The search for a naming rights sponsor for Premier League club West Ham United’s London Stadium has cost UK taxpayers nearly UK£450,000, according to BBC Sport’s Frank Keogh.
The 66,000-seater venue’s owner, the London Legacy Development Corporation (LLDC), has been criticised for wasting money in the process, with two agencies reportedly having been paid a total of UK£447,000 to try and source a naming rights partner.
IMG netted UK£260,000 after being hired by the LLDC in 2013, while ESP was paid UK£187,000 when it was retained by LLDC’s subsidiary E20 for 16 months from March 2015.
Two potential naming rights deals with telecoms company Vodafone and Indian conglomerate Mahindra have collapsed, and no other discussions are currently in place. The BBC sponsorship expert also said that it could now take years to pin down an agreement.
"Two deals with global brands came close to being delivered but this is an extremely competitive and narrow market which requires significant time and effort to identify the appropriate brands able to enter into such major commercial deals," said a LLDC spokesman.
West Ham’s move to the stadium, which was built for the London Olympics in 2012, was riddled with controversy after it was revealed that the top-flight English soccer side pays UK£2.5 million annual rent with taxpayers footing the bill for certain running costs such as stewarding, goalposts, corner flags, cleaners and turnstile operators.
The venue itself has been dogged by financial losses, some of which would have been offset by a naming rights partner. Post-Olympic conversion for West Ham’s arrival in 2016 cost UK£323 million despite an original estimate of UK£190 million. The stadium is also expected to lose UK£140 million over the next ten years.
The stadium’s financial crisis led to London mayor Sadiq Khan taking control of the venue in December after a report revealed that it was losing about UK£20 million a year.
"It's a tough sell. Unless they drop the price, if the situation remains as it is, it could remain unsold for years," said sponsorship adviser Tim Crow, speaking to the BBC. "UK sports sponsorship is the softest it's been for a long time, mainly because of Brexit. Business hates uncertainty and if you're asking someone for a long-term sponsorship, it's no good.”
"I'm not surprised at all they were unable to find a buyer. The focus should have been on getting sport and entertainment events all year round to make it much more attractive to a potential sponsor."
Global valuation advisor Duff & Phelps has suggested that a naming rights deal for the stadium could bring in at least UK£4.8 million annually.
"A naming rights deal is an important element of the long-term success of the London Stadium and E20 has taken some of the best advice available to help secure a sponsor,” added the LLDC spokesman.
"We have worked hard to promote the London Stadium as a multi-use venue and our experience to date is that this is very appealing to potential sponsors."