Manchester United’s creaking Old Trafford stadium is putting off potential buyers
Manchester United’s potential suitors are being PUT OFF by the state of Old Trafford with club’s creaking stadium in desperate need of an upgrade… but it would cost investors £200m
- Manchester United owners, the Glazers, would require £2.4billion to sell the club
- Financiers believe only 20 people in the world have a enough net worth to bid
- It would take the sovereign wealth of a Middle East state to buy the Glazers out
- An estimated £200million would be needed to overhaul the Old Trafford stadium
The dreadful state of Old Trafford is an impediment to anyone buying Manchester United from the Glazer family.
That is the view of corporate financiers who have detailed knowledge of the club.
The Glazers, who prize United as one of the few parts of their business empire that makes them money, would require a staggering offer of more than £2.4billion to sell.
Heavy rain pours off the roof of Old Trafford during a football match at the London Olympics
Financers believe an estimated £200million would be required to overhaul the stadium
United indicate that the cost of developing their ancient, untouched South Stand is unviable
Financiers believe only 20 people in the world have a high enough net worth to enter the bidding and that it would take the sovereign wealth of a Middle East state such as Saudi Arabia to buy the Americans out.
The extraordinary asking price would be compounded by an estimated £200million needed to overhaul a stadium which has been left looking antiquated by the facilities opened by Arsenal and Tottenham.
Privately, United indicate that the cost of developing their ancient, untouched South Stand to create a 90,000 stadium is unviable and impossible within the financial model on which the Glazers concluded their leveraged £790m takeover in 2005.
The £200m bill may be a conservative costing. Overhauling Old Trafford is a fiendish logistical conundrum entailing an extension up and over the adjacent railway line.
Former United executive vice-chairman David Gill (L) talking to Avram (C) and Joel (R) Glazer
United would also require an alternative stadium while the work was done.
One of the reasons Manchester City were so attractive to Abu Dhabi in 2009 was the purpose-built stadium they could move into, with capacity to expand. But there is already evidence that investors consider United a less attractive proposition than City now.
Financiers believe it was significant that private equity giant Silver Lake invested £380m in City, rather than United, when they moved into the Premier League in November.
That investment values the City group of companies at nearly £3.8bn.
Tottenham’s new stadium has made United’s Old Trafford ground look outdated in comparison
The Saudis have expressed interest in United. One well-placed source suggested that there has been contact on two occasions. But the sticking point is the Glazers’ refusal to contemplate selling more than a 20 per cent stake, while the Saudis would want to take the club over — lock, stock and barrel.
With the Premier League TV rights market showing no sign of cooling off, the club’s on-field struggles are an insignificance to the Glazers. But financiers point out that prospective buyers would not want to feel they are paying over the odds.
Aside from sovereign wealth funds of Saudi magnitude, there are simply not the buyers out there. The sums currently under discussion for clubs are well below £500m — as the £340m Saudi interest in Newcastle United shows.
Approaching the 15th anniversary of the purchase of United, the Glazers show no sign of attempting to improve the governance of the club, who are currently 38 points behind Premier League leaders Liverpool after 25 games.
In the last year of Sir Alex Ferguson’s management, Gill also stepped down as chief executive
Arsenal moved to the Emirates in 2006 after knocking down their old Highbury stadium
In the last year of Sir Alex Ferguson’s management, when executive vice-chairman Ed Woodward’s predecessor David Gill also stepped down, they won the Premier League by 11 points — overturning the popular belief that reigning champions City would eclipse them.
Woodward said in November that he did not think the Glazer family were looking to sell.
He told the magazine United We Stand: ‘Based on what I see, they’re in it for the long-term. My understanding is that there have been no discussions for a price for the club or anything like that.
‘Every conversation we have is based on the long term.’
Ed Woodward said in November that he did not think the Glazer family were looking to sell