This Olympic Stadium Situation
Fri Apr 15, 2011 9:47 am
Seems to be getting out of control with 2 PL Football Clubs (Tottenham Hotspurs & West Ham Utd) fighting to get the rights to own the stadium and now a 3rd Football League club (Leyton Orient) joining Tottenham and requesting a judicial review on the legality of a local council (Newham) offering West Ham Utd a £40m loan to help with their relocation costs.
Both requests for a judicial review on the matter of a local authority using public money to support a business (West Ham Utd) are citing UK & EU Laws on Competition as the basis for their request believing the loan to be illegal and unlawful.
This judicial review could very well have far reaching implications for a number of FL clubs including Hull City, Doncaster Rovers and Swansea City as each of these clubs has in the past decade been effectively gifted new stadiums built at the ratepayers expenses.
My understanding of the legal challenge by Leyton Orient is that the council loan gives West Ham Utd an unfair advantage over other football clubs or businessess and if this is upheld could it lead to other clubs taking action.
When you consider the situation with the 3 clubs I have mentioned each of the agreements with the relevent local authorities have come under scrutiny from auditors because of the lack of return on the public investment.
The Keepmoat Stadium in Doncaster for instance has seen the council reduce its asset value from £30m to 500K because of the lack of revenue that was being generated for the council despite 2 independant sports clubs using the stadium.
Swansea Council have been under pressure regarding the complete lack of income from the Liberty Stadium since it was completed nearly 6 years ago, and last year agreed to write off £2.37m mortgage it took out to fit out the stadium but never received a penny in repayment over 5 years. The Liberty Stadium costs the Council £33m to build and to date the council has not received a single penny in income from that investment again despite 2 independant sports clubs using the stadium.
Hull council have recently renegotiated the lease for the KC Stadium because of similar problems with a lack of income on the £30M+ investment in building the stadium, again despite 2 independant sports clubs using the stadium. Hull Council are currently in discussions with the new owners of Hull City about buying the KC Stadium at a knockdown price but that would effectively be a double whammy to the rate payer of Hull because the council funded the building costs of the KC Stadium by selling shares in Kingston Communication shares which were the property of the Hull rate payer.
All 3 clubs have seen a remarkable rise in their league status since the completion of these stadiums indeed many will remember about a decade ago Swansea and Hull playing the last game of the season at the Vetch which would have seen them relegated if the Swans lost. Both clubs have gone from the bottom tier of the League to the Championship and in Hull City case the PL.
It is an interesting question if they could have achieved this if the clubs had to finance the cost of building these new stadium and if they had each been fully responsible for the running costs and upkeep of the stadiums.
I think it would not have been possible and the clubs being in receipt of the local authority support which in each case is approx £40m has given them an unfair advantage over other clubs.
My question is if the High Court rule that Newham Councils proposed loan to West Ham Utd is illegal and unlawful under UK & EU Competition laws where will this leave Swansea City, Hull City and Doncaster Rovers.
Will that decision result in other clubs requesting judicial reviews of the public support given to these independant sports clubs and if it does what would the likely effect be if this public funding support is removed.
As I say this Olympic Stadium situation could have far reaching effects.
Both requests for a judicial review on the matter of a local authority using public money to support a business (West Ham Utd) are citing UK & EU Laws on Competition as the basis for their request believing the loan to be illegal and unlawful.
This judicial review could very well have far reaching implications for a number of FL clubs including Hull City, Doncaster Rovers and Swansea City as each of these clubs has in the past decade been effectively gifted new stadiums built at the ratepayers expenses.
My understanding of the legal challenge by Leyton Orient is that the council loan gives West Ham Utd an unfair advantage over other football clubs or businessess and if this is upheld could it lead to other clubs taking action.
When you consider the situation with the 3 clubs I have mentioned each of the agreements with the relevent local authorities have come under scrutiny from auditors because of the lack of return on the public investment.
The Keepmoat Stadium in Doncaster for instance has seen the council reduce its asset value from £30m to 500K because of the lack of revenue that was being generated for the council despite 2 independant sports clubs using the stadium.
Swansea Council have been under pressure regarding the complete lack of income from the Liberty Stadium since it was completed nearly 6 years ago, and last year agreed to write off £2.37m mortgage it took out to fit out the stadium but never received a penny in repayment over 5 years. The Liberty Stadium costs the Council £33m to build and to date the council has not received a single penny in income from that investment again despite 2 independant sports clubs using the stadium.
Hull council have recently renegotiated the lease for the KC Stadium because of similar problems with a lack of income on the £30M+ investment in building the stadium, again despite 2 independant sports clubs using the stadium. Hull Council are currently in discussions with the new owners of Hull City about buying the KC Stadium at a knockdown price but that would effectively be a double whammy to the rate payer of Hull because the council funded the building costs of the KC Stadium by selling shares in Kingston Communication shares which were the property of the Hull rate payer.
All 3 clubs have seen a remarkable rise in their league status since the completion of these stadiums indeed many will remember about a decade ago Swansea and Hull playing the last game of the season at the Vetch which would have seen them relegated if the Swans lost. Both clubs have gone from the bottom tier of the League to the Championship and in Hull City case the PL.
It is an interesting question if they could have achieved this if the clubs had to finance the cost of building these new stadium and if they had each been fully responsible for the running costs and upkeep of the stadiums.
I think it would not have been possible and the clubs being in receipt of the local authority support which in each case is approx £40m has given them an unfair advantage over other clubs.
My question is if the High Court rule that Newham Councils proposed loan to West Ham Utd is illegal and unlawful under UK & EU Competition laws where will this leave Swansea City, Hull City and Doncaster Rovers.
Will that decision result in other clubs requesting judicial reviews of the public support given to these independant sports clubs and if it does what would the likely effect be if this public funding support is removed.
As I say this Olympic Stadium situation could have far reaching effects.