Manchester United are set to use debt to help finance the construction of a new 100,000-seater stadium, despite the club already carrying £1.3 billion in existing debt. The club moved a step closer to the project on Thursday, revealing that the new ground will be built on land 350 metres from the current Old Trafford site as part of a wider regeneration plan.
Revenue Generation and Debt Rationale
Collette Roche, the club's chief operating officer for stadium development, cautioned supporters against becoming 'over-obsessed' with debt, arguing that the stadium will eventually pay for itself through increased revenue. 'What you've got to remember is through building a stadium of 100,000 seats, where it's football first, and we deliver all our matches, but then in and around the matches, we do other stuff. People come, they stay for longer, we'll have other facilities, other experiences. That's going to generate a lot more revenue,' Roche said.
'The revenue that's going to be generated, where does that go? That'll go back into the club, that goes back into the team, that goes back into growing our football. So as far as I'm concerned, whilst we can get over-obsessed with debt and borrowing, there's no stadium, I don't think, where you would not have some form of borrowing. We just need to make sure it's sensible and that it generates income and obviously money for the future of the club and doesn't distract from what we're here for, which is winning competitions, winning trophies, winning matches.'
Funding Options and Cost Uncertainty
United insist 'all funding options' remain available, including debt, equity, opening the project to investors, and selling shares. Roche noted there have been 'a lot of approaches' from interested parties. However, the final cost remains unclear. The £2 billion estimate given by chief executive Omar Berrada last March is no longer certain, given global economic volatility.
'That is the £2billion question, isn't it really?' said Roche. 'We don't know, is the answer, because obviously different stadiums have been built, we can look at what other stadiums have cost. You look at Everton, we can look at some of the ones further afield. But we're going to be building a very different stadium. It's going to be bigger than any other. It's 100,000 seats, nobody's done that. It's going to be done a bit further in the future, it's going to be done with these guys. So there's not a price, I can't go and get a quote on this right now.'
Roche emphasised the project must be a 'sanity project, not a vanity project,' reflecting the club's new focus on cost control.
No Public Funding for Stadium Construction
One funding avenue ruled out is public money for the stadium itself. While United and Trafford Council are working together to access funds for infrastructure, Roche confirmed no taxpayer money will be used to build the stadium. 'That's not something that we ever really wanted to or thought about doing,' she said. 'I think we as a football club need to stand on our own two feet and we need to pay for our stadium for a whole host of reasons. However, what you've seen today is massive; it's a lot more and a lot bigger than a stadium. So what we can't do is to pay for a new train station or new infrastructure because we won't have the funds for that, our funds will go on the stadium.'
Naming Rights and Fan Consultation
Selling naming rights is on the table as a revenue stream. 'I really don't know what the stadium will be called,' Roche said. 'What I will say is, and we've been really vocal, we are going to potentially look at naming rights for the stadium. It's an important revenue stream, it's something we've discussed with our Fans' Advisory Board and I think everybody realises affordable, accessible ticket prices are really important, and in order to do that, we do need to generate revenue streams in other places as well to build the stadium that everyone's said is going to be really expensive.'
United will now launch a consultation with supporters, with the design expected to be finalised towards the end of this year and costings drawn up. 'We've gone so far, part of it is around the masterplan,' said Roche. 'So now we've worked with the local council to say we are going to build a new stadium, so we're really committed to doing it. I think all of the other things are important, but we've got to make this work, right? We can't just abandon it. We're looking at making sure it happens, not will it happen or should it happen. The train's left the station and we just need to make it happen now.'
