West Ham United “continue to dispute” the amount of money they are required to pay the owners of their London Stadium home ground following the purchase of shares in the club by Czech businessman Daniel Kretinsky but have handed over more than the sum they initially agreed to, according to the stadium owners’ newly-published annual report and financial statements.
The financial report confirms that in August 2022 West Ham paid just under £2.6 million to E20 Stadium LLP, the company set up to own the venue, and also reveals that this took place eight months after the club was issued with a non-payment notice by E20. The notice was issued in December 2021, the month after the Kretinsky transaction took place.
The financial report says the £2.6 million payment was followed on 7 March this year by an unspecified “further payment”, but that the football club is still contesting it (extract below from page 24 of the financial report).
Earlier this month Lyn Garner, chief executive of the London Legacy Development Corporation (LLDC) which is a partner in E20 Stadium and has overall responsibility for the Queen Elizabeth Olympic Park in which the stadium stands, informed the London Assembly of a “continuing, significant financial and legal dispute that we currently have with the club”.
It has since been widely reported that West Ham and the LLDC are locked in a legal battle over payments in addition to the £2.6 million, but the financial report shows that despite this West Ham have felt obliged to hand over a further amount, which is likely to be substantial.
Kretinsky bought a 27 per cent share of West Ham, said to be worth around £170 million, making him the club’s second biggest shareholder and also triggering clauses in the complex concession agreement signed by E20 and West Ham in March 2013. These set out in detail sums the club would pay E20 Stadium in the event of significant changes of the club’s ownership structure and any increase in its value as a result of being based at the stadium. That element of the contract, which applied for ten years after it was signed, has just expired.
The new financial report on E20 refers to a “multi-faceted share transaction in WH Holdings Ltd in November 2021” and states that “on 1 August 2022 the Club paid E20 Stadium LLP £2,588,223, in full and final settlement of sums due in relation to the share transfers component of the transaction by relevant shareholders plus interest”. It continues: “On 7 March 2023, a further payment was made to E20 Stadium LLP in relation to other components of the transaction, though the Club continue to dispute this aspect of the matter.”
In the past the LLDC and West Ham have sought independent legal adjudication of disputes between them over the complex “concession agreement” made in March 2013, which made West Ham the primary tenant of the London Stadium. LLDC dissatisfaction with that agreement, which was made when the corporation was under different leadership, resulted in the LLDC suing law firm Allen & Overy for alleged negligence. An out-of-court settlement was reached last August.
The new financial report covers the financial year 2021/22 and would normally have been completed at the end of December. The LLDC says the delay is because auditors EY had to conduct an “intensive review” of what are termed E20’s two “onerous contracts” – meaning “loss-making” – with West Ham and with UK Athletics, which has use of the stadium during part of the summer.
The stadium continues to make an underlying operating loss put at £13.7 million in the year to 31 March 2022 (page 2), though Garner told the Assembly that savings have been made in the cost of moving the retractable seats to covert the stadium from football to athletics and other uses, as well as in electricity bills, suggesting the figure would otherwise have been somewhat higher.