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You can get The Gist on this story here
A few years ago, I stood in the O2 with 20,000 other people and watched The Who, a sentence my 10-year-old self at the Millennium Experience would have been well embarrassed about, because the building was a national embarrassment and The Who is what I would have called ‘Old Man Music’. The embarrassment has given way to the busiest arena on earth by tickets sold. The ticket cost a fortune (thanks Pete Townshend), and until I sat down to write this, I had never once thought about where it went after the till.
Last week’s newsletter ended in 2002, with the Dome and 170 acres of Greenwich handed to a developer for no money up front, against a minister's promise of up to £500m in profits for the public.
The money from every ticket sold in that building is split among a chain of people: the company that runs the venue, the owner of the lease it sits on, the owner of the ground underneath, and, at the end, the public's share of the profits. Everyone in that chain except the last one bought their place at a price.
AEG, the entertainment group of American billionaire Philip Anschutz, runs the venue, and they earned their place. They spent hundreds of millions turning a punchline into a venue, reopened it on 24 June 2007 with Bon Jovi, and have filled it most nights since. They even rented out the name. On 7 October 2026, 2 weeks ago, they renewed the naming rights for a reported £200m.
The largest in British history, keeping it The O2 until 2038. A price agreed by both sides, paid in full.
The building itself sits on a 999-year lease, and the lease has changed hands twice. For astronomical margins. Trinity College, Cambridge (the less good one) bought it in 2009 for £24m. In August 2025, they sold it to the pensions insurer Rothesay for £90m, a tidy 275% return, simply for holding a piece of paper through 16 years of stand-up and concerts. Not bad.
Then there is the land around the arena, 150 acres covered in flats. In June 2012, the developers Quintain and Lend Lease sold 60% of it to Knight Dragon, the investment vehicle of the Hong Kong billionaire Henry Cheng, for a reported £480m.
In November 2013, Knight Dragon bought the remaining 40% for £186m. For a total of £666m for the land, and the public's cut was £0.
嘩啦啦的錢幣聲 (again)
The public's profit share is contingent on developing the land. Selling the land itself is a different kind of transaction. CLASSIC!
The public is last in the chain. Unsurprisingly.
A share of the profits sounds like money, but crucially, profit is whatever is left over after costs. Duh!
The developer writes the list of costs, and the public's share, magically, sits at the end of that list. Since 2002, the clause has been rewritten 3 times. The first iteration paid the public from profits as the land built out over 20 years. The 2012 to 2014 amendment moved the developer to the front: Their 22% priority return on their money came first, every year, before any surplus was distributed. The 2016 rewrite contains my favourite clause. From then on, the public's top-up became payable only if the developer achieved a 20% IRR, and the Greater London Authority's own decision states, in its own words, that "there is a risk that GLAP may not receive overage payment." The same deed raised the homes on the site from 10,000 to 15,720. More homes, and a public share of the public's own paperwork, may never arrive. It is just sitting there, bold as brass, in the minutes.
In 2015, after a freedom of information fight, the GLA reported that it had returned £ 21.4 m to the public sector since 2002. Against a £500m promise, 4p in the pound, in 13 years. No figure has been published since, and the GLA's 2022-23 land company report notes the overage "may not be payable." The public owns a share of the profits on 170 acres of London and cannot find out what its share has earned. This, an increasingly common occurrence in public finance management, is no longer shocking to any of us, but it should be.
Try running your bank account on those terms. The Public Accounts Committee costed selling and managing the site at £28.7m. More has gone out than has ever come back. On a land deal. In London. IN LONDON!
The homes went the same way the money did. In February 2013, the affordable housing in the first phase was cut from 35% to 21%, over 500 homes, on the strength of a viability assessment kept confidential until a tribunal ordered it released in February 2015, after the Bureau of Investigative Journalism spent 18 months hammering the door.
What is truly galling is that the whole endeavour was a good bet from the start. The peninsula was worth cleaning, and the tent was worth keeping; I mean, it became the best big venue for live music. We had this in our hands. Every part of the gamble paid off: the land, the building, the sign, the lease. The only part that never performed was the part for us!
So why did the public's negotiators take the mate's rates deal? Because the people who agreed to it in 2002 would never be paid in money. A minister's currency is the announcement, and the announcement:
170 acres regenerated at no cost to the taxpayer, with £500m to come, paid out in full, immediately, to the man who made it.
The cash was due decades later, on somebody else's watch. The country named the Dome after a thousand years and signed its land away on a 999-year lease, and the distance between those 2 numbers and the 4-year horizon of the people signing is where the £500m went.
Great deal for Lord Falconer
I appreciate that a version of this story that has a villain would be more satisfying. The problem is, it would be wrong. The developers negotiated hard and kept to their agreements. The college made a shrewd purchase and a shrewder sale. The minister believed the announcement, and it carried valuable political capital.
The structure did the rest, and it's now standard: this is how Britain sells public land, with the developer's return first, the public's last, and the party that gets paid first doing the sums. A promise of profit is not money. It is a reason not to give you any.
Near the end of that Who gig, the lights went blue, and they played Won't Get Fooled Again, and 20,000 of us sang it at full voice on 170 acres of former public land, which I would call heavy-handed if I read it in a script.
We had all paid at the door, and the money was already being divided: the operator, the leaseholder, the landowner, each paid in full at a price both sides had agreed on. The hands that cleaned the soil, dug the Tube line and built the tent took a promise instead. 24 years on, the promise is the only thing in the building that has never been paid out.
See you on the next one.
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