- LLDC says stadium will remain a burden on taxpayers
- West Ham reportedly make clear nothing is off the table regarding venue
English top-flight soccer club West Ham United are open to turning their rental of the London Stadium into a permanent purchase.
The Premier League outfit have been playing at the venue, which was the centrepiece of the London 2012 Olympic and Paralympic Games, since 2016 after striking a 99-year lease. As part of the initial deal, the Hammers paid UK£15 million (US$18.5 million) towards the overall conversion of the stadium into a dual-use arena, plus a basic rent of UK£2.5 million (US$3.1 million) per year.
However, the amount needed to convert the venue into a multi-purpose site would soar to UK£323 million (US$397 million), which was largely covered by the taxpayer.
Lyn Garner, chief executive of the London Legacy Development Corporation (LLDC), which partly owns the ground, claimed in 2018 that West Ham’s rent “does not cover the cost” of staging matches at the venue and that “a lack of commercialisation” means the organisation faces “losses for the next 97 years”.
The LLDC has since admitted that the London Stadium will remain a burden on taxpayers, even if a naming rights deal for the venue is signed, and will continue to operate at a deficit.
In addition, The Times reports that the UK£200 million (US$246 million) figure provided in the LLDC’s accounts to cover future losses related to the stadium has been challenged by auditors and that the amount could increase “significantly”.
Garner told the London Assembly this month she was “very confident” that the LLDC would finally agree a naming rights deal for the venue this year. Even so, the pact would only reduce, not eradicate, the deficit.
According to The Times, LLDC subsidiary E20 Stadium Group, which operates the London Stadium, made a UK£31.1 million (US$38.3 million) loss in the year ending 31st March 2022. Gartner added that a naming rights agreement would still leave an annual operations loss of UK£8 million (US$9.8 million) to UK£10 million (US$12.3 million) for the venue.
All this could lead to more pressure to open talks with West Ham about buying the stadium. According to The Times, the club has made clear that ‘nothing is off the table’, including taking over the ground completely. Czech businessman Daniel Kretinsky, who took a 27 per cent stake in the Hammers in November 2021 and could complete a full takeover, is reportedly open to a deal for the London Stadium.
The taxpayer continues to fund the loss-making London 2012 venue and the relationship between the LLDC and West Ham has been strained.
It’s undeniable the club got itself a heck of a deal for the stadium lease. Though payments rose to UK£3.6 million (US$4.4 million) a year last season, The Times notes that the Hammers still do not have to pay for heating, cleaning, maintenance or even the cost of goalposts and corner flags. They also keep all the ticket money.
There would be an element of LLDC cutting its losses should it sell the venue to West Ham, especially since Garner said the current contract means the London Stadium will carry on seeing “year-on-year operational deficits”.
A sale would also relieve the burden on the capital’s taxpayers but there are several other moving parts to this. Notably, any arrangement would likely have to include compensation to UK Athletics, which has used the stadium as its home since 2015.