Hammers must pay debts before move
Published 24/07/2013 | 14:39
West Ham will have to pay off all their bank debt before their move to the Olympic Stadium, the club's vice-chairman Karren Brady has revealed.
The Hammers have debts of £70million, half of that bank debt secured on Upton Park, and that has to be cleared when the ground is sold ahead of the move to the Olympic Stadium in 2016.
Brady, giving evidence to the House of Lords committee on Olympic and Paralympic legacy, also insisted that the club was not getting the stadium on the cheap and that the deal was good value to the tax-payer.
The club did have a buyer in place for Upton Park but that fell through due to the delays in the deal to be Olympic Stadium stadium tenants, and Brady expects income projections from the sale to be down 50% on 2010 due to the sluggish property market.
Brady added she did not expect the sale would cover much more than the lump sum the club will have to pay to the London Legacy Development Corporation (LLDC) to move to the Olympic venue.
She said: "We did have a tentative deal [for Upton Park] but that fell away. We hope the money generated from the sale of Upton Park will be enough to fulfil our commitment and to help pay off some of our bank debt.
"When we bought the club and took on more than £100million of debt that was guaranteed on the ground. We have to pay off all our bank debt to move, we can't take the debt with us.
"If there is any excess [from Upton Park sale] it will meet some of that debt but I don't expect there will be."
Brady was asked to respond to a claim by former sports minister Richard Caborn that West Ham was getting the £600million stadium for just £15million plus £2million a year rent with the tax-payer picking up the tab.
Brady defended the deal however, saying: "The alternative scenario does not bear thinking about.
"West Ham is not getting a free stadium. The stadium was built for the Olympics and what are we going to do with it? Across the world stadiums that are not used die.
"Without anchor tenants the cost would be huge to the tax payer."
She added that West Ham would generate "many hundreds of millions of pounds" over the 100-year lease.
The committee also heard from Leyton Orient chairman Barry Hearn who insisted West Ham's move was "not a done deal" because of his ongoing judicial review and legal action against the Premier League.
Hearn wants his club to be able to ground-share with West Ham and use just the lower tier for Orient's matches. He also described the LLDC's deal with West Ham as "state sponsorship beyond my wildest dreams".
Hearn said: "This is not a done deal. West Ham have an agreement but I have a judicial review outstanding and litigation with the Premier League that West Ham even moving would be a breach of Premier League rules.
"We have ended up in situation where we have gifted £500million of tax-payers' money to a Premier League club that has a turnover of more than £100million. It's a wonderful gift but if I was an Arsenal fan I would wonder why we bothered paying to build a new stadium.
"This is state sponsorship beyond my wildest dreams. In effect it's rent free as they have ability to develop Upton Park."