prudential, then so can Sullivan and Gold if they want to.

NOBODY wants the stadium to remain in public ownership. It is potentially a white elephant. This is a huge cock up and oonly those with an ostrich mentality will refuse to accept that.

Tell me, if the deal in its original form worked for West Ham and Newham Council, why doesn't it work for Sullivan and Gold? The answer is obvious, but you lot will bury your heads in the sand with your arses up in the air!

Anonymous said...

John from Ripon here. As I understand it, the bid was accepted on the basis of joint funding between the Council and the club. The judicial review application was challenging the legality of that joint bid, as it was argued that a low interest loan was state aid.

The JR has to go back and look at the process leading up to the decision. If the High Court decided that the process was flawed, it would most likely have quoshed the decision. The decision making body would have to start the process over again, which is essentially what the minister has decided to do today.

Hammersfan said...

So why take the loan and put the deal at risk in the first place? Indeed why employ a member of the Legacy Committee as a consultant? Is it any wonder Gold comes from criminal stock?

John said...

Must admit the LB of Newham loan has puzzled me. It has always been a weak link in their approach for the OS. So why as you suggest did the D's not make sure of the deal and stump up the cash? Your reasoning falls down on one point. With a 200 year lease behind the club they could have got the valuable naming rights, made money out of the stadium for other events and obviously the lease would have added a lot of value to the club if they ever wanted to sell it, and plus the value of the Upton Park ground.
Now being unable to lease it, should they decide to rent the ground it would appear that far more than 30 million will be lost. So what is the real reason they borrowed rather than paid the 30 million and secured their profits, and exactly what was the 30 million for? I personally am dead against renting a ground. Is there no other area at the olympic park that could be developed into a 45,000 seater football stadium, if not then it should be the east stand redeveloped adding room for an extra 10,000 seats and improved transport facilities. Renting a ground is totally destabilising the club and the supporter's should not let it happen.

jimwhu said...

all you hear is we get to rent the stadium for 2 mill per year where does the figuire come from the government own the os its now there problem to find a tennant they want 2mill off us fcuk them now theyve fcukd the deal up theyve got a white elephant maybe a nominal amount of the 2 mill would sound better another thing what will happen to the naming rights who will get the dough for that? also how do we stand with legal fees etc is that money down the drain? are the ole bill doing anything about tottenhams ilegal acctivities ? i can see in the short term it should cost westham a lot less to move in there now but the whole thing is becoming a circus and maybe westham can now take the piss like the bidding process was a big piss take

fred149 said...

Well i think some people are delusional. Last time i checked results and mass amount of money was needed to compete for honors not a bloody half full stadium. Chelsea have a 42 thousand stadium and they have won plenty of honours and anyone else noticed westhamtillidie constantly saying what a good idea moving is

el martillo said...

Gaping hole? Surely you could have cum up with a better picture? Careful, the big four Internet providers will be deeming you unfit for family consumption!

Could the truth here lie in the possibility of the bid for the 2017athletics event being followed by the sale of the stadium with no provision for the white elephant running track? An official on the radio this afternoon refused to rule out this scenario.

Billingsgate, Billingsgate.

Anonymous said...

Ian Dale is a ballbag,kevtheyid

Anonymous said...

kein in manchester writes..

my head hurts..there are known knowns,known unknowns and unknown unknowns until we know the unknowns we just wont know!

Sav said...

Well said Sean. Totally agree with your analysis, including your observation that HF has selective perception and memory.

I don't see today's development as a bad thing for West Ham. As you correctly point out Levy and Hearn just cost the tax payer at least £20M and hopefully missed their chance to pick up some dole for being a pain. That's all.

Anonymous said...

This should of been sorted out by Coe and Jowell before the Olympic bid and the stadium built with retractable seating covering the track.
Apart from West Ham's owners who would want this white elephant. We shouldn't bid and let it fall into disuse allowing us to buy it cheaply, as happened with the Dome, and convert it into a proper football stadium without the track.

Deane said...

moving to the OS will only benefit the 2Davids not West Ham not the fans not Newham (with the exception of some Newham councillors)nothing nix
OPEN YOUR EYES you gullible fools