Manchester United plan to build a new £2bn stadium (Image: Foster + Partners)
It wasn’t just the big top design and Sir Jim Ratcliffe’s comparison’s with the Eiffel Tower that raised eyebrows when Manchester United revealed the latest plans for a new £2bn stadium to replace Old Trafford this week.
The benefits forecast for the project, which includes the wider regeneration of the area, also set tongues wagging: 92,000 new homes, 17,000 jobs and – most conspicuously – an additional £7.3bn contributed to the economy every year. For comparison, that is roughly the same as the UK music industry’s portion of GDP in 2023.
It is no coincidence that Manchester United co-owner Ratcliffe has publicly called on the government to offer public funding for the project, and such enormous figures should be seen as a carrot for the exchequer. But are they in any way realistic?
“The nice thing with projections is they’re never completely right or wrong until after the event,” says Prof Keith Pilbeam, an expert in economics and finance at City St George’s University.
“Most of these figures come from Oxford Economics. They were obviously paid money to come up with some estimates for the project. Those estimates look to be rather on the generous side, I would say, which is not unusual on big infrastructure projects.”
Other economists have been more sceptical. Dr Tony Syme, a macroeconomic expert at the University of Salford’s Business School, called the projected figures “remarkable”.
“The development of Tottenham Hotspur’s new stadium was estimated to generate £293m annually to the economy,” he added. “In 2017-18, when Wembley Stadium hosted 58 events, there was an annual economic impact of £615m. There is quite a gap from these recent stadium development and urban regeneration projects to the scale outlined by the Old Trafford project.”
Manchester United stadium claims ‘optimistic’
Manchester United’s headline projection of a £7.3bn annual economic boost to the UK represents a peak that would not be reached until the late 2030s. It also relies on the “multiplier effect”; the notion that creating jobs generates further spending and results in a virtuous cycle.
“I don’t think they’re completely plucked out of the air,” says Prof Pilbeam, who nonetheless questions whether Manchester’s population of around 550,000 could generate that level of return, even allowing for growth.
“People start spending money, more and more people going into the town eventually – to what extent can that be attributable to the growth that’s going to occur anyway? Yes, Manchester will increase. You can’t say that that’s all caused by the project.”
He adds: “We’re talking a lot of years into the future for the full £7bn to come true. But let’s divide that by the population of Manchester. You come up with a figure which seems a little bit implausible. Why? Because it says £12,727 per head in Manchester.”
Manchester United's stadium plan is part of a wider regeneration project
Manchester United’s stadium plan is part of a wider regeneration project (Image: Foster + Partners)
Ratcliffe outlined his vision to build a “Wembley of the North” soon after buying almost 30 per cent of his boyhood club last year, arguing that its wider benefits merited public investment. Chancellor Rachel Reeves is believed to be open to funding some of the costs relating to the wider regeneration but it is thought unlikely that will extend to the stadium.
It is not the only question about the numbers put forward by Manchester United, says Dr Syme. “The regeneration project would receive government funding, though there are no specifics on how much would be funded at this stage. Given the scale of the project, this is likely to be a huge undertaking.
“On the development of the new stadium, the finances are also unclear. It is estimated to cost £2bn and chief executive Omar Berrada stated that he couldn’t speculate too much on the funding of the stadium as Manchester United was a public limited company.
“While he added that this would be a very attractive investment opportunity, this should also be considered alongside Sir Jim Ratcliffe’s earlier statement that without his cost-cutting measures at the club, it could have been bankrupt by the end of this year.”
In keeping with modern super-stadia, the 100,000-seater venue will be far more than a home for football, with concerts, retail developments and restaurants likely to ensure that Manchester United’s huge investment continues to pay off on non-matchdays. The value to the club is not in question, but the consensus seems to be that the whole scheme’s promised contribution to the national purse will take some doing.
“We do know that, of course, when looking for extra finance you’re going to put in optimistic projections. What we also know is, most of the time, optimistic projections proved to be exactly that in many projects,” says Prof Pilbeam, who cites HS2 as a prime example.
Concludes Dr Syme: “It was a bold vision that was outlined, with a promise of enormous economic benefits. We do not have the details needed to assess whether this project will even be realised, let alone whether such incredible economic benefits will come to fruition.”