Manchester United’s plan to build a 100,000-seater stadium that is both a football venue and a national landmark is showing signs of strain.
Sir Jim Ratcliffe, who is no stranger to multi-billion pound infrastructure projects through his work with Ineos, announced United’s plans to replace Old Trafford in March this year.
The presentation to the media, complete with glossy digital renderings and scale models, came barely 24 hours after United’s co-owner had done a whirlwind round of interviews with various outlets.
The consensus was that they did not go well. Allusions to the club going “bust by Christmas” were widely pilloried, as was his clinical assessment of United’s sweeping job cuts.
Many observers inferred, therefore, that the announcement of the new stadium was something of a distraction tactic.
It worked. While the proposed stadium split opinion, it was impossible to deny that it was striking in both its aesthetics and its scale, with three huge pillars and a vast sweeping canopy.
United’s most recent accounts show annual matchday income of £160m, the highest for any club in Premier League history. But the owners think the Red Devils can go much further.
At present, Old Trafford has 10,000 executive club seats, 122 luxury boxes, seven hospitality lounges, 24 restaurants and four sports bars. That is where the real money is, and at a 100,000-seater stadium with as much as a quarter of capacity given over to ‘premium’ options, United want £250m in matchday income.
But for a club already in over £1bn of debt, is building the world’s most salubrious stadium really affordable? There were plenty within football finance who thought not.
Everton’s Colin Chong was right about United’s ability to fund new stadium
In the summer, Everton director and former interim CEO Colin Chong revealed that he had doubts about the feasibility of United’s stadium masterplan.
“[United] don’t own the land,” he told the Financial Times.
“They’ve not got a detailed stadium design, they haven’t got the funding [and] from what I can see there’s no strategic plan for how they are going to achieve that.”
Chong was largely responsible for seeing Everton’s Hill Dickinson Stadium through to completion and is now working on a new real estate project at Nelson Dock, adjacent to the Toffees’ ground.
More recently, it has emerged that United are drawing up plans for the stadium without the canopy, which was set to cost £300m despite being a largely aesthetic choice.
That in turn would reduce the amount of land needed to be purchased from Freightliner, which the company value at £400m, potentially reducing the overall cost of the project by up to £700m.
“Getting rid of the canopy is an easy way of reducing costs,” says Liverpool University football finance lecturer Kieran Maguire, speaking exclusively to United in Focus.
“There were many observers who saw the initial design and had reservations,”
“I have also seen several commentators suggest that this is very much part of the playbook, i.e., you start off with something that gets everyone’s attention and then you scale it back to something more realistic from a cost perspective.
“At the same time, labour costs are up because of tax issues, there is a shortage of labour post-Brexit, material costs are up as a by-product of Ukraine and economic uncertainty, plus general overheads – utilities and so on – are rising faster than CPI [Consumer Price Index].
“So while the cost of the stadium is coming down, whoever is going to press the button to start the stadium needs to do it sooner rather than later.
“Otherwise, there will be a significant overrun and you will end up paying the same amount of money for less stadium.”
Could new architect be brought on board?
The other big stadium news this week is that the Inter and AC Milan have agreed to buy the land necessary to build a new San Siro.
Foster & Partners have been appointed to design the new stadium.
The firm, led by close Ratcliffe ally Lord Norman Foster, is also the architect behind United’s new stadium.
Their involvement with the new San Siro has led some to question whether Foster & Partners will have the bandwidth for Old Trafford 2.0 too, especially if their initial design isn’t feasible.
Changing architects is common. Leeds United did it this week, moving from KDS to BDP as their choice to deliver their expansion to 53,000.
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