The departure of London Legacy Development Corporation (LLDC) chairman Lord Peter Hendy and CEO Lyn Garner at the end of this year presents an opportunity for West Ham to begin negotiating a long-term lease for the London Stadium.

New opportunities?

Securing a new agreement before the London mayoral elections seemed unlikely, but now, following the election results, Sadiq Khan may be open to a deal with the Hammers that could save London taxpayers millions of pounds. This year, LLDC is set to be reduced, transferring its planning and development powers to local London borough councils.

LLDC's Planning Policy and Decisions Team (PPDT) will cease to act as the local planning authority for the LLDC area from midnight on November 30, 2024, handing planning powers over to London's local councils.

© sbally1

Rising maintenance costs…

The club still has 88 years remaining on the 99-year lease agreement signed in 2013. Currently, West Ham pays £4 million annually for the rental of the London Stadium, but they could potentially demand greater control for a higher fee. Local tax costs are estimated at £2 million, with an additional £2 million for utilities (electricity, gas, water); relocating staff cost an additional £4 million, and salaries for permanent staff amount to £3.5 million.

According to London Stadium 185, annual operational costs for the facility total around £16 million, with an additional £4.5 million allocated to maintenance, security, cleaning, catering, and upkeep. Therefore, West Ham would need to generate sufficient income to cover a £12 million gap compared to the current lease amount. Potential efficiencies and savings are possible, but the real challenge lies in generating additional revenue through naming rights sales, sponsorship agreements, and hosting concerts.

© Adam Somlo

...and property value declines

According to LLDC's financial report published in May 2024, the current valuation of the London Stadium is £910,000, marking a decline from £1.5 million previously. Interestingly, the value of the multi-level parking has increased from £4.5 million the previous year to £6.9 million.

This certainly mocks the narrative of the facility being valued close to a billion pounds, but it is intriguing considering West Ham's interest in taking over management of the venue. Despite events such as Major League Baseball matches, the London Stadium has never approached profitability, which may explain its low valuation.

The property's value is declining, and managing it becomes increasingly costly and demanding. West Ham faces the challenge of finding ways to increase revenues in order to manage the London Stadium effectively and profitably.