(Bloomberg)-The sudden Manchester United PLC advertisement this week about new 100,000-seat plans were easy. Now you need to find money.
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Bankers are discussing how difficult it is to borrow 2 billion pounds ($ 2.6 billion) needed to build a giant place. Lessers can save between one billion pounds to 1.5 billion pounds of debt, according to people familiar with the market for financing. They said that this would leave a vacuum that may need to fill out property rights, and ask not to recognize it because any deal will be special.
However, a number of developments of modern stadiums – such as Barcelona in Spotify Camp Nou – were fully funded by debt, and Manchester United should be able to raise the capital you need, separate people said. There is also the possibility of financing from the new UK government that is keen on projects to stimulate economic growth.
Manchester United CEO, Omar Perrada, said that he will look at all options in financing. Although the club has been struggling on the field in recent years, and it is already loaded at least one billion pounds of debt, it is unlikely that the club is less than the financiers ready to help, given that it is considered one of the largest football teams in the world.
The people said that Goldman Sachs Group Inc. And Jpmorgan Chase & Co. They are probably officers in this mix when it comes to knowing solutions, given that they helped Jim Ratcliffe to fight the opposition in the battle to win the club last year. They added that Bank of America
The people said that Manchester United has not yet spoken to the lenders officially, and the structure of any financing may change depending on the credit markets, possible government financing and the club’s performance on the field.
“The stadium transactions, if organized conservative, are more attractive to investors than the teams themselves,” said Manuel Guterres, Vice President of Corporate Classics at Mooringstar DBRS. “The revenues resulting from the stadium tend to be more flexible than clubs, as they may depend on the sales of players or other volatile elements.”
The challenge is that credit markets have changed since Manchester United has raised its recent debts. Borrowing has become more expensive after increasing inflation in recent years, although central banks are now low interest rates.
The club is also expected to re -fined its current debt as part of any money raising deal for the stadium, and this will be witnessed mainly the benefits payments – which makes lenders more cautious than excessive loading.
Also, it is not clear where any royal rights will come from, if necessary. Ratcliffe spent about $ 1.5 billion to gain nearly a third of Manchester United and since then he has been lowering jobs and employee privileges as he tries to control costs. Meanwhile, the Glazer family is still the majority of its owners.
Manchester United, Joldman Sachs, JPMorgan and Bank of America refused to comment.
Football clubs are increasingly focused on their stadiums, partly due to softening the profits from the media rights market, as well as the impact of the regulations related to the player’s spending on revenues. Morningstar DPS in a memorandum earlier this year said the stadium’s redevelopment shakes the club’s financing as well.
“The structures of higher clubs can achieve an investment credit rating,” said Guterres of Morning Star DP Biz and Michael Goldberg.
Creative options
People said that such a separate entity, which was secured through ticket sales on the new stadium, could be an option. He said that the expectations are that the club will have to raise debts through a variety of different means, such as project financing loans, third-party units, and municipal support-which the local mayor-and the special places that were mentioned long ago.
In 2015, the club raised $ 425 million of bonds due in 2027, and paid 3.79 % when standard interest rates were historically low. It has $ 225 million of loans from Bank of America, in addition to about 300 million pounds of additional credit facilities. It also owes approximately 300 million pounds for clubs for players.
One person said that the owner of his local opponent in Manchester City pays 7.4 % on some of the loans that were sold in the American credit markets and lenders are unlikely to provide the conditions of Manchester United less than 6 % to 7 %.
On the positive side, revenues in clubs that have renewed or built stadiums in the past decade, such as ATLETICO MADRIID, Tottenham Hotspur and Juventus, have seen, and their commercial and commercial flow flows increase 2.3 times faster than the regular team in the five major European League championships, according to Morningstar. The revenues of the Manchester United match amounted to 137.1 million pounds in the 2023/24 season.
Ratcliffe has already raised ticket prices and the club warned the fans who might need to rise. Such news comes in an unpleasant time: the team is currently ranked 14th out of 20 teams in the highest level of English football – which will be its worst end in 50 years if this level carries at the end of the season in May.
The plans of a new stadium, which will take to build, is an attempt to catch up with the modern facilities built by some of the largest clubs in Europe. Ratcliffe talked about the construction of “Wembley of the North”, referring to the home of the national team in England in London. People said as soon as it was completed, re -financing can occur on more attractive terms.
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