London Stadium deal costs £19m annually

City Hall is facing an annual operating loss of around £19 million stemming from the long-term arrangement with West Ham United Football Club for the use of London Stadium. Officials revealed that the agreement, established in 2013, is set to last for 99 years and includes no provision for the Greater London Authority (GLA) to terminate the contract. This situation has been exacerbated by West Ham's relegation from the Premier League, which has resulted in the club paying less than half of the £4.6 million annual rent previously due.

Financial Strain and Contractual Limitations

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Lyn Garner, chair of London Stadium LLP, stated that the stadium's accounts are projected to finalise with an operating deficit of approximately £19 million. She described this level of loss as not unusual and consistent over recent years. While commercial deals and the number of summer events, such as concerts and Soccer Aid, have improved the financial picture in the current year, the reduction in rent following West Ham's relegation has offset these gains. Garner highlighted that the stadium management remains responsible for all overheads, repairs, and maintenance for the large venue.

“I would absolutely not sign the current deal in place if it was presented to the organisation now.”

Lyn Garner, chair of London Stadium LLP

Garner expressed that she would not agree to the current contract terms if they were being negotiated today. She noted that certain ambiguous aspects of the agreement have led to legal disagreements. The relationship with the football club has historically been strained due to differing interpretations of the contract. Garner acknowledged that the deal is highly favourable to West Ham United but stressed that the GLA must honour the existing commercial agreement due to the absence of any break clauses. She indicated a desire to renegotiate the entire arrangement, though she sees little prospect of this occurring.

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Strategies for Loss Mitigation

To address the estimated annual losses, Garner has outlined a five-point strategy. This includes exploring the possibility of West Ham Women relocating to London Stadium, with the club bearing the associated costs. Currently, the women's team plays at Dagenham & Redbridge's Chigwell Construction Stadium, and a dispute over contractual interaction and costs prevents them from using the main venue. The London Stadium LLP also aims to increase revenue by hosting more major concerts, similar to Tottenham Hotspur Stadium. However, Newham Council currently restricts the stadium to ten non-football events per year, significantly fewer than Tottenham's allowance of 50.

Further plans involve collaborating with the club on a series of September concerts, potentially requiring West Ham to play away fixtures to avoid disruption. Garner also suggested making the stadium environment more intimate, such as changing all seats to West Ham's claret colour, to enhance the fan experience. Additionally, there is potential for commercial development on the land surrounding the stadium, including food and beverage facilities and other leisure anchors. The sale of naming rights is considered a possibility, but only once the club returns to the Premier League, to secure a more favourable deal for the taxpayer.