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Campaigners for transparency over West Ham’s move to the Olympic Stadium have scored a major victory after the Information Commissioner ruled the terms of the deal should be made public, the Guardian can reveal.
Both the London Legacy Development Corporation and West Ham had long argued that the deal for the largely-taxpayer-funded stadium should remain buried beneath a sea of black ink for reasons of commercial confidentiality. The decision could be embarrassing for the London mayor, Boris Johnson, who was desperate to conclude a deal with a football club to give the stadium a sustainable future, and West Ham, battling to convince the public the terms do not amount to a taxpayers’ subsidy for a rich football club.
It may also reopen the argument over whether the LLDC broke European state-aid rules, after the Guardian revealed earlier this year that it had failed to apply to the European Commission for an exemption.
Following a convoluted Freedom of Information process started last September by the Charlton Athletic Supporters’ Trust, the Information Commissioner has ruled that the commercial terms under which the east London club will become the stadium’s anchor tenants next summer must be published.
It is already known that West Ham will pay only £15m of the £272m needed to make the 54,000-capacity stadium suitable for Premier League football, athletics and other events. The annual rental agreement on the 99-year lease is believed to be around £2.5m, although the true figure has never been confirmed.
A host of other details around the proportion of the naming rights, catering, merchandising and hospitality revenues taken by West Ham have remained secret, meanwhile.
The LLDC will also be obliged to reveal which costs it is meeting, on matchdays and elsewhere, and which are being met by West Ham. The exact terms of the lease, including a negotiated discount if West Ham are relegated, will also have to be revealed for the first time. During a long game of legal ping pong with those who sought more transparency, the LLDC would reveal only that West Ham retained all the money from ticket sales and that the annual usage fee covers matchday costs.
Unless it is successful with an appeal the LLDC will be forced to reveal the terms of the deal in its entirety, giving rise to a new wave of scrutiny over whether the taxpayer is getting value for money.
West Ham had argued in its submission that it was “deeply concerned that the disclosure of the commercially confidential and sensitive information will inevitably have an adverse impact on the stadium partnership”.
It was also concerned that full transparency around the terms had “the very real potential to damage the perception of WHUFC in relation to the stadium”. It said it could affect its ability to sell tickets and prejudice its negotiating position with customers and suppliers.
The LLDC argued that it would impact its search for a naming-rights partner and prejudice future negotiations between the stadium operator, Vinci, and other potential users of the stadium. It also revealed that West Ham had threatened to sue for breach of confidence if confidentiality clauses were broken.
But the Commissioner ruled that neither the LLDC nor West Ham had been able to demonstrate how the information could be exploited by competitors or how it would place them at a commercial disadvantage.
A coalition of 14 club supporters’ trusts, formed to campaign on the issue, will now call on Johnson not to appeal the decision and to publish the contract immediately.
“The Information Commissioner’s decision could not have been clearer, and it is equally clear to us that publication must follow. This campaign is publicly backed by 25,000 individuals, football supporters’ trusts from around the country, and the public interest in the issue is there for all to see,” said a spokesman. “We call on the mayor not to use the appeal system to delay publication of this document further. If he does it will open him up to the suspicion that he has something to hide.”
The largest chunk of funding for the transformation comes from a one-off settlement of £148.8m from the exchequer in 2010.
Newham council has provided £40m, West Ham £15m, almost £40m comes from the original £9.3bn budget for the Olympics, and a further £25m from the government.
The cost of the conversion soared from the original estimate of £160m when the decision was taken to award West Ham a 99-year lease after an earlier process had collapsed amid acrimony and legal challenge.
West Ham and the LLDC have argued that without the upfront costs to convert and kit out the stadium to make it suitable for football, it would be an ongoing drain on the public purse.
The LLDC board was formerly chaired by Johnson, who quietly resigned from the post shortly before the general election, and is now headed by his long time Olympics adviser, Neale Coleman.
“We are disappointed by the Information Commissioner’s decision which we believe will damage our ability to secure the best deal for the taxpayer in future. The stadium will have many users and publishing the contractual details will undermine our ability to deliver the best financial outcome from numerous future negotiations. We always strive to balance transparency while protecting the taxpayers’ financial interest and we are considering the ruling carefully as we decide what action to take.”
It is believed that the LLDC will come to a decision in the next 10 days over whether to appeal. If it decides against, it has 35 days from 3 September, the date the Information Commission sent the letter, to make the information public.