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Public money, private investment or lucrative lease? Does the source of money for new stadia matter to fans?
Stadia cost money – it’s an irrefutable truth of the business. Whatever the sport, the building of a new venue, or even the refurbishment of an existing facility, requires a significant outlay of funds. Where that money comes from can vary, but does the source of cash have an impact on the finished product?
Just recently, a judge in San Diego ruled that permission would not be needed before a proposed new stadium for the Chargers could make use of taxpayers’ money. Some of those fans keen for the NFL team not to move to Los Angeles are extremely happy about the decision – but what about the taxpayers with little or no interest in the Chargers, or the sport as a whole? Does the potential use of their hard-earned money to build a venue they are unlikely to ever visit cause bad feeling towards the team, the sport, or the county officials who are being free with other people’s money?
But what’s the alternative to public subsidies? Private investment can play a vital role. The Sports and Entertainment Center in Mission Bay will be the new home for the Golden State Warriors – and it’s privately funded. So the taxpayers won’t have to foot the bill. The new arena is part of a sprawling multipurpose complex which, investors hope, will kick-start development in the area. But will the community feel less connected to the new venue? Fans may well be consulted on whether or not the team goes through a name change, but the developers aren’t exactly answerable to them for much else to do with the project? Will the sense of community between team and fans be eroded?
Courtesy of Populous
Of course, in the case of English Premier League team West Ham United, there’s another option. The soccer team will shortly move into its new home – the former Olympic stadium, built for the London 2012 Games, and paid for by the UK taxpayer. Redeveloping the venue has cost almost as much as the original construction, but the team itself will be paying between £2m and £2.5m in annual rent during the 99-year lease. A number of significant running costs (including pitch maintenance and other stadium utilities) will also be paid for by taxpayers. However the fans feel towards their soon-to-be-new home, there’s certainly a lot of resentment towards the club from supporters of other teams – perhaps resentful towards what is viewed by some to be a pretty good deal. Fellow London club Tottenham Hotspur was reported to be bidding for the lease to the former Olympic centerpiece, but was unsuccessful. Having failed in their bid for the redeveloped venue, Spurs have had to develop their own, new (and only recently approved) home. The club’s owners, however, will be footing the bill.
Unlike the construction of new facilities (whether they are built using public or private subsidies), however, the very nature of leasing involves a bidding process. Though this can make little difference to the public perception of how ‘fair’ a deal may be, it’s worth noting that tenancy agreements like the one agreed between West Ham United and the London Legacy Development Corporation must be approved, and all details of costs and expenditure are established before a tenancy is agreed. The counterargument from West Ham is that the bid the club put together made more sense than those submitted by the likes of Tottenham. Indeed, a statement from a WHUFC spokesperson said: “It should be remembered that during a fair, open and robust process that was open to any party or organization in the world, West Ham United were chosen as the group that delivered the best long-term, viable future for the stadium and the best return for the taxpayer. Our presence underwrites the multi-use legacy of the stadium and our contribution alone will pay back more than the cost of building and converting the stadium over the course of our tenancy." Perhaps unfairly, the onus appears to be on West Ham to justify the agreement they’ve worked out – essentially asking the tenant to justify the landlord’s decision.
Where the money for a new stadium comes from can vary. The knock-on effect of that financial source…? Well, that could be a whole different story.