Indian automobile major and business conglomerate Mahindra Group was engaged in talks for the West Ham United stadium naming rights. However, the deal did not materialise. The Premier League club has failed to find a naming rights partner in spite of spending a reported £450,000.
The club’s agents were reportedly engaged in talks with the Mahindra Group and telecom company Vodafone for a potential naming rights deal. The discussions ended inconclusively. West Ham agents have confirmed.
Premier League club West Ham United has drawn criticism and flak for irrationally spending large sums of money in the quest for naming rights sponsor for its London Stadium. The English club, according to a BBC Sport report, has allegedly spent around £450,000 in the search for a naming rights sponsor for their home ground. London Legacy Development Corporation (LLDC), the owner of the 66,000 capacity stadium, has reportedly paid a total of £447,000 to two agencies – IMG and ESP – to launch a hunt for a naming rights partner.
IMG was paid £260,000 after being hired by the LLDC in 2013, while ESP netted £187,000 when it was retained by LLDC’s subsidiary E20 for 16 months from March 2015. The agencies were engaged in talks with the Mahindra Group and Vodafone.
“Two deals with global brands (the Mahindra Group and Vodafone) 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,” LLDC spokesman was quoted as saying.
West Ham’s move to the stadium, which was a venue for London Olympics in 2012, has been marred with controversy after it was revealed that the club pays £2.5 million annual rent with taxpayers money being used for certain running costs such as stewarding, goalposts, corner flags, cleaners and turnstile operators.
The venue has triggered a chain of financial upsets over the years and was one of the reasons to get a naming rights partner that would help offset some of its losses. Post-Olympic conversion for West Ham’s arrival in 2016 cost £323 million despite an original estimate of £190 million. The stadium is also expected to lose £140 million over the next ten years.
The stadium’s financial crisis led to London mayor Sadiq Khan taking control of the venue in December after a report revealed that it was losing about £20 million a year.
“It’s a tough sell. Unless they drop the price, if the situation remains as it is, it could remain unsold for years. 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,” BBC has quoted sponsorship expert and adviser Tim Crow as saying.
“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.”
Duff & Phelps has suggested that a naming rights deal for the stadium could bring in at least £4.8 million annually.
“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,” added 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.”