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Daily Telegraph

Arsenal announce that they had finally secured the money to build their new £357 million, 60,000-seat stadium at Ashburton Grove.

In a message addressed as much to the outside world as the doubters within who did not think the money would be secured, the Premiership leaders made the announcement not at Highbury, but at their training ground at London Colney. Arsene Wenger applauded and champagne and canapes, caviar and deep fried prawns, were much in evidence.

Wenger said: “The project meant taking on a risk and gamble but it shows that we move on, get better and compete with the best. We never give up and we never accept defeat and fight to compete with the best.”

To do that Arsenal have taken on a huge debt. Over the next two years they will be borrowing a total of £385 million.

In a complex deal which involved some 3,000 legal documents, £260 million of this debt, called senior debt, is owed to a consortium of banks led by the Royal Bank of Scotland and will provide the bulk of the £357 million needed for the stadium, the rest coming from Granada, Nike and sale of surplus land assets relating to the stadium site.

However, constructing the new stadium — which should be ready for the 2006/7 season — also means regeneration of a 60-acre site and in order to do the deal Arsenal have had to become a property company, while still running a football club. This has led to more borrowing, called junior debt, some from the Royal Bank, and some from their existing bankers, Barclays. All this totals £385 million. Two months before the new stadium is due to open in August 2006 Arsenal will owe the various bankers £285 million, more than three times the present debt of £90 million.

But Arsenal feel this is necessary if they are to compete with Manchester United despite the fact that even their new stadium will have 7,000 seats fewer than Old Trafford at present.

Danny Fiszman, Arsenal’s biggest shareholder, and the board director who has driven this project said: “We are playing catch up with Manchester United, but I do not think we have had the successful team in the past that we have today that would have created the waiting list for tickets. We are very dependent on success. When I came on the board in 1991 we were not selling out. Then we could not have considered a move.”

Fiszman admitted that there were moments in the last year when there were grave doubts if Ashburton Grove would happen. “It has been a roller coaster ride but we always had faith in the project. Last April [when work on the site was stopped as Arsenal searched for money] was not a good day.”

Arsenal’s search for money was not helped by the fact that Wembley was also searching for money and Peter Hill-Wood, the chairman, said: “Wembley complicated matters, it made it more difficult for us.”

One of the complicating factors was that the banks who lent money to finance Wembley have not been able to pass on the debt to other bankers. Keith Edelman, the managing director, said: “There are still underwriters holding more of the Wembley debt than they would choose to hold. It made it much more difficult.”

Sharing Wembley was an option favoured by some at Highbury, most notably David Dein, the Arsenal vice-chairman, who was not at yesterday’s celebrations, and Edelman said: “At one juncture sharing with Wembley might have been possible. We evaluated Wembley. But it was a far less attractive proposition financially than Ashburton Grove and that drove us way from Wembley. If Ashburton Grove did not happen it would have been better to stay at Highbury and put the prices up.”

Arsenal are promising that some ticket prices at Ashburton Grove will be cheaper, with 10,000 of the extra 20,000 new seats reserved for residents of Islington.

Arsenal have ruled out sharing their new stadium with anyone else and Hill-Wood has no doubts that their project will be the last on such a scale. “It is the last big project in football, I doubt if we shall see another project like this.”

So where does this leave their great rivals Tottenham, who are looking for a new stadium? Edelman said: “I think you’d better put that question to Tottenham.”

The Arsenal board maintain that, despite the debt, Wenger will have money to buy players and Edelman said: “It was Arsene Wenger who was egging us on to go for the new stadium. He is an ambitious man and we have taken some risk to get where we are.”

However new players cannot expect fantastic salaries and Hill-Wood warned: “You will find salaries of players will not increase.”

© Mihir Bose

      

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