How will the move to the OS affect club revenues?

An archive of news, events and discussion leading up to and post West Ham United's historic move from Upton Park to Stratford in 2016.

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Francoisvander or else
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Re: How will the move to the OS affect club revenues?

Post by Francoisvander or else »

Now that season ticket prices have been announced does anyone want to have a go at revisiting match day revenue based on the publicized prices.
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Re: How will the move to the OS affect club revenues?

Post by JFK »

Francoisvander or else wrote:Now that season ticket prices have been announced does anyone want to have a go at revisiting match day revenue based on the publicized prices.
We don't know the split of Season Tickets between the four bands at the BG let alone try and transfer to the OS.

Then factor in age discounts, family tickets, new people, Band 5, 1966 Club etc etc.

WHU also supposed to give away 100k tickets a season. I don't know how many we give away now. We know it's not just minor games with the incidents at the Man City game previously. I know someone who went to QPR yesterday for free via charity based in Whitechapel. A Middlesboro fan in the QPR end! He is ex forces living in a hostel for ex servicemen. QPR don't exactly have the biggest ground to dish them out like Sunderland and other clubs do.

Good luck anyone wanting to do that! WHU no doubt paid consultants thousands to come up with the very same projections!
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Re: How will the move to the OS affect club revenues?

Post by gavrosh »

Reading about the means by which STHs are to be given 2 friends passes to new season tickets, which means a significant ramping up of band 1s and 2s, plus the other news recently, I though I'd revisit my earlier workings.

16 boxes, average cost £100,000 pa each = £1.6 mil
1000 Boleyn places cost £2016 each = £2.16 mil
30 places at BM6 lounge, something silly like £30,000 each = £900,000
Remaining corporate areas (Arnold Hills, Great Briton, Forge etc) =1100 at perhaps £5000 each = £5.5 mil
1000 Academy places at $1440 each = £1.4 mil

Total corporate = £11.06 mil

Extra season tickets (assumed 40k vs 23k currently, primarily bands 1 & 2 plus 2000 Club 1966 at £1100 each) = £12 mil

Mathday ticket sales = 10000 * average £40 ticket * 20 games a year = £8 mil

So ticketing alone brings in £31 mil extra a year.

Plus whatever share of non-ticket matchday sales are due to us....

Total = £40 million? Versus £18 million last year.

Add long term potential for increasing kit deal and shirt sponsorship levels to those similar to Spuds now = £26 mil vs £7 mil last year.

Total = approx £66 mil vs £25 mil last year.

Plus any potential stadium sponsorship revenue, whch remains a very grey area. Lets assume we get a share, in which case we are talking an extra £10 mil perhaps.

All in all around £50 mil a season, which takes us to where Spurs are now.
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Re: How will the move to the OS affect club revenues?

Post by 1mcavennie »

Thanks Gavrosh

It has to be acknowledged that your figures are educated guesses but the £19m pa additional shirt sponsor and kit deal looks over estimated. Per the news today the umbro kit deal is £2m a year more than Adidas (which we are locked into for the next 5 years). I think the £6m a year sponsorship deal with Betwonce is also about £2m a year better than Alpari. So your estimated looks about £15m pa heavy to me.
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Re: How will the move to the OS affect club revenues?

Post by 1mcavennie »

...and if you are making long term comparisons with Spurs, once they have their bigger better stadium open won't their revenues increase far greater as they will have full rights to all forms of income?
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Re: How will the move to the OS affect club revenues?

Post by v-man »

1mcavennie wrote:...and if you are making long term comparisons with Spurs, once they have their bigger better stadium open won't their revenues increase far greater as they will have full rights to all forms of income?
Yes, however they will also be saddled with a few hundred million pounds worth of costs attributed to building that 'bigger better stadium'

Swings and roundabout....
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Re: How will the move to the OS affect club revenues?

Post by gavrosh »

Yes of course, these are mid term approximations for once we are ensconced in the stadium. The Betway/ Umbro deals are clear improvements on the previous ones but deals will jump massively if we can start to get into Europe regularly.

I also think theres plenty of scope to increase capacity further (the stadium already has permission for 60k and I'm sure more of the unused seats could be utilised via a planning amendment) and long term theres scope to fill in the end gaps to add further capacity and reduce the 'gapiness' of the stadium. The club could also look at restructuring part of the west tier to add a second level of hospitality. All of these things would further boost match day revenues and would require LLDC permission and a variation of the lease with west ham paying more in rent.
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Re: How will the move to the OS affect club revenues?

Post by Doc H Ball »

Gav - in your numbers you have to deduct 2.5m rent, loss of catering (I think the franchise at the BG is £1.5m) and any naming rights you could get for the BG.
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Re: How will the move to the OS affect club revenues?

Post by gavrosh »

Right you are Doc, so in summary in the very near term I am currently thinking the move adds about £35 mil to revenues, taking into account those costs and revenue forfeitures you mentioned.

Longer term, a possibility of stadium sponsorship revenue share, reconfiguring the stadium and greater attractiveness of the brand could see a further increase in revenues well in excess of £70 million. Of course that, and other potential revenues such as merchandising, will be a function of relative success.
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Re: How will the move to the OS affect club revenues?

Post by Doc H Ball »

I reckon + £35m isn't far off Gav.
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Re: How will the move to the OS affect club revenues?

Post by Wembley1966 »

I thought that we got the catering revenue from corporate/hospitality, but not the rest of the ground.
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Re: How will the move to the OS affect club revenues?

Post by gavrosh »

What I heard was that corporate goes to us, but that with normal catering we get a share after a threshold - a high one, I was told - is reached. Perhaps the same sort of deal is there with the stadium sponsorship? Say, the LLDC earn the first £10 million per annum.
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Re: How will the move to the OS affect club revenues?

Post by gavrosh »

2013/14 full club finances released. West Ham still amongst the second pack with revenues of £115 million v Villa (£117m), Everton (£121m) and Newcastle (£130m).

Premier League finances: the full club-by-club breakdown and verdict

http://www.theguardian.com/football/201 ... are_btn_tw

Their conclusion: Karren Brady, now the Conservative peer Baroness Brady of Knightsbridge, notes the 2016 Olympic stadium move means West Ham will occupy “one of the greatest arenas in world football”. Remarkable for a club in financial crisis when Brady’s long-term employer, David Sullivan, and David Gold took over in 2010.

Brady’s focus and £49m loans from Sullivan and Gold, on which they charge 6-7% interest, have hammered the club into shape to occupy the stadium, built with around £600m public money – surely the greatest stroke of fortune in football history.
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Re: How will the move to the OS affect club revenues?

Post by gavrosh »

Letter from Denis Hone, Chair of LLDC to John Biggs of the GLA in 2013:

"LLDC are aiming to secure naming and other sponsorship rights over the next year through a competitive process. We will be doing this in collaboration with WHU (who retain shirt sponsorship) to ensure that the full value for shirt and stadium naming rights are maximised. The concession agreement sets a base value below which West Ham will not share. In terms of food, beverage and hospitality for WHU matches, again, LLDC have agreed a baseline below which WHU does not share, and above revenue is shared but significant in the Grantor's favour. For non WHU events the Grantor retains all food, beverage and hospitality rights. Due to confidentiality agreements in place we are unable to disclose full details but again the deal provides significant potential upside to the Grantor while ensuring that WHU are able to deliver a viable business plan which will allow the club to thrive in the stadium"

http://www.london.gov.uk/moderngov/docu ... 0costs.pdf
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Re: How will the move to the OS affect club revenues?

Post by mdennis »

So I should buy 6 beers instead of 5 to ensure West Ham get some of my money? :)
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Re: How will the move to the OS affect club revenues?

Post by Modern »

Should the move go really well is there any scope for West Ham to open up any of the closed off seats or does the internal refit mean that capacity for football is locked at 54K?
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Re: How will the move to the OS affect club revenues?

Post by 1mcavennie »

I'm more interested in how the move to the OS will affect my revenues (expenditure)

From what I have read on here most seem to upgrading and paying more for their 'comparable' (worse) view

Even Pinky! :shock:
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Re: How will the move to the OS affect club revenues?

Post by JFK »

Regarding the 6/7% interest that the Dave's charge.

In 2013 DS sold one of his buildings and used the money to buy the 25% stake and this money was lent back to pay off the external banking debt.

I notice DS has a further building up for sale for £55m. The current rent paid is only a return of 2.4%. I can see DS using these funds to buy that final 10% which he has an option on until the end of 2016 and settling up the loan from C & B Holdings early. It would free up some more cash to invest at this vital time.

I wonder when they will get the money from the sale of the BG and when do they have to pay the £15m? Is circ. £30m the price?

As for the likely uplift in the income in 2016, I've always used a lower estimate of £30m. That increase alone would put us top on the 2nd tier. Added to the new TV deal, WHU could in fact rise to the 12th largest club on turnover in the world.

Tottenham played 14 more games than us this season. All that extra ticket money, TV, food etc etc. It's hard to close the gap to the Top 6 unless you have those extra games and that means doing well in cup and getting in Europe. And doing this most seasons. That success brings the better sponsors etc etc.

We have the great foundations to break into that top group. Exciting times ahead!
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Re: How will the move to the OS affect club revenues?

Post by gavrosh »

This is a few months onld but well worth a read:

http://swissramble.blogspot.co.uk/2015/ ... adium.html

Looking as Spurs as a 'base case' for revenue uplift from the move, you can see that they earn about double us in terms of match day revenue (£40 mil vs £20 mil in 2013) while commercial revenues there are £45 mil vs £20 mil at West Ham (again, 2013 figures). The total difference then is £45 mil, which you can use as a very quick and dirty estimate for total revenue uplift from the move. Take away the £10 mil that we're giving up to the LLDC in terms of rent and revenue share and you get back to £35 million.
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Re: How will the move to the OS affect club revenues?

Post by stu1 »

How have Tottenham managed to generate £33m in match day tickets, where as we've only managed £18m yet our stadiums are basically the same size. :?

EDIT

Don't worry, I see someone mentioned they played 14 extra home games.
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