WEST HAM’S landlords at the London Stadium are on the verge of going bust.
The Mayor of London and Newham Council will move heaven and earth to avoid the humiliation of the Hammers being locked out of their ground or made homeless. But the price of keeping E20 Stadium LLP out of administration is almost certain to be the investment of even more public money on top of the hundreds of millions already spent.
And athletics chiefs are worried the crisis could lead to their sport losing its annual right to stage events in the former Olympic Stadium, totally undermining the London 2012 legacy. Sources indicate there is no realistic prospect of persuading or forcing West Ham to increase their current annual rent of just £2.5m. But the generous terms of the Premier League strugglers’ 99-year lease are likely to come under renewed attack. The row was already due to go public again in the coming weeks with the publication of a report into why it cost £323m to convert the stadium - on top of the £429m spent on construction.
E20 Stadium LLP is a joint venture between the London Legacy Development Corporation – an offshoot of the Greater London Authority – and Newham Legacy Investments Ltd, a company controlled by the London Borough of Newham. They invested about £260m and £40m of public money respectively into the conversion costs, with West Ham providing £15m.
Current London mayor Sadiq Khan commissioned the report last year and is putting pressure on accountancy firm Moore Stephens to deliver their findings, which were due back in June. Khan will use the report as political ammunition to attack predecessor Boris Johnson over key decisions made about the stadium. But the review is also expected to lay bare the troubled finances of E20 and major stakeholders are already privately discussing the possibility of administration. The main issue is the annual £8m cost of converting West Ham’s football arena into a track and field venue and back again, in accordance with the separate 99-year deal signed with UK Athletics.
E20’s last accounts, for the year to March 31 2016, showed the stadium lost more than £9m through its day to day operations BEFORE West Ham took up residence in August 2016. As well as the £8m summer conversion costs, E20 is now also liable for other expenses related to the Hammers’ tenancy, from heating, lighting, policing, stewarding, cleaning and turnstile operators to the goalposts, net and corner flags. The failure to secure a naming rights deal is another factor in the current financial uncertainty surrounding a venue whose overall cost is well over £700m. Newham and GLA hoped to recoup their investment from E20’s profits, but there ARE no profits and no prospect of any under the current arrangements. All that public money would be at risk if E20 went into administration, so high-level discussions are now taking place to find a long-term solution. But West Ham coughing up more is unlikely to be it. Another approach would be to invest in adapting the stadium so it was quicker and cheaper to convert for athletics each summer.
The cost would depend on the method chosen, but a state-of-the-art system like the Stade de France’s would need about £100m and require West Ham to vacate the site for a while or face years of disruption while work was done on a stand-by-stand basis.
There are also degrees of possible compromise on athletics. The sport fears losing its annual presence in the iconic London 2012 venue altogether but other options are under consideration, such as partial summer conversion which would leave the East Stand seats undisturbed. A Newham Council spokesperson said: “We are working closely with the Mayor of London, the London Legacy Development Corporation and the E20 contractors to explore all potential solutions and improve the overall financial position of the stadium.”
An LLDC spokesman said: “The Mayor and officials are in discussions with the relevant parties and we will comment further when the Moore Stephens review has been published.”
From The Sun
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