Olympic Stadium to lose £123 million by 2025

Campaign group renews call for a fair deal for the taxpayer

The Olympic Stadium Coalition – a campaigning group of football supporter organisations – has condemned the terms of the deal that rents the London Stadium to West Ham and called for a fair deal for the taxpayer. The Coalition’s research shows that between this year and 2024/25 the Stadium will see operating losses of £123m. These losses will be borne by the taxpayer. The report has been published on their website, alongside a more detailed breakdown of the calculations.

This is significantly worse than previously reported figures.

Richard Hunt of the Olympic Stadium Coalition said: “There is no plan to repay these losses. We believe the Concession Agreement with West Ham United is a licence to rip-off the taxpayer. The Coalition has always argued for a fair deal for the taxpayer. It now becomes a matter of critical urgency to London that a solution is worked out.”

The Coalition believes there are commonsense solutions to the problem, requiring corporate responsibility from West Ham and flexibility from the London Legacy Development Corporation.

The Coalition looked at the report of the Inquiry into the stadium’s finances by forensic accountants Moore Stephens on behalf of London Mayor Sadiq Khan. Through this the coalition identified the sources of the losses – and solutions.

The stadium losses are incurred by its operator E20 LLC, which is owned by the London Legacy Development Corporation. This means the losses are a drain on public finances.

Richard Hunt said: “Despite assurances from the then London Mayor Boris Johnson, E20 has traded at a loss from day one. The last trading year saw losses of £20m and current projections, based on figures in the Moore Stephens report, indicate losses of between £12- £15m each year. These losses must be recovered from elsewhere in the GLA budget, which is already under pressure to fund the services London needs”.

In a paper prepared for GLA members the Coalition proposes a framework for a new agreement between West Ham and the LLDC. This includes:

abandoning the retractable seats – which cost £12m to operate last year. These were not required by West Ham in its initial stadium proposal. Even without them, the overall capacity would still be increased to 61,000 if, as a quid pro quo, the LLDC brought 9,000 extra seats, currently unused, in the upper part of the stadium into use. The Moore Stephens report details how removal and re-installation of the retractable seating was budgeted to cost £300,000 per year. The LLDC reported to the GLA Budget and Performance Committee on 27 Sept. that the annual cost has now been reduced to £4.1m p.a, but no further cost reduction is imminent.

allow West Ham to take over responsibility for seeking a stadium naming rights deal. The E20 budget relied upon this to bring in £4.5m each year (far more than West Ham’s rent) but no such revenue is in sight. West Ham has the expertise to negotiate a good deal, but the club should only benefit financially if it contributes more in other ways, such as…

a fair rent. As a benchmark, Manchester City pay £4m per annum for the Etihad Stadium and in addition pay all matchday overheads. Half of West Ham’s annual rent of £2.5m, is swallowed up by matchday overhead costs. The rental payments are currently estimated to cover only 23% of the cost of running the Stadium to 2025.

Richard Hunt said: “Having already shouldered nearly all the burden of re-configuring the Stadium for football use, the London taxpayer is being asked to pay eye-watering running costs on behalf of a single rich Premier League football club.”

“That situation is simply untenable. As good corporate citizens, West Ham should surely recognise their duty to sit down with the LLDC and re-work the agreement so that the club shoulders a fair share of the burden. Unfortunately at present this is not West Ham’s approach. It is taking the LLDC to court in November over who should pay for a further 9,000 seats in the Stadium which West Ham want to use. Whatever the result, the taxpayer will have to fund the LLDC’s legal bills for this action. The total cost of legal disputes between the LLDC and West Ham will rise to £4m with this latest action”

The scale of the losses uncovered by the meticulous Moore Stephens report has shocked even the Coalition members, who had already been warning that E20’s business plan was far too optimistic.

Olympic Stadium legacy: West Ham must pay their fair share

The Olympic Stadium Coalition believe the arguments for West Ham to pay its fair share of share of costs at the Olympic stadium become more overwhelming with every new report and discussion on the stadium and its mounting financial problems.

Redevelopment of the stadium was paid for by the taxpayer after the Olympics and the bulk of the costs are today borne by the taxpayer through the London Legacy Development Corporation (LLDC).

According to The Times, yesterday (21 March), David Edmonds, the former chairman of the LLDC, admitted to a Greater London Assembly committee meeting that the LLDC had given in to West Ham in negotiating the agreement for the club to use the stadium. The LLDC was negotiating only with them and made “compromises”. Those compromises meant a deal signed off by the then Mayor Boris Johnson in which the taxpayer is paying to support West Ham at the stadium.

A £140 million loss for the LDDC over the next ten years is predicted. West Ham pays just £2.5 million a year to use the stadium.

Rather than facing up to paying its fair share of costs, West Ham have launched legal action over who should pick up the bill for beer and TV; providing draught beer, Sky TV on all TVs in the stadium (the LLDC receives advertising revenue from some of the televisions) and hospitality staff in the corporate boxes. These are all things that other football clubs routinely pay for themselves.

By launching legal action, the owners of West Ham are adding to costs for the taxpayer. West Ham is already taking the LLDC to court over the number of seats at the stadium and, according to the Daily Telegraph legal costs for both sides in that case has hit £2m and could end up being triple that, once it reaches the High Court in November.

West Ham want to increase seating from 57,000 (itself an increase on the initial agreement) to 66,000. This would be worth millions to them in increased income and they are claiming loss of income if they cannot use them. The LLDC argues that the taxpayer – who paid for the transformation of the stadium so that it can be used by a profitable Premier League club – is entitled to a share of that money.

The coalition – made up of 14 football supporters trusts and groups – believes the mistakes made by the LLDC and the then Mayor in agreeing the terms of the deal with West Ham are clear; it is time for West Ham to demonstrate good corporate London citizenship, drop all legal action and demonstrate goodwill in resolving the financial issues of the stadium.