Sir Jim Ratcliffe spends all
Currently, Sir Jim Ratcliffe has moved to Monaco to live, so he does not have to worry too much about the tax issue when spending a large sum. According to the most recent annual richest statistics table of The Sunday Times, Sir Jim Ratcliffe has an asset value of 23.5 billion pounds in 2024, down from an estimated 29.7 billion pounds in 2023.
In recent years, Sir Jim has invested heavily in entertainment such as fashion, football and 4x4 racing. He considers Man United a part of his passion, so he may have an unimaginable investment. However, this hypothesis is quite unlikely as the owner of INEOS has just closed the UK's oldest refinery in Grangemouth, Scotland. Therefore, his financial situation may have some problems.
A new shareholder appears
When he owned a small part of Man United, enough to own the team, Sir Jim Ratcliffe showed the whole of Europe that this was quite... wrong. The team's performance is declining day by day, so the stock price cannot increase.
The current value of a Man United share is only $13.38. In 2012, when it was officially listed on the stock exchange, it was worth up to 40 USD. Therefore, investors will be quite hesitant if they want to spend money to buy shares. Since then, the game has only had INEOS and the Glazer family.
Is borrowing money feasible?
Tottenham borrowed about 1 billion pounds to build the stadium in 3 years (from 2016 - 2019). Currently, they owe about £850 million with an annual interest rate of 2.79%, which will be fixed for many years to come.
Spurs are paying an annual interest of around £22 million. However, home-field sales have tripled to £103m. If Man United borrowed all 2 billion pounds to build a stadium, based on the current debt of 730 million pounds, the annual interest cost was 200 million pounds.
Currently, M.U's home sales are about 108 million pounds/year. After the new stadium is built, all teams have increased this revenue at least 2 times. Therefore, Man United can consider this option because it will make a profit.
What about the contribution?
Like buying an apartment, INEOS can use a fixed amount, then borrow the remainder from the bank and pay it back gradually every year. SoFi Bank has paid a pre-match of $600 million to build a SoFi stadium with a total value of up to $5.5 billion. The remaining amount will be paid gradually within 20 years.
If Man United spend an initial deposit of about 300 million USD, the remaining amount can be paid within 10 years or a little longer. During that time, home revenue may increase every year. The problem is, at this time, which bank will stand up for an institution that owes a lot like Man United in installments?
Selling land around Old Trafford
Nearly 10 years ago, the Glazer family bought ownership of a lot of land around the current stadium. The local government is working on a project to change the city's planning to make Manchester more livable.
Of which, the project to build 11,700 houses and a lot of infrastructure may need to use the land fund owned by Glazer next to Old Trafford. The area of Glazer's house is 100 British models (about 404,600 m2). The land value of this area will range from 2 - 7 million pounds/set, depending on the purpose of use. If the local plan includes luxury projects on land owned by Glazer, they can sell them at high prices.
Under ideal conditions, the Glazer family can invest about 500 million pounds in the new Old Trafford project from land sales.
Some other options
To have money, INEOS can mobilize from many different sources. They can sell a percentage of the commercial rights of the new Old Trafford complex to partners. Or, INEOS will establish a new company to operate all of Old Trafford's operations, thereby calling for investment in this company.
In the sketch of the new Old Trafford, the stadium will have a symbolic arch and tower. If these two "not-so-necessary" items are removed, the cost will be about £300 million. Not only that, if about 10,000 seats are reduced in the most remote area (the most difficult to install and expensive), the cost of building a court will also decrease significantly.
