Explained: Manchester United’s plan to build a new Old Trafford

Sir Jim Ratcliffe cleared another hurdle last week in his bid to construct a controversial, government-backed building that will be the largest of its kind in Europe.

Confirmation that the Flemish government has issued a new environmental permit for Project One, the ethane ‘cracker’ he is building in Antwerp for €4billion (£3.4bn; $4.4bn), means his petrochemicals firm INEOS can press on with the work that was halted last summer after complaints from environmental lobbyists.

Perhaps buoyed by this news, the 71-year-old billionaire also seems to have decided to give the green light to the other big building he wants to crack on with.

Of course, he has not officially decided to build a new Old Trafford yet, but the Monaco-based Brit has effectively asked his advisors to come up with a good reason he should not. So far, they have not found one.

We should not be surprised. The reasons for building a larger and better stadium for Manchester United are the same Ratcliffe will have heard for building Project One: what we have is not good enough, it will be cheaper to replace than repair and, if we do not do this, we will be left behind.

But before we examine the rationale for moving 50 metres or so west, let us remind ourselves how Ratcliffe and United got here.

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Haven’t Manchester United been at Old Trafford forever?

Not quite. It has been United’s home since 1910 but the club, which was founded as Newton Heath Lancashire and Yorkshire Railway (LYR) Football Club in 1878, spent its first 15 years at North Road, a swampy cricket and football venue close to the railway in north-east Manchester.

They then dropped LYR from their name and moved to Bank Street in Clayton, east Manchester. They were promptly relegated to Division Two and spent the next eight years treading water and losing money.

In 1902, Newton Heath nearly went bust but were rescued by some local businessmen, led by brewery owner John Henry Davies, who pumped money into the club, renamed them Manchester United and started winning things.

Davies decided Bank Street, which was often blanketed in a fog of factory fumes, was not a home fit for heroes. So, he moved them to the other side of the city, where there was a public/private partnership getting started involving British and American money — and a scheme for getting one over on Liverpool.

“When Manchester United moved to Old Trafford it was one of English football’s ‘wow’ moments,” explains Simon Inglis, an architectural historian and author of several wonderful books about football stadiums.

“It might not have seemed that way but, looking back, it represents a move from the 19th-century model of professional sport to a club becoming an anchor tenant of a much bigger industrial project. This was a case of a stadium making the club, not the other way around.”

The project was Trafford Park, the world’s first planned industrial park and one of Europe’s largest. In the 1890s, it was almost surrounded by water, with the new Manchester Ship Canal to the north and the older Bridgewater Canal to the south. The former was built because Manchester’s industrialists were fed up with the prices Liverpool’s dockers were charging them, so they created a new port, 40 miles inland.

Many of Trafford Park’s early backers were American and it became one of Britain’s largest engineering centres. But Manchester United’s decision to hitch their wagon to this development almost bankrupted them again, particularly when the First World War broke out, depriving them of income for four seasons.

The stadium was designed by Archibald Leitch, the Scottish architect responsible for many of the most iconic British stadiums, and it was originally meant to house 100,000 spectators — another example of there being nothing new under the sun. That would have crippled the club, though, so the capacity was reduced to 80,000, with only the South Stand covered. Some who still sit there believe the roof was the last luxury it has got.

Having spent the interwar period yo-yoing between the divisions, United emerged from the Second World War in fine fettle on the pitch but a mess off it. As a vital cog in the British war machine, Trafford Park was bombed during the war and Old Trafford was collateral damage, forcing United to rent Manchester City’s Maine Road until 1949.

The cost of the rebuild, coupled with the loss of matchday revenue, left United in heavy debt, but Sir Matt Busby’s Babes were winning and becoming a European giant. Over the next decade or so, the second ‘masterplan’ at Old Trafford was completed, with roofs added, pillars removed and football’s first private boxes installed.

Each improvement reduced the capacity slightly. By 1980, Old Trafford could hold about 60,000 people, and this fell to 44,000 in 1990 when the UK government responded to the Hillsborough disaster — a crush at Sheffield Wednesday’s ground that killed 97 fans — by forcing all clubs in the top two divisions to go all-seater.

But from that terrible nadir, football’s popularity grew again, with United in the vanguard on and off the pitch. More chunks of Trafford Park were bought, the North Stand was replaced, second tiers were added in the east and west and, in 2006, two corners were filled in to take the overall capacity to 76,000.

And then… nothing. The Glazer family, who bought the club in 2005 with those 2006 improvements already planned and paid for, clearly decided the stadium was perfect.

How is Old Trafford looking now?

Rainy, rat-infested, rotten and rusty. The Theatre of Dreams is a comedy venue, home to England’s second-highest waterfall, the hole in the East Stand roof.

“Old Trafford is a huge and iconic building but it is old and tired,” says Ian Nuttall, founder of The Stadium Business website, the leading source of information on the sports and entertainment venue sector.

“I would challenge anyone to say Old Trafford is the best in class. Anyone coming to the ground for the first time finds it hard to work out where they are, get to their seats, buy a drink or get out at the end of the match. When it comes to providing a world-class entertainment experience to their customers, Manchester United are being left behind.”

So, that’s the view of an independent expert (Nuttall supports Portsmouth, by the way, so he is fond of old relics), but what do people closer to United think?

“Old Trafford is just old-fashioned,” says Tim Williams, who was United’s group financial controller for five years before becoming Inter Milan’s chief financial officer in 2015, then taking the chief executive job at Oxford United in 2022, which means he has worked for three clubs looking to build new homes.

“As it has been developed over time, the four stands have just been bolted together, so it’s difficult to walk around the whole building — like you can at Wembley and other modern stadiums. That might seem trivial but it really adds to your costs.

“For example, at Wembley, all the beer pumps are connected by one line, which makes it easy to manage. Wembley also has a central kitchen, while Old Trafford needs several. It was even worse at the San Siro, where we had to bring in food from outside covered in foil.

“The configuration of older grounds can also add to your security costs. We have to ‘kill’ a lot of seats at (Oxford’s) Kassam Stadium to segregate the fans. The problem is not in the seating area, it is in the concourse, which just isn’t a flexible space. It’s just not an efficient way to run.”

What Old Trafford does have, of course, is lots of seats. After a few minor tweaks, capacity is now at 74,310, which makes it the largest club stadium in the UK, second only to Wembley’s 90,000, and the 12th largest stadium in Europe.

Always full, Old Trafford generated a record £136million in matchday revenue in the 2022-23 season, more than £4million a game. That is still £18million clear of the second-most lucrative stadium in English club football, but Tottenham Hotspur’s ground earns almost £5million a game, despite having 11,000 fewer seats to sell.

For further comparison, United’s matchday revenue has risen by about 20 per cent since 2017, the year Tottenham left their old White Hart Lane stadium. Spurs’ matchday revenue has grown by more than 150 per cent over the same period. New home, new proposition.

“Old Trafford just isn’t very comfortable and some seats don’t have great views,” continues Williams. “Stadiums today are built with the fan experience at the heart of everything, so everyone has a good view and room for their knees.

“In the South Stand (now known as the Sir Bobby Charlton Stand), where people are paying more than £70 for their seats, they’re packed in like sardines. Good luck if you’re 6ft or over. And it can be hard to see the whole pitch. Compare that to the new Tottenham Hotspur Stadium, which makes you smile when you go in and when you leave.”

Williams might be over-egging it a bit there. A comfortable seat, nice food and a decent pint are not going to take the sting out of a defeat, but there is no denying what Spurs, and Arsenal before them, have managed to do with their new stadiums, particularly in terms of persuading wealthy fans to shell out for a meal with real cutlery, team sheets, a ‘free’ gift and a few jokes from a club legend to go along with their tickets.

United, much to Roy Keane’s chagrin, were the first to provide that type of thing but their premium offer is now second rate.

“We have to remember that people have more choices now and if you give them a crap experience, they’ll stop coming,” says Williams. “The rank and file might hate the prawn sandwich brigade but those premium seats subsidise everything else. You want everyone to have the best possible experience but you really have to maximise how much you earn from hospitality. Old Trafford just is not configured to do that.”

But it is not just that lot, in the posh seats, who expect more. We all do.

“We’ve been through a few generations of thinking on stadiums,” says Nuttall. “The first was about packing them in, then it was safety, then what broadcasters want. Now it’s about fan participation and entertainment, as fans’ expectations have massively changed.

“Clubs have to think about two different segments in their customer base: you still have the traditional die-hard fan but you also have a newer, more transient, potentially multi-club supporter, whose strongest attachment might be to an iconic player or who supports several teams in different countries and sports.”

OK, something has to change. Why not renovate?

After all, that is what Liverpool have done at Anfield, Fulham are doing at Craven Cottage (although that might not be the best argument for renovation) and Crystal Palace have been talking about doing at Selhurst Park for years… hmm, renovation might not be so easy.

Forget those last two, then, but Liverpool did it and now have the fifth-largest football stadium in England and the third-highest matchday income in the Premier League.

“Some will ask, ‘Why can’t you refurbish?’ but I suspect United would have to reduce capacity in the South Stand by 20 per cent to bring it up to today’s standards for comfort and user experience,” says Williams.

“There will be environmental objections, too, but you can address those. A new stadium is far more energy-efficient than an old one and if they get the transport plan right, they can mitigate the impact of the extra fans. There is gridlock after games at Old Trafford now. A new train and tram station would be a big improvement.”

We are racing ahead here but Inglis agrees with Williams on the direction of travel and points out that United have a big advantage over almost every other club faced with this choice.

“They own a lot of land around Old Trafford, which is very unusual,” says Inglis, referring to the almost 100 acres of car parks, warehouses and office space it owns at the eastern tip of Trafford Park.

“You cannot have a development on this scale without alliances: club, investors, local planners. Trafford Council wants this to happen. Usually, the background to stadium developments is one of conflict between the club and the local authorities but all the key parties are pulling in the same direction as Sir Jim Ratcliffe.

“The biggest problem will be answering the question, ‘Why are you pulling down a working stadium?’. From an environmental point of view, they will need an answer. It’s not impossible to do that but they will have to show that a new stadium is more sustainable than the old one and that a lot of the material can be recycled, if not at the new stadium but elsewhere.”

Nuttall thinks there will be some objections of this nature but believes they are misguided. “Old Trafford already has a huge carbon footprint and is not an efficient building. You can mitigate and minimise the impact of a new stadium, with wind and solar, and using rainwater. Your energy use can be more sustainable. The new stadium in Strasbourg is using aluminium from old airliners, for example.

“One thing they should definitely do is build a new station to serve the stadium. That would reduce traffic and be a benefit to the community.”

Paul Fletcher, a former professional footballer who became a club executive and opened new stadiums at Bolton Wanderers, Coventry City and Huddersfield Town, as well as being Wembley’s commercial director during its tortuous rebuild, has seen and heard all these debates many times before.

“The decision to build or not always comes down to money because new stadiums cost a fortune and it takes at least 10 years to get your money back,” says Fletcher. “But repairing them, or doing them stand by stand, can cost you even more in the long run.”

This is the question Ratcliffe has asked the Old Trafford Regeneration Task Force, a panel of the great and the good chaired by Lord Sebastian Coe, to answer. As well as Coe, who went from winning Olympic medals in 1980 and 1984 to running the 2012 Olympics’ organising committee, it includes Manchester’s mayor, Andy Burnham, the leader of Trafford Council, Sara Todd, and former United captain, media pundit and property developer Gary Neville.

With the “Liverpool option” estimated to cost in the region of £1billion and the “Tottenham option” at £2billion, Coe and co are leaning towards Tottenham.

There is, of course, another huge reason United are far more likely to build a new stadium than try to refurbish: what would they do while the builders were in?

Liverpool, Fulham and others just carried on with reduced capacities and tried to cram the heavy lifting into summer breaks, with varying degrees of stress. United have 51,000 season ticket holders. Where do they go?

Tottenham, who spent millions buying up land around White Hart Lane to make their new stadium possible, could not buy enough to be able to carry on at White Hart Lane until the new ground was ready, forcing them to play at Wembley for almost two seasons. Are United really going to rent Manchester City’s home again?

There are other patches of grass in Greater Manchester but none is suitable for even a short-term stay for a club of United’s size. So, a significant spell of reduced income, with all the headaches of compensating and relocating fans, must be added to the Old Trafford repair quote.

Got it. But how big do they go?

Before we answer that, let us take a beat and hear from someone not completely sold on the so-called ‘Bold Trafford’ option.

“The project is fascinating, both in terms of the final result and its execution,” says Aleksei Milovanov, who worked on the delivery of seven new stadiums for the 2018 World Cup in Russia before helping Qatar get its venues ready for 2022 and setting up Stadium Management Consulting, his Swiss-based advisory firm.

“It’s a remarkable challenge for an architectural firm to fit a 100,000-seat stadium into a narrow strip of land bounded by a railway (the main line to Liverpool runs along the southern edge of Old Trafford’s footprint, about 20 metres behind the Sir Bobby Charlton Stand) and a canal. This presents a complex task for both architects and builders in terms of construction planning.

“Regarding the debate on renovation versus new construction, in the case of Manchester United, it’s not just a matter of pragmatism. The existing stadium carries immense emotional value. How can this be preserved and transferred to a new stadium, ensuring it doesn’t become just a large, cold structure described merely as ‘huge’? This is also a challenge.

“Projects for such iconic stadiums should be discussed by the public, especially the local community. A stadium is a landmark, much more than just a sports venue, especially for a club like Manchester United.

“A massive stadium with such ambitions cannot be cheap but the cost of renovation may not be lower. Therefore, it’s important to find a balance between practicality, ambition and emotion.”

He is not saying “no”, then, is he?

“One of the biggest considerations, obviously, is size,” says Williams. “When we were working on a plan for a new stadium at Inter with (stadium architecture firm) Populous, we wanted to bring the capacity down from 80,000 to 60,000, as that was the right size for us and we wanted to improve the atmosphere. But at Oxford, we’re going the other way, from a 12,000-seater to 16,000. Again, we think that’s the right size for us.

“But United are like Barca and Real Madrid — they will fill a 100,000-seater.

“The challenge will be to build something that has the same atmosphere and sense of history. You don’t want anything generic. That’s why it has taken Manchester City a while to recreate the Maine Road atmosphere at the Etihad.

“You have to involve the fans. Spurs did that really well with their stadium. Just think about that ‘white wall’ they have created.

“For United, it will be little things like the lettering on the signs and the red bricks. Maybe they should even keep the crappy scoreboard. Manchester is a gritty, industrial city. United should not forget that. The stadium has got to feel like it cannot be anywhere else.”

He was joking about the scoreboard, by the way.

“One hundred thousand, why not?” says Inglis, who spent 30 years advising the government agencies set up after Hillsborough to make sure that tragedy is never repeated. “It doesn’t seem so ridiculous. But we have to forget this notion of the ‘Wembley of the North’ — it is a contradiction. The entire point of Wembley as a construct is that it’s neutral. A club cannot own a Wembley.

“What we should focus on is the north of England getting more of the type of investment that London has had for decades. Here, we have a world-leading brand wanting to do something bold on the west side of Manchester in the same way that Manchester City have done on the east.

“You might look at the Etihad, the new United stadium, the cricket ground, (Manchester City’s new indoor arena) Co-Op Live, the Manchester Arena and so on and ask, ‘Will there be enough concerts to go around?’. But Manchester has always been a party town — it’s what Manchester does. Entertainment is as much a part of Manchester’s story as cotton and this would be another chapter in the history of Manchester as a city and a northern champion.

“I have always thought of Manchester as the Chicago of England and a necessary counterbalance to London.”

Nuttall agrees with Inglis that the ambition is achievable. “You need owners with the financial resources but also talent and vision. We’ve seen that with Sir Jim Ratcliffe and INEOS,” he explains.

“He is a hugely successful businessman and an engineer by training. He’s made his money in chemicals, so he knows all about the interactions you need for success. He is also a local lad and it’s his team.

“Wembley is an immediately recognisable concept — it says big — but it also tells Manchester United fans this is ‘of the north’, it is about you. By aiming to be bigger than Wembley, that says something to Manchester and the north west. It’s a mission statement.”

What everyone agrees on is this will be a difficult build — they nearly always are — and it will require a bit more land.

While United do own a lot of space, they do not have a big enough single parcel of land for a 100,000-seat stadium, without knocking down Old Trafford first. This means they will almost certainly have to buy at least a slice of the rail depot next door. Owned by logistics company Freightliner, the important distribution hub would most likely need to be moved to a new, out-of-town site.

“This is where the political support of the local authority, the city and the national government all help,” says Nuttall. “There is a parallel with what happened at Arsenal where they had to build a new waste recycling centre to get the land they needed for the Emirates — all their directors became experts on waste management.

“Manchester United will have that expertise, too. (United’s chief operating officer) Collette Roche, who has been overseeing the stadium project, used to run Manchester Airport, which is a pretty complicated transport hub.

“But there is also the issue of land they will release at Old Trafford by moving slightly west. Manchester United could finally address one of the biggest mistakes they’ve made by building a hotel on-site. They could develop a proper outdoor fan zone and turn the site into something that is alive 24/7.”

Go big, then, but how do they pay for it?

Michael Weaver heads up the valuation advisory team at Kroll’s London office and is an expert on sponsorship deals. For the last few years, he has been publishing an annual report on the European stadium naming-rights market.

“Naming-rights deals are like free money for clubs, and those who do not have them are simply leaving money on the table,” says Weaver. “You only have to look at the United States, where almost every stadium is named after a sponsor, to see that.

“If Manchester United sold the naming rights to Old Trafford, our analysis suggests they would earn about £15million a year but you could double that for a new stadium. If the club decides to build a new ground, a naming-rights deal for, let’s say, 10 years, would cover a significant chunk of the construction costs and enable them to borrow money for the rest at a better interest rate.

“I don’t understand why they would not do a naming-rights deal.”

United have spent a fair bit of time looking at how other clubs have answered the build-or-renovate question. It is no accident that news of Ratcliffe’s inclination to be bold came in the week that the team played Arsenal in a friendly at the SoFi Stadium, the £4billion-plus venue built by Arsenal’s owner Stan Kroenke for his NFL team the Los Angeles Rams.

The 70,000-seat marvel is part of an even bigger entertainment, housing and retail development in the LA suburb of Inglewood, and is also the home of another NFL team, the Los Angeles Chargers. It has already staged a Super Bowl, several other major sporting events and some massive concerts, and is lined up for eight games at the 2026 World Cup and the opening and closing ceremonies of the 2028 Olympics.

You get the impression that Ratcliffe saw it and thought “I want one”.

Kroenke, whose personal net worth is in the same ballpark as Ratcliffe’s, funded most of the stadium’s cost himself but got a big helping hand when SoFi, an online bank, paid $600million to put its name on the building for 20 years.

“At the SoFi Stadium, the link between the sponsor and the venue is obvious,” says Weaver. “From the amazing giant screen to all the apps the venue uses, the TVs in the concourse, the fully interactive user experience. It fits.”

Who or what would fit at United’s new home? Would anyone even use the new name?

These questions are harder to answer and United fans are divided — but Arsenal fans have got used to the Emirates and Manchester City fans seem to have no problem with calling their home the Etihad.

“INEOS might be a more palatable sponsor than someone else as Manchester United are already actively associated with INEOS and it would suggest that Ratcliffe’s company is fully committed and in it for the long haul,” suggests Weaver.

“Our research suggests that British fans are no longer as opposed to naming-rights deals as they were. Fans are becoming more financially literate with their clubs and they know what it takes to compete on the pitch, particularly if you are up against rivals backed by sovereign wealth funds.

“You have to squeeze out all of the juice.”

So, a naming-rights deal will help but what about the rest?

“It is going to be very expensive,” says Williams, with the air of a man who has seen a few builders’ quotes in his time. “I’m sure it will have to be funded by a mix of equity and debt. There will be no shortage of global banks and private-equity firms that want to lend United money but it will be interesting to see how much they borrow and where that debt sits.

“Debt is a very loaded term at United but it is normally better to put any stadium debt on the club’s books or a club subsidiary. Separating club and stadium rarely works in the long term.”

Williams’ point about debt being a four-letter word at his old club is a reference to the money the Glazers borrowed to complete their leveraged buyout. About £500million of takeover-related debt has sat on the club’s balance sheet for nearly 20 years, accruing interest the club has paid, not the Glazers.

More recently, it has been joined by about £250million of old-fashioned overdraft debt, a consequence of Old Trafford being empty during the pandemic and United not being as good as they used to be. Ratcliffe cannot do anything about the former but he clearly has designs on the latter.

Altogether, United already have about £750million of debt. That is not quite as much as Tottenham but they have built their new stadium and nearly all of their debt is long-term and low interest.

Whether Ratcliffe puts more debt on the club, a new company or INEOS, interest rates are higher now, and there are serious questions to ask about how much club-related debt Manchester United can sustain.

But Nuttall remains confident Ratcliffe can. “We know it cost Spurs about £1.2billion to build their ground but building in Manchester should be a bit cheaper — not much but a bit,” he says. “Spurs also had to buy a lot of land. Manchester United will have to buy some but not much.

“The SoFi Stadium is another benchmark. That was £4billion-plus but that includes an indoor arena and a lot of outdoor space. SoFi is a smaller stadium than the one United are considering but one of the reasons it was so expensive was they had to dig down so it stayed on the flight path into the airport. That was so they could put advertising on the roof. Some stadiums have LED boards that flip around to face outwards, so there are lots of things you can do now to really sweat your asset.

“I suspect United’s stadium will have a closing roof so you can get a much bigger range of events in there all year round. Ratcliffe’s target of six years is realistic. If you make things too tight, your contractors will have you over a barrel.

“Of course, £2billion is a lot of money, so how do you earn it back? I’m not so sure I can see Major League Baseball games in Manchester but why not the NFL? Or a drive-in cinema? Or a motor-racing experience, like Spurs? There is so much you can do.”

Fletcher has been making that point for more than 30 years. “We are still only scratching the surface with what stadiums could be,” he says. “For example, you could easily wrap 20 to 25 retail units around stadiums that would be closed for the matches but open during the week. It still amazes me that clubs don’t do more with their stadiums. Can you imagine spending millions on a new hotel and then opening one night every two weeks?”

See how exciting these projects can be before you have to worry about where the rubble goes, how early you can start your cement mixers and who should pay for the new bridge that is required over the canal?

But Ratcliffe, now the largest single shareholder at United, looks like a man who has made his mind up.

“Sir Jim is asking people to come up with reasons he shouldn’t do what he wants to do,” says Williams. “And if he does proceed, he is going to be the guy who did what needed to be done a decade ago. That’s quite a legacy.”

(Top photo: Michael Regan via Getty Images)