Manchester United could be plunged almost £1billion into debt by the plan to redevelop Old Trafford.
Chief executive Richard Arnold’s confession to fans last week that he is struggling to find the cash to haul United’s historic home into the 21st century has opened up the prospect of their American owners taking out a mortgage on the ground they have owned for 112 years.
One other option would be to sell the naming rights to the stadium - as Barcelona have done recently with the Nou Camp - but that would cause uproar with the more militant members of United’s huge support. United, debt-free when the late Malcolm Glazer and his family implemented a leveraged buy-out in 2005, are currently £500million in the red.
And with estimates to rebuild the Sir Bobby Charlton Stand coming in at around £300million, the final bill to renovate the entire stadium and improve the club’s Carrington training ground will be huge. Architects Populous and management consultants Legends International have been tasked with a project that would take capacity to 88,000. The ambitious construction is made even more complicated by a railway line that runs behind the main stand.
Ironically, the Glazers have stripped more than over £1.2billion from the club in dividend and debt payments during their reign. They paid out £11million in dividends on Friday - with most of that cash being trousered by the six Glazer siblings. And after presiding over a decade of failure since Sir Alex Ferguson’s retirement, the Glazers have allowed Old Trafford to fall into a shameful state of disrepair. Arnold insisted that money isn’t an issue for new manager Erik ten Hag to recruit new players this summer after the Dutchman agreed to become United’s fifth boss in nine years.
Arnold admitted that United have squandered £1billion in the transfer market since Ferguson’s retirement. So the club’s reluctance to spend beyond the valuations they have set for players is understandable. But the chief executive’s revelation that he is struggling to find the finance to modernise the stadium will crank up the worries of supporters that cash needed for new players will be redirected elsewhere despite continuing to generate huge revenues.
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Arnold said: “For the future, for investing in a new stadium and a latest-and-greatest training ground we’ve got to do something. We’ve got to get investors in. “I need that to do what I want for the club. I’ve got to have more cash now because no club in the world has the money to build a new stadium. You either borrow it or invest it. The money has got to come from somewhere.”
The Glazers remain adamant that they have no plans to cash in on United by putting the club up for sale. A slump in United’s share-price has seen around £1.3billion wiped off the value of the club in the New York Stock Exchange. But the sale of Chelsea has just raised £4.2million despite the London club requiring another £2billion investment to build a new stadium.
Those figures did raise some eyebrows in the corridors of power at Old Trafford. But the Glazers know they can continue to cash in on huge dividend payments and that there would be no shortage of buyers ready to meet their asking price should they put the club on the open market. Selling the naming rights to Old Trafford would be a lucrative but controversial move.
Barcelona, who are being strangled by debts of £1.1billion, have just signed a four-year deal with audio streaming service Spotify that will net them £250million for kit sponsorship and a stadium rebrand of the Nou Camp. United’s owners may feel that taking on more debt is their best option with interest rates still relatively low. As one expert in football finance observed: “It would not be a good look for the biggest club in the country to owe a billion. But PR has never been at the forefront of the Glazer family’s vision for United.”
