West Ham in London stadium legal battle

As they prepare to change managers and bring in Graham Potter, West Ham are facing an off the pitch problem in relation to the London Stadium.

The Hammers are involved in a complex court battle with their landlords over a payment of nearly £4million that they were forced to make after the Czech billionaire Daniel Kretinsky bought a 27 per cent stake in the club.

They appealed against an “expert determination” that they had to pay the money as part of their lease agreement with E20 Stadium, a subsidiary of the publicly-owned London Legacy Development Corporation (LLDC).

A High Court hearing took place last month — West Ham are contesting £3.95million of the £6.5million it paid in March 2023 under the stadium lease penalty clause. The court’s judgment is expected later in January. The clause was added to ensure that any added value West Ham’s owners benefited from after securing the lease would be reflected when they sold any shares.

The legal action has been revealed in E20’s annual report, which states: “West Ham United are in dispute with E20 Stadium over a sum paid by the club under the concession agreement in relation to a multi-faceted share transaction in November 2021. West Ham were ordered to pay E20 certain sums following an expert determination in which the expert found in favour of E20.

Kieran Maguire, the football finance guru, said a contingent liability is “a possible payment a company may have to make” — and that if they lose the legal action E20 could also be liable for West Ham’s costs.

The accounts also reveal the financial cost of the London Stadium to the capital’s taxpayers. E20 Stadium Group’s underlying loss for year ending March 31, 2024 was £14.3million and LLDC provided funding for amounting to £20.9 million.  West Ham paid rent of £4.4million — about half the £8.3million E20 paid out for installing solar panels in the roof and for routine maintenance.

The LLDC has still failed to secure a naming rights partner for the London Stadium despite budgeting for income from that stream of £2million.

The agreement struck by West Ham for the stadium in 2013 was described as the “deal of the century” with initial index-linked rent of £2.5million a year for 99 years. West Ham’s lease payments  rose to £4.4million last season but the club do not have to pay for heating, cleaning, maintenance or even the cost of goalposts and corner flags and keep all the ticket money.

About £2million was paid to the LLDC in an out-of-court settlement by the law firm that drew up the concession agreement.

The agreement contained a ten-year clause that expired in 2023, which meant the LLDC was due a fee for the sale of any stake in the club. West Ham paid an initial £2.6million fee after Kretinsky bought 27 per cent of the club for £169 million but LLDC claimed it should be much higher and won an expert determination for an extra £3.95 million, which led to a court challenge by the club.  The legal dispute may centre on whether the fee should be paid for new shares or only existing ones.