INEOS '£1bn short' - Stefan Borson drops Man United stadium verdict after development
Manchester United's owners are too much in debt currently to afford the club's ambitious new stadium plans.
That is according to former Manchester City financial adviser Stefan Borson, who exclusively told Football Insider that INEOS and Sir Jim Ratcliffe likely need an extra £1billion to bring current plans to life.
The Red Devils have taken a significant step towards the dream move away from Old Trafford, having secured the majority of the land required to build a new 100,000-seater stadium.
In an official statement, the club feel as though this marks a "major milestone" in the long-term vision of transforming the Old Trafford area.
The 25-acre site is located approximately 350m north-west of the current stadium, with many now expecting plans to accelerate with the purchasing of new land.
Understandably, supporters are excited, but with plenty of work ahead, Borson has poured a cold-dose of reality over the latest development.
Man United owners have 'big question marks' over current debt
Speaking exclusively to Football Insider, the financial expert has been left unsure by the numbers and figures at Old Trafford, questioning where most of the money will be coming from.
"It obviously gives them an option should they decide to go ahead with the stadium. They seem that they are minded to," he said.
"But there's obviously big question marks as to how you fund such an incredibly large project in circumstances where the club already has £700m-£800m of debt.
"It can easily be fixed by the owner sticking in a whole load of cash as equity. But there are no signs that they're going to do that. And if they don't, then there's a big question mark as to how it all gets funded.
"And, I've had a look this morning, looking at what that might look like and how much a new stadium might generate incrementally versus the old stadium.
"To me, the numbers don't seem to work, but I'm sure somebody can explain what I've missed. My starting point is they're about £1billion short.
"They can't really raise it from debt. I think they're going to need somebody to put some proper money in."
Man United's new land is paying for itself
One benefit of Man United's new purchase is that it's a revenue-generating asset, so as you read this, it will slowly be repaying itself.
Speaking about this, Borson added: "It's obviously got some warehouses on there and some commercial property. So it's a revenue-generating asset.
"It's a bit of a no-brainer in many ways. What they're yielding from the purchase is probably close to what they're paying on the debt that they just got.
"So, it washes its face, broadly, whilst they decide what they want to do."
Although the building of the new stadium is still very far in the future, it appears to be a smart business decision from the Red Devils at this moment in time.