Operating losses of London Stadium mount up

Budget estimations for the next four years for the London Legacy Development Corporation (LLDC) reveal that the public body is accounting for large operating losses for Stadium going forward.

The LLDC own 65% of the London Stadium through E20 Stadium LLP and the organisation released it’s budget plans for the next four years.

After spending £35.9m on the stadium in 2016/2017, the LLDC expect to contribute another £8.4m between 2017/2017 to cover losses of E20 Stadium LLP.  Between 2018/2019 they expect to chip in another £5.4m to support operating losses which they hope will drop to £5m in 2019/2020 and £4.8m in 2020/2021.

The £23.6m of extra funding over the next four years  by the public body controlled by the London Mayor is forecast to cover 65% of the losses of E20 Stadium LLP so you have to assume that Newham will contributing around £12.7m on top of that to bring total operating losses to around £36.3m

Commentary on the draft budget says:  “Costs for the stadium relate to LLDCs working capital contributions as a member of the E20 Stadium LLP partnership, based on a range of assumptions on operating costs and revenues, naming rights income and the cost of seat moves which are subject to review under the Mayor’s investigation”

Further adding: “Net stadium income has not been realised as costs are higher and income lower than anticipated in the start up phase of the stadium operation”

The LLDC Chairman, David Edmonds resigned In November last year  after it was revealed the cost of turning the Olympic Stadium into the London Stadium had risen from £272m to £323m. More recently the organisation has agreed a £30,000 search fee to an executive agency to find a replacement to Chair the LLDC .

In 2015 internal LLDC paperwork showed the LLDC expected to make a profit of  £200,000 in 2016-17 from all activity at the former Olympic Stadium. That will include not just from West Ham games but athletics events, concerts and probably some rugby and motor sport. At the time there was an outcry why the profit was so low but it would be beyond their wildest dreams. Their original business plan is now in tatters.

Yesterday we published analysis of published financial accounts of E20 Stadium and Newham Legacy Investments, today these budget forecast make equal sobre reading.

You can find the LLDC draft budget at http://www.queenelizabetholympicpark.co.uk/-/media/lldc-draft-budget-submission-201718.ashx?la=en