The Tavistock Stadium, and other lessons from the Olympic Stadium Review

Published on Dec 1, Mayor of London Sadiq Khan’s Olympic Stadium Review provided a detailed account of the botched planning and shambolic decision-making that resulted in hundreds of millions of pounds of public money being wasted on a stadium that satisfies no-one.

However the report, 169 pages in length and produced by accountancy firm Moore Stephens, also contains interesting information about Tottenham’s failed bid to gain control of the London 2012 Olympic Stadium.

Briefly, Tottenham’s (Baldrick voice) cunning plan was to tear down the Olympic Stadium, rebuilding it as a football stadium and refurbishing the Crystal Palace athletics stadium as the home of British athletics.

While it may have made sense on paper, and certainly looked sparklingly clever on a spreadsheet, the plan was doomed from the outset. The abandonment of North London appalled fans; politically, the prospect of tearing down the Olympic Stadium within weeks of the Games went down like a cup of hot sick.

Tottenham’s bid for the Olympic Stadium was like a West Ham season — it was over pretty much the moment it started, and soon chairman Daniel Levy had turned his focus back to rebuilding on the White Hart Lane site.

However, much of what Tottenham proposed for the Olympic site has been incorporated into the new stadium, from details such as the Tottenham Experience and hotel construction to broader funding strategies. With uncertainty still over the final bill for New White Hart Lane, and how this bill will be settled in the absence of a naming rights agreement with little more than eight months until opening, again the Review provides some useful context.

Tottenham’s quoted cost for the Olympic scheme — and really, scheme fits here in every sense of the word — was £323 million, £35m of which was public funding. The maths in the report are a bit fuzzy, but from my reading Spurs demonstrated the ability to raise £210m in finance, in partnership with Goldman Sachs, while they also committed to raise £150m in naming rights.

The bankers and the amounts have changed, but this is essentially the same strategy as for NWHL — Rothschild arranged a £400m finance facility (and a further £25m working capital facility through one of the three lenders, HSBC), with naming rights also expected to fill a significant gap.

Interestingly, the Review spells out that Tavistock Group — the investment vehicle of Joe Lewis of which Spurs is ultimately a part — “will guarantee financing of any funding shortfall.” Spurs provided letters from HSBC and Citigroup confirming that Tavistock was able to guarantee funding of up to £500m.

Furthermore, there was a specific guarantee for the £150m naming rights, in even of a shortfall.

So, do similar guarantees exist for NWHL?

In the legal dispute between Spurs and Archway Sheet Metal, in which Archway challenged the Compulsory Purchase Order evicting them from their site, Spurs were required to demonstrate viability of the project. The gist of the legal argument was that Spurs were potentially using the stadium plans as a ruse to gain control of the land by CPO — an argument rejected by the courts, and long since proven to be wrong. However, to demonstrate viability, Spurs produced a similar guarantee from Tavistock Group stating ability to cover funding shortfalls.

(By the way, the need to demonstrate viability also existed in the planning phase, which is why much more has been published in terms of project funding and financial modelling than for Chelsea’s stadium project. In their case, there have been no questions about the ability of Roman Abramovich to ultimately backstop the project if need be, which is slightly surprising given the vast potential cost and the unpredictable Russian economy).

It isn’t known if there is a similar guarantee specifically for naming rights shortfall — but it may provide an explanation of why Spurs feel able to wait until they find the right deal. There’s potentially anything from £150m to £300m missing from the stadium funding at the moment, but the project hasn’t so much as paused for breath.

Of course, this doesn’t mean there’s a £300m cheque from Uncle Joe waiting to be cashed and a “Tavistock Stadium” marketing campaign ready to be launched — inability to land a sufficient naming rights deal would be a huge failure from the Spurs leadership. But the stadium will be completed, regardless.

As a sidenote, relations between Levy and Lewis appear to be deepening. Per company filings, Levy’s eldest son, Joshua, has now been brought into the Tavistock fold full-time after starting his career at Investec. Already on the board at Mitchells & Butlers, the restaurant and pub group in which Tavistock has a share and two board seats, in the summer the younger Levy was appointed to the board of Mayfair Capital Investments and its subsidiary Timeweave. Timeweave is a joint venture with UK racing authorities to provide footage from UK race tracks to TV and betting shops. Joshua Levy replaces Ron Robson, a Spurs director, on these boards. Also on the boards is Jefferson Voss, a managing director of Tavistock and key Lewis lieutenant — it all has the look of a well-planned induction into the Tavistock ranks.

Back to the Olympic Stadium Review, a couple more points:

1. The Review confirms that Spurs were working in partnership with AEG, who planned to host 10 major non-football events at the rebuilt stadium. For NWHL, there has been no announcement of a deal with AEG; however, the club have been clear that it is a multi-purpose arena that will host non-football events (in addition to NFL) — it can hold up to 16 major non-football events. It seems likely that AEG remain involved as potential operators.

2. One of most interesting points in theReview was confirmation Spurs were eyeing some of the land around the Olympic Stadium for development. Spurs planned to build a hotel and “further Class D leisure”, similar to what is planned for the south of the NWHL site. At NWHL, Spurs will also build housing.

3. In hindsight, I’m sure Levy regrets ever getting involved in this absolute mess of a project. On the one hand, his Olympic Stadium plan looks reasonable in hindsight — football and athletics simply don’t mix, and his initial costings are very close to the stadium’s final bill, which instead of being paid for by a Premier League club and the supporters who will use it, has been borne for the most part by taxpayers. But, politically, it was naive in the extreme, and the threat of moving damaged trust levels felt by supporters. Once trust is broken, it is painfully hard to rebuild.

4. We’re going to be so much happier in the new stadium than we’d ever have been in Stratford.

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