Delays put Arsenal's new home in doubt

Wembley could be better relocation option for Gunners as proposed move to £400m Ashburton Grove development suffers setback

Arsenal's move to a new 60,000-seat stadium at Ashburton Grove has been seriously delayed, it was announced yesterday. The news will heighten speculation that the project may never come to fruition and that the Gunners could end up as tenants at the new Wembley stadium, despite strong denials from Arsenal.

Arsenal's move to a new 60,000-seat stadium at Ashburton Grove has been seriously delayed, it was announced yesterday. The news will heighten speculation that the project may never come to fruition and that the Gunners could end up as tenants at the new Wembley stadium, despite strong denials from Arsenal.

In a statement, Arsenal said that reports that the proposed move to Ashburton Grove might be scrapped were "completely untrue". It added: "We remain fully committed to relocating [there]."

Such a steadfast commitment is at odds with a raft of difficulties currently besetting the move. The statement acknowledged the problems. "Due to the complexity of the project, a number of delays have occurred not just on the construction of the stadium itself but also with legal, financial and property issues, transport infrastructure, relocation of existing local statutory services and businesses, provision of affordable housing and significant regeneration of the local area. All of these issues are directly related to the overall project.

"The impact of these delays mean that the club is now unable to relocate to Ashburton Grove for the start of the 2005-06 season as planned." The statement added that Arsenal will move to their proposed home "at the earliest possible date thereafter".

One of the major "issues" alluded to in Arsenal's statement is the financing of the project, which will cost around £400m if it goes ahead. The Royal Bank of Scotland, which is arranging a £300m loan for the development, has been attempting to syndicate that loan. By attempting to spread its risk – rather than underwriting the whole deal – the bank is showing evident doubts. Finance could be a problem if the loan cannot be syndicated and the RBS pulls out.

Arsenal remain confident that funding will not be a problem. The club has already overcome planning difficulties due to opposition from locals in Ashburton Grove, which is less than a mile from Highbury.

What is in no doubt is that Arsenal need to move if they want to close the wealth gap between themselves and Manchester United. Highbury, Arsenal's home for 90 years, can seat only 38,500 fans compared with the 68,200 who can be accommodated at Old Trafford.

United's superior ticket sales of 30,000 per game – as well the extra related match-day income – is one of the reasons why their manager, Sir Alex Ferguson, has been able to spend lavishly in the transfer market in recent years. Had it not been for a superb eye for bargains in the transfer market on the part of their manager, Arsène Wenger, Arsenal would have struggled to keep pace. And Wenger, like Highbury, will not be around for ever.

The Wembley option is one that could become more attractive the longer that Ashburton Grove is delayed. Two major hurdles stand in the way: objections by other clubs about the national stadium being a club venue; and objections from local residents about the number of events.

But a long-term or even medium-term tenancy agreement would make a great deal of financial sense for both Arsenal and the cash-strapped Football Association. Arsenal would have a huge, state-of-the-art stadium at a fraction of the cost of building their own. The FA, which would seek rent and possibly a share of ticket profits, would face a much easier task in repaying its own massive building loans.

Of the new Wembley's £757m cost, the FA has borrowed £433m in straightforward bank loans and another £48m against future earnings from the new stadium. A successful stadium is essential for an organisation being forced to lay off administrative staff because it cannot afford them any more.

* Unlike Ashburton Grove, the new Wembley is due to open in 2005. Wembley National Stadium Limited, the company overseeing the development, yesterday appointed the former Manchester City chairman David Bernstein as a non-executive board member. Bernstein was chairman at City for five years, but left last month after a series of boardroom disputes.