London Stadium: Search for sponsor of West Ham's home costs nearly £450,000
- Published
West Ham moved to the former Olympic Stadium from Upton Park in 2016
Nearly £450,000 of taxpayers' money has been spent trying to find a sponsor for West Ham's London Stadium home but a backer is still being sought.
The stadium's owner, the London Legacy Development Corporation (LLDC), has been accused of wasting cash in its search for a naming rights partner.
A sponsorship expert says it could take years to secure a deal.
Two companies have been paid a total of £447,000 to try to find a naming rights partner, the BBC has learned.
But after two potential deals collapsed, no discussions are currently taking place.
The stadium, built for the London Olympics in 2012, has been dogged by controversy over its finances. Converting it into a football ground cost £323m when the original estimate was £190m.
The verdict on West Ham’s stadium move
Although West Ham pay an annual rent of £2.5m as tenants, the venue is still set to lose £140m over the next 10 years. Any sponsorship would offset some of those losses.
Telecoms company Vodafone pulled out of a £20m six-year naming rights deal in May 2017, while Indian conglomerate Mahindra had earlier shown interest.
"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.
The first £4m a year of any deal would go to the corporation, with West Ham sharing any revenue above that.
Two agencies with expertise in attracting sponsors have been used, with the hope that revenue would dwarf their costs.
IMG was paid £260,000 after being hired by the LLDC in 2013. Then ESP was given £187,000 when retained by LLDC's subsidiary company E20 for 16 months from March 2015.
Gareth Bacon, chairman of the London Assembly's budget and performance committee, said he was "mystified" by the failure to secure a suitable sponsor.
"It's taxpayers' money that has been wasted. When you pay that kind of money and get absolutely nothing in return, that's not great," said Bacon, the Conservatives' leader on the assembly.
"There is a Premier League club playing in the stadium which held the most successful Olympic Games ever, in a major European country."
The Rolling Stones performed at the stadium in May
In December, London mayor Sadiq Khan announced he was taking control of the stadium after a report established it was losing about £20m a year.
Research by global valuation advisor Duff & Phelps has suggested naming rights for the venue could fetch at least £4.8m annually.
But leading sponsorship adviser Tim Crow, who has been involved in numerous stadium rights deals, said more non-football events needed to be staged at the venue.
"It's a tough sell. Unless they drop the price, if the situation remains as it is, it could remain unsold for years," he said.
"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."
The World Athletics Championships and World Para-athletics Championships were staged at the stadium last year. Other events, including six sell-out concerts this summer, have been held although it is more difficult to do this during the football season.
"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, said 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."
It is understood West Ham, who are preparing for their third season at the stadium, have offered to help find a naming rights partner.
The Hammers were awarded a 99-year tenancy in 2013 and under the agreement do not have to pay for certain running costs such as stewarding, goalposts, corner flags, cleaners and turnstile operators.