London Olympic Stadium - West Ham United, Tottenham Hotspur

The Olympic Park Legacy Company’s (OPLC) board voted unanimously last week to allow West Ham to take over the Olympic Stadium after the completion of the 2012 games. The bid from Tottenham Hotspur would have offered greater benefits to the taxpayer, but West Ham played a clever political game, mobilising the UK’s influential athletics establishment on its side. Spurs offered to refurbish the athletics facility at Crystal Palace as part of its bid, but one of the drawbacks of this aging facility is the difficulty of getting to it.

However, the idea of demolishing the Olympic Stadium which was a key element of the Spurs plan was a step too far for the authorities. Admittedly, the stadium was built as a minimalist one and it could be argued that taxpayers’ money was not well used. But the idea of converting large parts of it to scrap metal was an image which Spurs’ opponents made effective use of.

Spurs have threatened to seek a judicial review of the decision under European competition law and they could have a case, but will probably not decide to pursue it. The most aggrieved club is probably Leyton Orient whose ground is one mile from the Olympic Stadium. They are drawing attention to a Premier League rule which states that stadium relocations should not disadvantage any existing club, including Football League clubs.

The move is a shorter one for West Ham who are an authentic East London club which Spurs are not. There was certainly some opposition to the move among Spurs fans who did not like the idea of moving away from North London, although it is always difficult to judge how extensive such vociferous concern is. For both Spurs and West Ham, one of the key attractions of the Olympic Stadium is good transport links which neither club enjoys at their current locations.

The OPLC set out five criteria for the bidders, including the revenues they could raise for the taxpayer's benefit - where Spurs were ahead. There are still some doubts about whether the finances in the West Ham plan stack up, e.g., whether they are too optimistic about the revenue from non-football events. However, Spurs are thought to have had difficulty in meeting two of the criteria, speed of re-opening the stadium after 2012 and allowing flexible use.

One of the big drawbacks of the Olympic Stadium is that it will have an athletics stadium between the fans and the pitch. Anyone who has been to such a stadium says that it kills the atmosphere. It will therefore be difficult to replicate the passionate atmosphere experienced at the Boleyn Ground, particularly if the stadium is only half full. West Ham are now considering the use of retractable seating to bring fans closer to the game on match days. It would cost around £10m. The £95m conversion programme will include upgrading the stadium to provide a proper roof, corporate boxes, hospitality and catering facilities and toilets. The absence of these shows just how minimalist it is.

The stadium will still be owned by the taxpayer by a Mayoral Development Corporation (MDC), but it will be leased to a special operating company jointly owned by West Ham and Newham Council. The company will pay the MDC a commercial market rent, as yet unknown, and receive payment from UK Athletics for its 20 days of use a year. Essex County Cricket Club will also contribute revenue as will Live Nation, which will stage concerts.

Gate receipts from football will initially be used to pay a £40m loan. This is expected to take ten years.  In the meantime West Ham hope to reduce their bank debt to £20.5m by 2013 and generate annual income of £100m by 2014. The club's total debts are about £75m and they have not made a pre-tax profit since 2006. Their plan is based on attracting the same average number of fans as attend the Boleyn Ground, around 33,500.

The failure to win the stadium is a setback for Spurs. At first it looked as if Spurs had put in a bid to place pressure on Haringey Council who have not been as helpful as they could have been about the redevelopment of White Hart Lane.  But it soon became apparent that they were deadly serious.

If Spurs are to maintain their effort to be a top four club in the long run, they need to increase their matchday revenue.  Chelsea earn almost twice as much as them from matchdays, Arsenal two-and-a-half times as much and Manchester United not far short of three times as much. The constraint in improving Spurs' revenue is the stadium which sells out. They have a long list of would be season ticket holders in the tens of thousands.

The Spurs chairman Daniel Levy has apparently ruled out redeveloping White Hart Lane which would increase capacity from 36,000 to 56,000 because of rising costs and outstanding planning and transport issues.An important element in funding the £450m scheme would have been the sale of stadium naming rights. But potential sponsors are concerned that a new stadium built on an existing site is likely to retain its traditional name in the public mind, reducing the amount they are prepared to pay.

Nearly half of Arsenal's matchday revenue comes from corporate tickets which underlines Tottenham's need for a solution to the transport issues. Corporate fans want easy travel. Hence the commercial attraction of moving the club from North to East London.

In the short run, West Ham need to focus on avoiding relegation last year. If the Olympics Stadium plan works, it could see them join the top rank of London clubs. If it doesn’t work out, it could set them back for years to come.  But, like Manchester City, they are getting a taxpayer funded facility at a very reasonable price.

Wyn Grant is a regular contributor to Albion Road and also the publisher of footballeconomy.com, a website covering the business and economy of the game of football.