£1billion in the red Glazers have stripped over £1.2bn out of Old Trafford while steering club to £500m debt which could now DOUBLE as they plot spend on neglected stadium. On the bright side for United fans... the new boss starts tomorrow!
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 the club’s American owners taking out a mortgage on the ground United have occupied for 112 years.
Another option would be to sell the stadium’s naming rights – as Barcelona did recently with the Nou Camp – but that would cause uproar with the Red Devils’ 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 £300m, the final bill to renovate the stadium and improve the 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. But the construction is made even more complicated by a railway line that runs behind the main stand.
Ironically, the Glazers have stripped more than £1.2bn from the club in dividends and debt payments during their reign.
They paid out another £11m in dividends on Friday – with most of that cash 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 boss Erik ten Hag to recruit new players this summer. But they continue to haggle with Barca for Ten Hag’s No.1 target Frenkie de Jong. And Christian Eriksen has yet to be convinced that joining the Reds would be better for him than signing a new deal with Brentford.
Sources in Holland suggest Ten Hag has been surprised by the lack of progress made, given that the squad he inherited has already lost as host of stars including Paul Pogba, Juan Mata, Nemanja Matic and Jesse Lingard.
But chief executive Arnold’s revelation that he is struggling to find finance to modernise the stadium will crank up the worries of supporters, who fear that cash for new players will go elsewhere, despite the club still generating huge revenues. 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 share price has seen around £1.3bn wiped off the club’s value on the New York Stock Exchange.
But Chelsea’s sale has just raised £4.2bn, despite the London
club requiring another £2bn investment to build a new stadium.
The Glazers know they can continue to cash in on huge dividend payments and there would still be no shortage of buyers ready to meet their asking price should they put the club on the market.
Selling the naming rights to Old Trafford would be a lucrative but controversial move. Barcelona, who are being strangled by debts of £1.1bn, have just signed a four-year deal with audio streaming service Spotify that will net them £250m 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.”