(12/22) So what is the cost of building a new stadium and update Carrington? The cost for Tottenham Stadium was 1.5bn, but that also included the purchase of land in London. The numbers mentioned in the Glazers’ projection is 2bn for a new stadium and 1.5bn for renovation.
(13/22) Assuming that includes renovating Carrington, how could this be financed? A new stadium creates additional income, of which some can be ‘cashed in’ early in the project, like certain leases, naming rights, subsidies from the community (you create a lot of jobs) etc.
(14/22) Assuming this amounts to 200m, a remaining 1,800m must be loan financed. The cost for interest and amortization over 15-year loan is app. 175m per year. How much would the new stadium increase revenues? For Tottenham, the …
(15/22)…gain has been almost 150m per year. But they increased capacity with 25k and brings big income from hosting the biggest events in London. I think a truer number for #MUFC would be 75m per year.
(16/22) That leaves us with a yearly cost of 100m per year over 15 years. Since this does counts as a ‘Relevant Investment’ in relation to the FFP, it doesn’t impact our ability to spend in relation to those rules, but it of course impacts our cash-flow.
(17/22) A quick glance at our income and expenses, shows that this would mean that we could incur yearly costs of app. £50m per year, from a cash-flow perspective, which basically mean that we would have a £150m transfer budget yearly before any sale of players.
(18/22) With inflation back in society, and given the growth of the game world-wide, the biggest weight of the stadium debt is front-heavy. In 10 years, with 5% yearly growth, our revenue would be 1.15bn, resulting in the relative cost for the stadium going from 14 to 8.5%.
(19/22) In any event, it is clear that it would be a constraint on the club. But at the same time, if our squad cost could equate up towards 500m per year, we could still -- again -- have one of the top 3-4 most expensive squads in football.
(20/22) One ‘low hanging fruit’ is the potential of creating a multi-club ownership group and improve our Academy so that it provides income on the same level as City or CFC, i.e. closer to 50m on average per year. Ineos already own Nice and Lausane.
(21/22) Given that our non-stadium debt would be zero, we could easily build up a – still healthy – non-stadium debt of say 200-300m over the first 5 years after the stadium is built, to enable heavy spending on the squad for one or two windows.
(22/22) So could we compete if we are bought by SJR? There are no guarantees, but financially we would easily be one of the top 3-4 clubs in the world in terms of ability to spend on the squad.
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