A report by the LLDC Budget and Performance Committee on the London Stadium published earlier this year makes sombre reading suggesting the Stadium can never break even.
Despite the £760 million investment to build and then renovate the stadium after the London 2012 Olympics and a busy event schedule in pre-pandemic times, the stadium does not generate a
profit and is unlikely to ever do so.
As the Moore Stephens Olympic Stadium Review report made clear, in 2013 the LLDC ‘entered into an arrangement with West Ham United which, when implemented, generated substantial
losses (with no present prospect of significant improvement in the future)’. This was starkly highlighted by the fact that most of the in-year savings delivered by the LLDC have come from
reduced stadium activity during pandemic; it saves the LLDC money when it’s not running events.
Although 2019-20 was considered ‘one of the most intense periods of [event] activity the London Stadium has seen since re-opening’ the LLDC estimates that the ‘best [it] could hope for’ in coming years is that stadium makes a loss of £8 to £10 million per annum. Even this appears optimistic, given E20 lost £19.6 million in 2017-18, £27.6 million in 2018-1916 and £29.1 million in 2019-20.
The stadium cost £486 million to build and a further £274 million to renovate after the 2012 Olympics.
The London Stadium’s fair value was assessed to be £nil, attributable to the level of costs included in E20’s long-term forecasts.
Not only does the Stadium have no value, it would cost Londoners at least £200 million to own it. A 2016-17 assessment concluded that the E20’s lease agreement with West Ham United and
the Access Agreement with UK Athletics were ‘onerous’ (loss making). Accordingly, a provision remains in the LLDC accounts at £200 million should they want to buy out those contracts in theory.
So it would be of benefit to the taxpayers to pay someone to take the stadium off their hands up to say £150m.
If they paid us £150m to take it, I wonder how much it would cost to knock it down and rebuild it into a football ground.
Wouldn’t it be better for all parties concerned for West Ham to be bought out of the current contract using the £200m provision mentioned, which GSB could then use to build a properly-configured stadium for football? I can’t see the current level of loss-making being sustained by local government, when Covid is going to have to be paid for for decades to come.