By James Ducker and Jim White
London: Manchester United have announced plans for a stunning new 100,000-seat stadium, although chief executive Omar Berrada admitted the ambitious £2US billion project came with “a risk”.
United intend to demolish Old Trafford and build a new stadium as the centrepiece of a 260-acre regeneration project that co-owner Sir Jim Ratcliffe hopes will be to Manchester what the Eiffel Tower is to Paris.
Ratcliffe last year said he wanted to create a so-called “Wembley of the North”, referring to England’s national stadium in London and referred to the project as a “once-in-a-century” opportunity.
The club wants to be able to move into the new stadium – which would feature three giant masts and a sweeping steel and glass canopy – in time for the 2030-31 season.
The announcement was made on Tuesday, just 24 hours after Ratcliffe said United would have gone “bust by Christmas” but for the implementation of a huge cost-cutting drive that will claim up to 450 staff jobs. Berrada accepted that the cost of financing the project could affect the club’s ability to invest in the team.
Arsenal and Tottenham Hotspur experienced a similar situation after investing heavily in new stadiums and while Berrada admitted that was a risk he said he believed United could remain competitive while building their new home.
A computer-generated picture, issued by Manchester United, shows an exterior view of the planned new stadium.Credit: AP
“The big benefit this club has is that it has the biggest fan base in the world and therefore the ability to be the No.1 in terms of revenues that it generates,” Berrada said.
“We are trying to put ourselves in the best financial position to be able to invest in our team and make it better. We are not necessarily going to be investing significant amounts. But that is going to be out of choice because we want to manage our football costs more efficiently.
“Our No.1 goal is to get our teams winning and to get the men’s team competing for all the titles consistently. We are not going to deviate from that.”
Sir Alex Ferguson, who won 13 Premier League titles and two Champions Leagues as United manager and delivered many memorable, iconic moments at Old Trafford, backed the plans.
Aerial photo of the Old Trafford stadium, home of Manchester United. Credit: AP
“Manchester United should always strive for the best in everything it does, on and off the pitch, and that includes the stadium we play in,” Ferguson said. “Old Trafford holds so many special memories for me personally, but we must be brave and seize this opportunity to build a new home, fit for the future, where new history can be made.”
United believe the project could take five years and aims to start it this year, emboldened by government support.
Ratcliffe said: “It’s a bit more than a new stadium. It’s obvious that the more iconic or more extraordinary that the stadium is, the more successful the regeneration scheme will be. I think a really good example is the Eiffel Tower. Everybody around the world knows the Eiffel Tower and I’m sure that many people here who have visited Paris, you stay in a hotel, you go to the Eiffel Tower.
“We have one billion people around the world who follow Manchester United. They will all want to visit this stadium. You can see the design and take your own view on how iconic you think it is, but I think everybody in the world who is interested in Manchester United – and football – will want to come and visit this stadium.”
Fans of Manchester United enjoy a match at Old Trafford.Credit: Getty Images
Despite having the highest EBITDA (earnings before interest, taxes, depreciation and amortisation) of any club in Europe, United have lost £313 million in the past three seasons alone.
This is largely a consequence of calamitous recruitment and the cost of servicing the debt loaded on to the club by a hostile takeover in 2005, with £37 million spent in interest alone last season.
Asked if United would need to restructure their gross debts of £515.7 million, which excludes more than £300 million owed on transfers and £210 million drawn down from their revolving credit facility, Berrada said: “These are all options we will be looking at.”
Berrada said a new stadium could result in EBITDA (earnings before interest, taxes, depreciation and amortization), which is used to evaluate a company’s core performance and operating efficiency, soaring by up to £130 million annually.
“We’re a PLC so we have to be very careful about giving any revenue forecasts, but the initial business planning shows that we can increase our EBITDA significantly, potentially increase it by £120 million to £130 million,” he said.
United currently earns about £5 million per home game, but it is understood this could double at a new stadium with an additional 25,000 fans and vastly improved hospitality provision.
Berrada said there was the possibility of selling naming rights to a new stadium.
