West Ham vs Tottenham, the Battle for the Olympic Stadium

This week the Premier League clubs West Ham United and Tottenham faced off in a battle for the ages, this one was not on the pitch, but was rather waged over the control of the 2012 London Summer Olympics Stadium.  The stadium which has been under construction will seat about 80,000 for the Olympic games and will be used for the opening and closing ceremony, as well as track and field events.  Originally the plan for the £537 million stadium was for it to be converted down to a 25,000 seat stadium to host athletic and other events after the Olympic Games.  In November of 2010, things got a bit more interesting when it was announced that there were two final bids for the stadium, both of which were coming from two notable Premier League clubs.

The first bid by Tottenham was also partially backed by Anschutz Entertainment Group (AEG), who are famous for their work on the Staples Center in Los Angeles, the Sprint Center in Kansas City, and potentially a new football stadium in Los Angeles next to the Staples Center.  Some had said that the AEG-Tottenham joint bid was a sure winner, especially after AEG converted the Millennium Dome into the O2 Arena, which is the world’s largest grossing concert arena.  The bid for the Olympic Stadium was said to a minimum of £250 million to convert the Olympic Stadium into a 60,000 seat venue for both Tottenham and large-scale concerts.  Tottenham’s biggest criticism seemed to be that the team is based a whopping 5 miles away from the Olympic Stadium, which is noted as being quite an issue for its supporters to travel.

The second from West Ham, U.S. based concert group Live Nation, and the Newham Council.  This plan decided to keep the track around the pitch in the stadium, and convert the venue into a 60,000 seat venue for West Ham matches, concerts, as well as other future athletic events.  It was reported by ESPN Soccernet that the Newham Council had given at least £40 million backing to the West Ham bid, which is said to be a conversion that will cost around £100 million.  The main issue with the West Ham bid seemed to be that the team was going to move out of 35,000 seat Upton Park to a stadium with 25,000 more seats, making some think that they would not be able to fill the Olympic Stadium.

As things began to heat up in the battle, both bids were presented with arguments from both clubs in the London Evening Standard.  In effort to try to make their bid even more pleasing Tottenham offered to even renovate Crystal Palace’s training facilities.  Today it was reported by the BBC that West Ham’s bid had won, and that the Hammers would be moving in at the new tenant after completing conversion of the stadium after the Olympics.  Where does that leave us?  Well Tottenham will probably now have to go back and start looking at their plans to move just north of the current location of White Hart Lane and build a 56,000 seat stadium as they had originally planned, and as had been approved by the Mayor of London.  That leaves Upton Park, which the club is claiming could be vacated and be used for redevelopment by 2014.

Why do so many commentators on football not understand economics?

There is actually some change in the regulations surrounding the Premiership in the upcoming season, which began in earnest 45 minutes ago.  Matt Slater at the BBC discusses the financial ones, while there are also squad limits now.

I’m just getting tired of people commenting on the problems with football, and proposing limits like salary caps, to solve all problems.  Everyone who studies economics though, or even studies mankind, knows that if you put some arbitrary cap on something like a salary, clubs will just find other ways around it.  In rugby league’s Super League, WAGs get paid fat sums for spending an hour in the club shop or behind the club bar.  It’s just too easy to find other ways to make the payments to attract the best players.  Of course, Slater is also talking about more transparency in financial dealings.  A salary cap is a perfect way to ensure much less transparency.

Yet people still propose such useless measures. Why?

Le Hand of God

The fall-out of last night’s France-Ireland World Cup Play-off match will continue to reverberate around: The BBC currently has a live news feed, the type of thing reserved for actual football matches. At 2pm Ireland will make a statement, apparently, but of course all focus remains on UEFA and FIFA reactions – both of whom are firmly tight lipped over the episode.

The calls are there, for video technology, and all sorts of reforms, but there does appear to be something somewhat forgotten in all of this: Ireland were not heading into the World Cup but for Henry’s handball. Henry’s handball moment came minutes after France were denied what to many was a clear penalty and furthermore, had the “goal” not happened, Ireland still needed to put the ball in the net themselves to make it to South Africa, or triumph in the lottery of a penalty shoot-out. So it’s a little strong to say that this one decision cost Ireland all those potential millions.

Football is a fluid game with one controversy after another, and much of that is what makes the game such a money spinner for many: The BBC and other more commercial news outlets would be having many less hits today had the game been conventional and boring, with video technology ruling the goal out.

The interesting thing naturally is the conspiracy theorists: France were seeded in the play-offs, ensuring they didn’t face Portugal or Russia, the other big nations in the play-offs. Then they got the awful decision in their favour, as opposed to Ireland. Many English Premiership watchers notice that Manchester United and Liverpool always get the decisions in their favour, particular at home. But is this just a perception, given our cognitive abilities, or a general statistical pattern? I feel a research idea blossoming…

A Tough Choice

British sports fans face a tough decision in the months to come, although naturally it is a decision taken by their politicians as opposed to themselves, but it’s unlikely politicians will go as far as the public would want in this circumstance.

Last week, a review body reported back its conclusions on what sports should remain on free-to-air TV channels in the UK. The conclusion was that some events should be removed (does anyone really care about the Commonwealth Games enough for them to be on the BBC?), but others returns to free-to-air TV (i.e. the BBC or ITV).

The response, naturally, of the governing bodies of the sports listed to return to free-to-air TV was horror. All that nice money from Mr Sky Sports will be no more. Cricket, which generally is no longer on any of the free UK channels, cried foul particularly loudly. Perhaps they have a point. The home Ashes series (England plays Australia every 18 months alternating between playing in England and in Australia), which are scheduled to return to free-to-air, have been shown by Sky Sports the last two occasions they’ve taken place (2006 and 2009). By some statistical chance, it happens England have won both (with a 5-0 hammering in Australia squashed inbetween). Before that, it was the early 1980s before an England team had wrestled the Ashes back from the Aussies.

Cricket authorities say we’ll be back in the stone ages, with bad cricket, if the Ashes go back to free-to-air, and deny the authorities something in the region of £90m a year. So, are fans more keen to watch mediocre cricket for free, or pay to watch decent cricket? Sceptics will argue that fewer kids are playing cricket because they can’t watch it now like they used to be able to, hence it should be free to watch. But what’s the value in it being free, and (maybe) more popular, if there’s no money to affor the nets, pads etc. to help kids develop.

Tricky decisions to be made, and it’s almost certain no serious economic analysis will be brought to bear on the debate…

Keeping up to date

If you’re keen on keeping up to date with sports finance news, the BBC now has its own Business in Sport section of its website, with many interesting articles, including the one on Argentinian soccer’s debts I commented on recently.

If you’re keen on keeping up to date with sports finance and economics new research, a good place to go is to join the New Economic Papers mailing list for Sports and Economics (a wider list of subject mailing lists can be found here). One of the most recent paper listed on there is by co-blogger Brad Humphreys and Jane E. Ruseski on tit-for-tat strategies in NCAA football.