German insurance and financial services giant Allianz is in pole position to end the long-running search for a naming sponsor for the London Stadium, the main venue for the London 2012 Olympics and the current home of Premier League side West Ham United, SportBusiness can exclusively reveal.
The company is understood to be in advanced discussions with the London Legacy Development Corporation (LLDC), the commercial rights owner for the Queen Elizabeth Olympic Park in East London, and is close to agreeing an expansive sponsorship deal that encompasses the naming rights to the multi-event arena, as well as the wider 560-acre park that hosted the 2012 Games.
SportBusiness understands the insurance firm is competing with Maryland-based ticketing firm Stage Front for the rights to brand the London Stadium, but the latter firm is not interested in sponsoring the wider Olympic Park. A third brand is also understood to have expressed an interest in sponsoring the park but is thought the least likely to conclude a deal.
An agreement with Allianz would add to the insurance giant’s already substantial portfolio of stadium naming deals which includes pacts with Bayern Munich, Juventus, OGC Nice and Minnesota United FC.
As reported by SportBusiness, the brand tabled an ‘opportunistic’ £20m ($24.8m)-per-year offer for Chelsea FC’s front-of-shirt sponsorship rights earlier this year that was never likely to be sufficient to tie down an agreement.
Its sudden appetite for a significant sponsorship asset in the UK is thought to be related to the appointment of Serge Raffard as managing director of Allianz UK’s personal lines division this June. The firm restructured its UK operations to create distinct commercial and personal insurance businesses following the acquisition of LV Insurance Group and Legal and General in 2020. Raffard previously served as group strategy, marketing and distribution officer for the firm and has a remit to focus on customer and staff engagement in the new role.
Ticketing and hospitality firm Stage Front also has a proven appetite for stadium naming rights deals having announced an agreement with Spanish Segunda División side RCD Espanyol this June that included a commitment to transform the matchday experience at the venue. The firm first entered Spanish football through a partnership with the Spanish top flight’s regional arm, LaLiga North America, and this week announced a second-tier ‘Official Partner’ deal with the Spanish Football Federation (RFEF).
Long-running search
A successful conclusion to the well-publicised and long-running search for a naming rights sponsor for the stadium would help to offset some of the substantial unbudgeted costs of converting the seating in the venue for use by long-term tenant, West Ham. Cost escalations arose out of the need to extend the roof to meet Uefa requirements for all seats to be covered and the need for pitch-side seats to be retractable so the venue could continue to host athletics events as part of a 50-year deal with UK Athletics to deliver a legacy for the sport after the Olympics.
An independent review published by accounting firm Moore Global in 2017 revealed a total cost of £323m to convert the stadium, exceeding the estimated transformation budget by £133m. The same analysis predicted a cumulative forecast deficit in excess of £140m for the venue over the next 10 years, placing a substantial burden on UK taxpayers.
Under the controversial 99-year concession agreement signed with West Ham in March 2013, the London club agreed to make an upfront payment of £15m to the LLDC from the sale of its former Boleyn Ground and a further £2.5m per annum to rent the stadium over the life of the contract. Performance-related payments could see the rental income increase by up to £760,000 per year, while relegation to a lower division would see the sum drop to £1.25m per year.
The club has played Premier League football at the stadium since 2016.
The LLDC’s displeasure with the financial terms of the agreement was revealed when it launched a £12m claim against its former law firm Allen & Overy alleging it was negligent in the drafting of the contract. The LLDC reached an out-of-court settlement with the legal firm last year, the terms of which remain confidential.
West Ham share
The 2017 Moore Group review into the stadium contract revealed the LLDC is entitled to keep the first £4m of any naming rights sponsorship deal for the stadium, sharing anything above this figure 50:50 with the Premier League side. West Ham’s share is capped at the team’s annual stadium usage fee, unless any increase in the value of the sponsorship deal is clearly attributable to club’s on-field performance.
Outside of this, LLDC would stand to retain all of the sponsorship income generated by the wider Olympic Park, meaning the more expansive sponsorship deal with Allianz is likely to be its preferred option.
Last year, LLDC chief executive Lyn Garner indicated the organisation would be happy for West Ham to pursue a naming rights deal for the London Stadium if the club were prepared to buy out the rights for £4m a year. But SportBusiness understands the club never responded to the offer.
This means the Premier League team has had to take a back seat in negotiations with the three brands, although it is unlikely to object to a deal with a blue-chip brand like Allianz, or an established sponsor like Stage Front. The perception is that a lack of input in the process is the price the club has to pay for such a favourable stadium leasing deal.
Telecoms firm Vodafone and IT services company Tech Mahindra were previously reported to have been interested in sponsoring the London Stadium but both deals ultimately collapsed.
Sponsorship reboot
Should the LLDC get an agreement over the line, it will represent a feather in the cap for chief commercial officer Nathan Homer who was brought on board in 2020 to reboot the sponsorship offering for the Queen Elizabeth Olympic Park.
Before taking the role, Homer served as sports marketing director for the Barclays banking group and consumer goods brand Proctor & Gamble and was the chief commercial and marketing officer for golf’s European Tour between 2016 and 2019.
In March 2022, the LLDC also enlisted the help of the CSM Sport & Entertainment agency to help shape a new commercial proposition for the park. The agency is understood to have introduced at least one of the three interested brands to the LLDC but is not being retained to sell the sponsorship rights.
In an interview with SportBusiness to coincide with the tenth anniversary of London’s hosting of the Olympics, Homer said the LLDC was looking to bring a broader array of assets into its sponsorship offering to create a more brand-friendly proposition. This included leveraging the London Olympic Park’s status as a community hub, business centre and cultural district, alongside its position as a sports event host, to deliver more bespoke, purpose-driven sponsorship packages for brands.
He said: “There are naming rights for the stadium and some of the other venues, there are tickets, there’s hospitality, there’s databases, there’s content, a lot of the classic stuff, but there’s so much other activity that goes on at the park that chimes well with what you hear a lot of businesses and brands say really matters to them.”
Tenants within the park include humanitarian agency Unicef as well as educational establishments like Loughborough University London, UCL, and Staffordshire University. In 2021, the park also announced plans to become an esports hub and recently opened a new cultural quarter featuring a Sadler’s Wells dance studio and a new branch of the Victoria and Albert Museum. A BBC Music studio will open in the district in 2025.
As well as hosting athletics meets and West Ham home fixtures, the venue also stages the London Series of regular season Major League Baseball matches.
Homer said in the earlier interview: “There are so many aspects and narratives within the park story that we can put into a proposition for people alongside some of the things that still matter, like the ability to attract eyeballs and to have tangible assets such as tickets and hospitality.”
When SportBusiness approached LLDC for comment, a spokesperson said: “We are pleased that the revised sponsorship proposition has been well received in the market, but we can’t comment on any specific discussions.”