Major London Stadium news has emerged and it means fresh start for West Ham but comes with risk says a leading football finance expert.
One of the key issues West Ham fans had with the club’s move to London Stadium in 2016 was the fact they no longer owned their home ground.
West Ham are instead anchor tenants at the former Olympic Stadium having signed up to a 99-year lease described by some as the ‘deal of the century’.
It doesn’t feel like that for some Hammers fans who simply have not taken to their new surroundings.
West Ham have made minor changes to the stadium to appease disgruntled supporters over the last eight years.
However, the gaps between the upper and lower tiers and from the stands to the pitch is a major bone of contention. They are also a source of derision from fans of rival Premier League clubs.
Particularly given West Ham originally promised fans a world class retractable seating solution.
The nature of the bowl-shaped arena means significant works would need to be undertaken to transform the London Stadium into a bona fide top class football stadium.
Claims the Hammers could buy or take control of the ground, redevelop it and land a lucrative naming rights deal have proved false dawns so far.
It was revealed back in August, though, that West Ham may finally get full control of the stadium like Man City have at the Etihad.
Major London Stadium news means fresh start for West Ham
From April 2025 the London Stadium will no longer be owned or operated by the London Legacy Development Corporation (LLDC) which will be under new leadership.
As reported by West Ham insider Sean Whetstone yesterday, it opens up the very real possibility of a new long lease for West Ham at London stadium.
And that would allow West Ham full control and the ability to run and manage the stadium similarly to Manchester City and the Etihad – opening up revenue streams including naming rights, catering and sponsorship.
Hammers News has spoken exclusively to Adam Williams, GRV Media’s Head of Football Finance and Governance Content, about what it could mean in real terms for the club.
The major London Stadium news means a fresh start for West Ham but comes with risk says the finance expert.
“I think this will be a welcome fresh start as far as both parties are concerned,” Williams told Hammers News.
“The relationship between West Ham and the London Stadium overseers has been frosty at its best and downright hostile at its worst.
“If they can secure a long lease similar to Man City’s, I think it would be a sound deal but it is also a case of weighing up whether the opportunity costs.
“The documentation I’ve seen shows that City pay about £5.5m per year, or at least they did a couple of years ago. It will have risen with inflation. The structure of that arrangement means City have been able to do a naming rights deal with Etihad, expand the stadium, and generally optimise their venue commercially.
“The question for West Ham is, would taking full control of the London Stadium generate ample revenue to cover the costs associated with being its caretaker?
Full control for Hammers comes with risk says finance expert
“For context, the stadium costs the landlords about £16m to run and maintain last year. You could get a few million from a naming rights deal, maybe another few million from events like concerts or conferences, and then perhaps other efficiencies could drive down costs.
“But I think the margins are tight and I personally would be surprised if they chose this option given the risk involved. In terms of naming rights, the value has diminished since 2016.
“But West Ham will take heart from two recent naming rights deals – Riyadh Air’s partnership with Atletico Madrid’s Metropolitano Stadium and England Rugby’s deal with Allianz for Twickenham.
“They fetched £230m and £100m over the next 10 years respectively, which is well, well over what most analysts thought they would get given that both stadia have gone by different names in the past, which historically has seen the value dwindle.
“Allianz were linked with London Stadium naming rights earlier this year.
“With the first £4m of any naming rights deal as it stands going to LLDC and the rest split 50-50 with West Ham, there wasn’t much reason for Hammers to get excited about that deal financially speaking.
“In any case, I think the fact they now have a London venue in Twickenham rules them out.
“The mood music at the moment is that the most likely sponsor would be a tech company or a sovereign wealth fund-backed institution.
“With the Betway sponsorship coming to an end soon, there is also the opportunity to tie in the front-of-shirt rights with a naming rights deal. Karren Brady has said that would be the best kind of deal for the club.
“But I think any real value coming from a naming rights deal would be contingent on a long lease for the stadium.”
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