A Warning for the Future

[Charlie-Brown]

You really are clutching at straws. Romanov does what he want when he wants. If there is anyone at the Bank who can actually stand up to him (doubtful) then they probably only did so after the horse had bolted and lots of money had been spent. Burley's target was a knowledgabe and realistic one (probably another reason for him being binned) whereas Romanov didnt / doesn't have a clue, a good example being his reaction to the 1-1 draw at Parkhead despite us playing them off the park fo long periods. Seriously, have a word because your excuses and arguments (which to some extent must be being fed to you) are laughable.

 

Romanov can only do what he wants within limits - for example at Hearts he still has to get shareholder approval (even though at 80% that's now a formality) however he had to spend a not inconsiderable amount of time and money acquiring a stake then full control over a period of more than a year - similarly Ukio Bankas is a profitable and at least on appearances a relatively successfully run & expanding business - and there is a whole structure of supervisory board level above the banks management to ensure the bank is run properly and within Banking regulations.

 

It's not as if Vlad & Roman have a biscuit tin stuffed with cash in Kaunas that they decide to spend on whatever......anyway there is no way that Ukio Bankas or HBOS or anybody would commit such large sums of money for a whim or ego project just because Vlad thought he could beat Rangers & Celtic -there would still have to be budgets, revenue & cost projections - profit & loss forecasts etc.

 

There is no way that Ukio would agree to assume the majority of the ?20M existing debt then add another ?15-20M over and above that - they have subsidised ?5M and ?8m losses in the last 2 years for which accounts have been published - they simply would not sanction that amount for a club technically insolvent - Coco pointed out on another thread they could easily make more money at zero risk by lending money to the UK government - so to get that kind of money they would need a credible business plans to repay or secure that money or else risk downgrading the banks credit rating (they are a listed company) if they were involved in such lax lending practices as you are implying.

[Boaby Ewing]

Romanov can only do what he wants within limits - for example at Hearts he still has to get shareholder approval (even though at 80% that's now a formality) however he had to spend a not inconsiderable amount of time and money acquiring a stake then full control over a period of more than a year - similarly Ukio Bankas is a profitable and at least on appearances a relatively successfully run & expanding business - and there is a whole structure of supervisory board level above the banks management to ensure the bank is run properly and within Banking regulations.

 

It's not as if Vlad & Roman have a biscuit tin stuffed with cash in Kaunas that they decide to spend on whatever......anyway there is no way that Ukio Bankas or HBOS or anybody would commit such large sums of money for a whim or ego project just because Vlad thought he could beat Rangers & Celtic -there would still have to be budgets, revenue & cost projections - profit & loss forecasts etc.

 

There is no way that Ukio would agree to assume the majority of the ?20M existing debt then add another ?15-20M over and above that - they have subsidised ?5M and ?8m losses in the last 2 years for which accounts have been published - they simply would not sanction that amount for a club technically insolvent - Coco pointed out on another thread they could easily make more money at zero risk by lending money to the UK government - so to get that kind of money they would need a credible business plans to repay or secure that money or else risk downgrading the banks credit rating (they are a listed company) if they were involved in such lax lending practices as you are implying.

 

You mean like transferring it to Ubig or something?

[Charlie-Brown]

You mean like transferring it to Ubig or something?

 

The providers of Hearts debts will be listed in the accounts or in the notes to the accounts (and any changes) for that accounting period.

 

It is possible that some or all of Hearts debt has been transferred or assumed by UBIG and the talk of debt / equity conversion would lend some credence to that - however Ukio certainly acquired the majority of the HBOS debt and were the major provider of finance for the previous year - so even if it has subsequently been moved elsewhere within Romanov's group - he still had to get provided with that 'loan' initially so my point about providing adequate business plans and security to ensure the bank was repaid / secure would still have to have been provided.

[Charlie-Brown]

October 2005

 

Although Hearts' business plan for 2005-06 is based on finishing third in the SPL, the opportunity to split the Old Firm and finish in the top two is becoming an ever more credible possibility thanks to the unbeaten run put together by manager George Burley and the players.

 

Currently top of the league and selling out their home games - the 'house full' notice at Tynecastle will go up again for the visit of Dunfermline this afternoon - Hearts, paradoxically, remain unable to balance the books.

 

"Mr Romanov has already done a huge amount for the club as the principal shareholder. How much more can he do as the owner? I would argue that anyone in his position, who is planning to invest huge amounts of money in further player acquisitions in January and the development of the ground, would want the comfort of being in control. I know I certainly would."

 

While there will be other days when the re-development of the stadium is higher up the agenda, Foulkes also made it clear the club was staying at Tynecastle and that two plans have been drawn up for the future. Plan A would see the development of a 24,000 seater stadium and Plan B for a capacity of 38,000.

 

From this article http://londonhearts.com/scores/mrep/20051022011.htm

 

 

Only by increasing the capacity at Tynecastle to either 24,000 or 38,000, depending on planning approval for a re-development plan, can the club hope to generate the level of revenue which will change its status from hopefuls to contenders.

[Geoff Kilpatrick]

What this thread shows is the fact that action to turn things around needs to be taken now. This close season is probably the most important in the past decade in a bid to get things right on the playing side of the pitch. If that doesn't happen, then the drift will continue. Perhaps not to relegation but to a finish where we have two digits.

 

That said, the playing side could be dramatically improved. Levein got rid of highly paid wasters when he first came in, such as Petric etc. and brought in journeymen like McCann, Boyack and McAnespie who, while not very good, at least offered effort and commitment. That's what we need back on the pitch.

[Eldar Hadzimehmedovic]

Do you really think it's credible that a bank (any bank) would give carte-blanche to spend tens of millions of pounds in 2-3 years without a coherent explanation of a) how that money is to be spent or how that money is to be repaid / the banks security on the money lent.

 

There was relatively relaxed spending & increased investment in year 1 (2005-06) there has been very rapid & undeniable cost cutting in years 2 & 3 since then - something major changed that summer - VR had spent bigger than we'd ever known in August 2005 & January 2006 - yet very little was spent in Summer 2006 much to the annoyance & disappointment of many - so if it wasn't the lack of stadium progress that cause the rapid about turn in spending what was it?

 

The fact that he's an unstable, unpredictable, certifiable lunatic?

[grumpyjambo]

Pretty accurate analysis, though relegation is but a step on the way to the bigger disaster of extinction.

 

The problem is the solution is the problem. Moronov can't hack this: his ego and delusions forbid a rational outcome.

 

Who wants to take on the current debt, far less the level it will have reached when we have the biggest stadium in the Irn Bru 3rd division?

 

Somewhere along the line we'll be declared technically insolvent, or UBIG will be forced to call it quits to ensure their own survival.

 

Maybe it has to be a cruel end to give hope. If we kill the beast and write off the debt, we can get down the Meadows and re-form. Ok, it'll be a few years getting through the East of Scotland league and the rest of it, but who knows what might rise from the ashes?

Reform and play at the Meadows? So called supporters are refusing to go and see Hearts now that we are in the bottom six!! What chance have we got of rising from the ashes? **** all!!!

[Martin_T]

Do you really think it's credible that a bank (any bank) would give carte-blanche to spend tens of millions of pounds in 2-3 years without a coherent explanation of a) how that money is to be spent or how that money is to be repaid / the banks security on the money lent.

 

There was relatively relaxed spending & increased investment in year 1 (2005-06) there has been very rapid & undeniable cost cutting in years 2 & 3 since then - something major changed that summer - VR had spent bigger than we'd ever known in August 2005 & January 2006 - yet very little was spent in Summer 2006 much to the annoyance & disappointment of many - so if it wasn't the lack of stadium progress that cause the rapid about turn in spending what was it?

 

 

I'm sorry Charlie, but your out of your depth when it comes to financial matters. No credible bank would have touched Hearts 3 years ago as any kind of investment. The fact is I'm afraid, that Romanov's ego is what has got us into the unsustainable level of debt, it is upto him personally in my opinion, to provide a capital injection to get us out of it.

[Geoff Kilpatrick]

I'm sorry Charlie, but your out of your depth when it comes to financial matters. No credible bank would have touched Hearts 3 years ago as any kind of investment. The fact is I'm afraid, that Romanov's ego is what has got us into the unsustainable level of debt, it is upto him personally in my opinion, to provide a capital injection to get us out of it.

 

Romanov is providing 'capital injections' by continuing with these loans to sustain the business, albeit not very big ones!

[bertracoon]

I'm sorry Charlie, but your out of your depth when it comes to financial matters. No credible bank would have touched Hearts 3 years ago as any kind of investment. The fact is I'm afraid, that Romanov's ego is what has got us into the unsustainable level of debt, it is upto him personally in my opinion, to provide a capital injection to get us out of it.

 

Aha, so apparently No More Heroes is Charlie Mann?

 

Just in from a night out, every days a school day!

[bighusref]

The appointment of a manager that has full managerial power over all footballing issues would iradicate half of the doubters overnight IMO.

 

I would bet that Chelsea lose much more money per annum than we could ever dream about, the difference is their team is doing what they should be.

 

Had Chelsea been languishing in the league, I would wager that confidence in Abramovich would be low and the finances would be called into question, "will Abramovich asset strip us?", "How can a football club sustain this debt?" etc. Football is governed by results, successful teams will do well.

 

If Romanov does not give a decent manager the room to do his job, then this will go the way that FJ states.

[PTBCAL]

FTH

 

[troonjambo]

gasp shock horror reasonable and thoughtful debate returns to kickback :) excellent op and responses just a shame the truth is so tragic and scarey:sad::sad:

 

 

personally i live in the hope that mr romanovs ego and wallet will not permit his baby to fail so badly and i live in terror that he still thinks treacherous players and agents caused this mess

[Charlie-Brown]

I'm sorry Charlie, but your out of your depth when it comes to financial matters. No credible bank would have touched Hearts 3 years ago as any kind of investment. The fact is I'm afraid, that Romanov's ego is what has got us into the unsustainable level of debt, it is upto him personally in my opinion, to provide a capital injection to get us out of it.

 

Well even if you consider UKIO Bankas to be less than 'credible' which you are entitled to your opinion - they still had to advance Romanov loans of their depositors (creditors) money therefore they are still governed by banking laws & fidiciary duties - there would have to be business plans & securities put in place to protect the Bank & their customers - they couldn't just say "go ahead Vlad fill yer boots" could they?

[buzzbomb]

Two points, in my opinion had we went to Murrayfield under Robinson we'd have been nearer to this scenario than we are now and if all the fans who say they are staying away do so, it'll bring about the OPs prediction more quickly. A self-fulfilling prophecy if you like.

[Jammy T]

Two points, in my opinion had we went to Murrayfield under Robinson we'd have been nearer to this scenario than we are now and if all the fans who say they are staying away do so, it'll bring about the OPs prediction more quickly. A self-fulfilling prophecy if you like.

 

Rule by fear is never acceptable

 

NEVER

 

Who's to say that if we had moved to Murrayfield 3 years ago and cleared all but a small amount of our debt that we wouldnt be closer to the way Hibs have gone? ie proper development of youth players, good transfer income, and increasing profits.

 

People can argue that we might have gone bust after a move to Murrayfield - I personally cant see how but there you go.

 

NOBODY can say for a fact that we would have

 

Therefore NOBODY can get all glassy eyed on a factual basis about the "fact" that Vlad saved us and we are therefore forever indebted to him.

 

He prevented us moving to Murrayfield (for the time being) nothing more.

[King of the North]

Rule by fear is never acceptable

 

NEVER

 

Who's to say that if we had moved to Murrayfield 3 years ago and cleared all but a small amount of our debt that we wouldnt be closer to the way Hibs have gone? ie proper development of youth players, good transfer income, and increasing profits.

 

People can argue that we might have gone bust after a move to Murrayfield - I personally cant see how but there you go.

 

NOBODY can say for a fact that we would have

 

Therefore NOBODY can get all glassy eyed on a factual basis about the "fact" that Vlad saved us and we are therefore forever indebted to him.

 

He prevented us moving to Murrayfield (for the time being) nothing more.

 

 

Is it impossible that our stadium development somehow doesn't happen due to, ooh, unforeseen problems. We sell the ground to service some of the debt and end up at Murrayfield still 20 million in debt, with UBIG making tasty regular money on our crippling interest payments.

 

Or VR sells the ground, he/UBIG/Ukio get the cash, and we remain 38 million in debt, with even larger interest payments and no stadium.

 

In short, far worse off than we ever were under the pieman (who remains to blame for starting the ball rolling with the SMG deal).

 

Or if the stadium devbelopment does happen, we are either 90 million in debt, or still 38 million in debt with the new development (including the stadium) owned by someone else.

 

As a football club we are fecked - worse than we would have been had we made the move to sell Tynie three years ago.

 

For this venture to succeed VR would have needed to use some of his own money - as he promised. Two key moments were the sacking of Burley and, more damaging, the failure to invest before the AEK game. That was a moment that could have made a difference, in football and business terms.

 

 

As it is, I cannot see a positive end to this

[Jammy T]

Is it impossible that our stadium development somehow doesn't happen due to, ooh, unforeseen problems.

 

I'll paint a scenario that lets Vlad completely shaft us, and provides the perfect scenario for his standard modus operandi of blaming anything but himself.

 

In doing so I am aware that this might not always have been his intention as things have changed in the last 9 months - but remember that Vlad has been involved in the banking sector for a few years so he might just have known about the forthcoming problems.

 

The economy in the UK is currently on the turn, there are a few things currently happening which will likely have a direct impact upon the proposed stadium development:

 

1. the credit crunch

2. a drop in commercial property values

3. the start of businesses cutting costs

 

The credit crunch is meaning that you cant borrow large sums of money without some private equity involvement AND that the interest rates for that borrowing are higher than they were. If anyone thinks that Vlad wont need to borry the ?51m cost of this project they are in cloud cuckoo land. He might assume the risk but I doubt a single penny of his own money will go into this

 

He is therefore reliant upon either full 100% funding, or investment from a third party.

 

Com Prop prices are in free fall. I know for a fact that the only reason the proposed Stadium development is viable is because of the commericial property add-ons to the stand. The whole budget for the development will have been based upon a certain commercial property value at the end of the build. I think Com Prop prices are already down 25% from their peak with projections it will eventually be between 40-50%.

 

So far, therefore you have funding issues for the project, at the very best case scenario much more expensive financing costs, and you have an end product that might only be worth half of what it was forecast to be worth when this process started 2 years ago

 

If you were a third party with your own financing and business risks would you contribute any money to such a project?

 

Couple this with the fact that there will be a construction drain down to London for the olympics at the precise time we will need experienced stadium contractors AND that the cost of building materials and supplies are likely to inflate as a result of the commodity boom

 

BANG

 

The perfect excuse.

 

Planned or not, convenient or not, well intending or not.

 

What happens in the worst case scenario?

 

Well, the housing market downturn would affect 1. the number of housebuilders willing to invest in a new housing project which will contain exactly the sort of properties the market is currently flooded with - 2 bedroom flats, 2. even interested parties would not want to commit a lot of money for the land - we might not even get what Cala offered 4 years ago

 

Scary stuff.

 

If Vlad is genuinely a good business man and genuinely has the best long term intentions of the club at heart I would expect that he has no intention of starting construction - if he gets planning permission - for around 3 years.

 

At this stage credit should have stabilised, build costs will be lower in a depressed market, and there is a chance he will be getting in at the start of the next economic up-turn.

 

The sad thing is I dont believe either part of my italicised wording applies to Vlad

 

If he doesnt care a jot he gets out with as little a hit as possible and moves on. From a corporate perspective this would involve getting whatever assets he can out of the football club then allowing what is left to be liquidated.

 

Some might argue the process of maximising sales of assets from a club over a period is evidence of cost cutting, others might argue it is asset stripping....

[buzzbomb]

You are dawing a lot of conclusions there from something that is MY opinion.

 

I don't subscribe to YOUR opinion on what might ot might not have happened.

 

I also, NEVER mentioned getting "glassy-eyed" about Romanov.

 

However, if people want the club going down the swanny staying away is the right way to go about it. That is a FACT.

 

 

Rule by fear is never acceptable

 

NEVER

 

Who's to say that if we had moved to Murrayfield 3 years ago and cleared all but a small amount of our debt that we wouldnt be closer to the way Hibs have gone? ie proper development of youth players, good transfer income, and increasing profits.

 

People can argue that we might have gone bust after a move to Murrayfield - I personally cant see how but there you go.

 

NOBODY can say for a fact that we would have

 

Therefore NOBODY can get all glassy eyed on a factual basis about the "fact" that Vlad saved us and we are therefore forever indebted to him.

 

He prevented us moving to Murrayfield (for the time being) nothing more.

[Jammy T]

 

However, if people want the club going down the swanny staying away is the right way to go about it. That is a FACT.

 

No its not. Not if you believe the claim that our debt isnt a problem and shouldnt be a concern.

 

All they would do is continue with this apparent cost cutting exercise, but more vigorously

 

By the way dont take things so personally, just because I quoted you does not mean every word I typed was directed at you

[Guest Freewheelin' Jambo]

I was hoping this thread would not get waylaid with the usual rows over facts and figures and peoples interpretations of them according to their "stance".

 

I was all about taking a grip of the FOOTBALL side of the club before we end up in the First Division with the effects that would bring to our Club.

 

For me, a strong signal in the form of mass season-ticket non renewals is needed to try to force a change.

 

And that for me is a sacrifice necessary for the future of our Club.

[Jammy T]

I was hoping this thread would not get waylaid with the usual rows over facts and figures and peoples interpretations of them according to their "stance".

 

The Utopic JKB thread does not exist my friend.

 

It is impossible to discuss the state of our FOOTBALL club without discussions developing arms and legs

 

For example NMH excuses our gash football - its all part of a masterminded cost cutting exercise.

 

That argument holds no ice with the majority so you are drawn in to debating just how a team, even when cost cutting can do so much better than we are at present. Levein qualified for europe during heavy cost cutting for example

 

But I agree entirely with your point - far too many people in defending Vlad are concentrating on the fact that we are still at Tynie, or we cant expect too much until the new stand is built, or at least we are now running like a proper business

 

Heart of Midlothian is a football club first and foremost. I support a team that plays football, not a stadium, not a balance sheet and not a Club Superstore.

 

No matter what else is going on in the background. No matter what investment might be needed for us to really take off there is no excuse for a club of Hearts relative financial position to be playing god awful football for 2 seasons and failing to make Europe in either

 

The SPL is such a mediocre league that you only really need a good manager, a good defence and a budget of around ?3-5m playing costs to get into Europe.

 

There is absolutely no excuse for our current footballing demise no matter what else is going on in the background

[Guest Freewheelin' Jambo]

The Utopic JKB thread does not exist my friend.

 

It is impossible to discuss the state of our FOOTBALL club without discussions developing arms and legs

 

For example NMH excuses our gash football - its all part of a masterminded cost cutting exercise.

 

That argument holds no ice with the majority so you are drawn in to debating just how a team, even when cost cutting can do so much better than we are at present. Levein qualified for europe during heavy cost cutting for example

 

But I agree entirely with your point - far too many people in defending Vlad are concentrating on the fact that we are still at Tynie, or we cant expect too much until the new stand is built, or at least we are now running like a proper business

 

Heart of Midlothian is a football club first and foremost. I support a team that plays football, not a stadium, not a balance sheet and not a Club Superstore.

 

No matter what else is going on in the background. No matter what investment might be needed for us to really take off there is no excuse for a club of Hearts relative financial position to be playing god awful football for 2 seasons and failing to make Europe in either

 

The SPL is such a mediocre league that you only really need a good manager, a good defence and a budget of around ?3-5m playing costs to get into Europe.

 

There is absolutely no excuse for our current footballing demise no matter what else is going on in the background

 

It was not aimed at you Jammy. NMH/Charlie likes to push his facts and figures onto everything and is an accomplished thread stealer.

 

No matter how he embelishes statistics, its FOOTBALL that we are in this for and that is getting lost sight of. He has never and will never convince me that Romanov is capable of running that part of the operation, the most VITAL part.

 

Unless FIRM CONTROL is taken IMMEDIATELY we are heading for disaster, regardless of how much "backing" Romanov gives us financially.

 

And "backing" from a man I would not trust an inch.

[Guest JamboRobbo]

For me, a strong signal in the form of mass season-ticket non renewals is needed to try to force a change.

 

And that for me is a sacrifice necessary for the future of our Club.

 

Never thought I'd say it, but I now think I agree with you on this.

 

I'll be avoiding the next 3 games to make a point. And I won't renew my ST until the board do what we said we'd do on Jan 1st - appoint a manager worthy of the title. (i.e not Frail, not a Vlad puppet).

 

The more fans who do the same, the more chance it'll make a difference.

[Guest Freewheelin' Jambo]

Never thought I'd say it, but I now think I agree with you on this.

 

I'll be avoiding the next 3 games to make a point. And I won't renew my ST until the board do what we said we'd do on Jan 1st - appoint a manager worthy of the title. (i.e not Frail, not a Vlad puppet).

 

The more fans who do the same, the more chance it'll make a difference.

 

The fact a guy like you has said this about ST's gives me real hope.

 

I have never said do not go back. Just don't give money up front.

 

A half empty stadium makes a bigger point. Or it should to a sane man.

[maroonedinoz]

CorporalJones used to say on Dad's Army..."Don't Panic, Don't Panic"

 

Methinks though, its too late for panic, and we must just accept whatever Vlad does to us or takes us because there i sabsolutley SFA that we can do about it now.....

[Boaby Ewing]

The providers of Hearts debts will be listed in the accounts or in the notes to the accounts (and any changes) for that accounting period.

 

It is possible that some or all of Hearts debt has been transferred or assumed by UBIG and the talk of debt / equity conversion would lend some credence to that - however Ukio certainly acquired the majority of the HBOS debt and were the major provider of finance for the previous year - so even if it has subsequently been moved elsewhere within Romanov's group - he still had to get provided with that 'loan' initially so my point about providing adequate business plans and security to ensure the bank was repaid / secure would still have to have been provided.

 

From SMG Plc's final results, 2006

 

"On 20 October 2005, the Group announced the sale of its 19.9% stake in Heart of Midlothian plc ("Hearts") to Heart of Midlothian 2005 Limited, a company wholly owned by UAB Ukio Banko Investicine Grupe ("UBIG") at a consideration of #0.9m, or 35p per share.

 

The Group also entered into an agreement for the disposal of its entire holding of convertible loan stock in Hearts to UBIG for a consideration of #1.8m plus accrued interest. The disposal resulted in a net gain of #2.3m to the Group after disposal costs of #0.4m.

In 2006, the write back of a provision for legal and professional fees relating

to the sale resulted in a net gain of #0.4m."

 

I'm taking the '#' symbol to mean '?' given they were reporting in the UK.

 

So Vlad's PRIVATE company bought out the debt as far as I can see, not the listed Ukio Bankas.

[Tommy Walker]

I'll paint a scenario that lets Vlad completely shaft us, and provides the perfect scenario for his standard modus operandi of blaming anything but himself....

 

In doing so I am aware that this might not always have been his intention as things have changed in the last 9 months - but remember that Vlad has been involved in the banking sector for a few years so he might just have known about the forthcoming problems.

 

The economy in the UK is currently on the turn, there are a few things currently happening which will likely have a direct impact upon the proposed stadium development:

 

1. the credit crunch

2. a drop in commercial property values

3. the start of businesses cutting costs

 

The credit crunch is meaning that you cant borrow large sums of money without some private equity involvement AND that the interest rates for that borrowing are higher than they were. If anyone thinks that Vlad wont need to borry the ?51m cost of this project they are in cloud cuckoo land. He might assume the risk but I doubt a single penny of his own money will go into this

 

He is therefore reliant upon either full 100% funding, or investment from a third party.

 

Com Prop prices are in free fall. I know for a fact that the only reason the proposed Stadium development is viable is because of the commericial property add-ons to the stand. The whole budget for the development will have been based upon a certain commercial property value at the end of the build. I think Com Prop prices are already down 25% from their peak with projections it will eventually be between 40-50%.

 

So far, therefore you have funding issues for the project, at the very best case scenario much more expensive financing costs, and you have an end product that might only be worth half of what it was forecast to be worth when this process started 2 years ago

 

If you were a third party with your own financing and business risks would you contribute any money to such a project?

 

Couple this with the fact that there will be a construction drain down to London for the olympics at the precise time we will need experienced stadium contractors AND that the cost of building materials and supplies are likely to inflate as a result of the commodity boom

 

BANG

 

The perfect excuse.

 

Planned or not, convenient or not, well intending or not.

 

What happens in the worst case scenario?

 

Well, the housing market downturn would affect 1. the number of housebuilders willing to invest in a new housing project which will contain exactly the sort of properties the market is currently flooded with - 2 bedroom flats, 2. even interested parties would not want to commit a lot of money for the land - we might not even get what Cala offered 4 years ago

 

Scary stuff.

 

If Vlad is genuinely a good business man and genuinely has the best long term intentions of the club at heart I would expect that he has no intention of starting construction - if he gets planning permission - for around 3 years.

 

At this stage credit should have stabilised, build costs will be lower in a depressed market, and there is a chance he will be getting in at the start of the next economic up-turn.

 

The sad thing is I dont believe either part of my italicised wording applies to Vlad

 

If he doesnt care a jot he gets out with as little a hit as possible and moves on. From a corporate perspective this would involve getting whatever assets he can out of the football club then allowing what is left to be liquidated.

 

Some might argue the process of maximising sales of assets from a club over a period is evidence of cost cutting, others might argue it is asset stripping....

 

IMHO good post

 

VR is into banking...not looking good unless you're JPMorgan / part of the elite insiders

 

VR is into commodities...not looking particularly good short term, long term probably yes but the credit crunch is here now

 

VR is into property... the short / even intermediate prospects for property are not that great

 

VR is into football...and Hearts is his #1 priority ???

 

having said that, I've still no idea what VR's trying to do with Hearts but from any perspective...football / financial / whatever...what exactly does he hope to achieve ???

 

yours in 'despondency but can't get Hearts out of the blood / spirit'

 

TW

[missed98]

Rule by fear is never acceptable

 

NEVER

 

Who's to say that if we had moved to Murrayfield 3 years ago and cleared all but a small amount of our debt that we wouldnt be closer to the way Hibs have gone? ie proper development of youth players, good transfer income, and increasing profits.

People can argue that we might have gone bust after a move to Murrayfield - I personally cant see how but there you go.

 

NOBODY can say for a fact that we would have

 

Therefore NOBODY can get all glassy eyed on a factual basis about the "fact" that Vlad saved us and we are therefore forever indebted to him.

 

He prevented us moving to Murrayfield (for the time being) nothing more.

 

Well, I'm going to say it, moving to Murrayfield would have put us out of business.

 

1. We would not be debt free, if memory serves, once costs etc.. were taken into consideration, HMFC would still have been in around $5M (pounds, sorry key not working) debt, with no fixed assets to borrow against. ST sales would undoubtedly have reduced as there would be no need of them at Murrayfield, crowds therefore likely to drop. No atmosphere (Don't think anyone can now argue with that) again negative impact on crowds.

 

Arguably in the long term, we could have taken the Hibs route, but our problems were short term. Even servicing our reduced debt would have been crippling, we would have been borrowing at much higher rates as we would have had no assets.

 

We would have been at the mercy of Murrayfield for somewhere to play, if they pulled the plug or upped the rent, what then? There was no long term plan.

 

Our youth setup at the time was not producing enough quality players. Other than Gordon, who else have we made money off in the past 5 years?

 

Also, knowing Pieman, he would have sold off any good prospects we had for a fraction of their worth (Anti Niemmi springs to mind).

 

Moving to Murrayfield with Robinson in charge, would have been the start of the end.

 

Mind you, I'm not sure we're any further forward and fwiw, yes, I agree, we should not be forever indebted to him for that.

[Geoff Kilpatrick]

The Murrayfield revisionism is scary. I wasn't against it per se but I was against it with Robinson in charge. However, no one on this thread would give two flying ones about debt or the football side if Vlad was acting 'normally', i.e. spending big to chase the dream or cutting costs to get things on an even keel. The fact is that because no one actually knows or understands what he is doing engenders apprehension amongst our fans, which is exacerbated by the media, because they don't understand either so foster a perception that he is somehow "at it".

 

The truth is that it is time to lay theories aside and time to see some action to build a far better coaching and playing staff for the new season. The consequences for the alternative are not appealing at all.

[missed98]

The Murrayfield revisionism is scary. I wasn't against it per se but I was against it with Robinson in charge. However, no one on this thread would give two flying ones about debt or the football side if Vlad was acting 'normally', i.e. spending big to chase the dream or cutting costs to get things on an even keel. The fact is that because no one actually knows or understands what he is doing engenders apprehension amongst our fans, which is exacerbated by the media, because they don't understand either so foster a perception that he is somehow "at it".

 

The truth is that it is time to lay theories aside and time to see some action to build a far better coaching and playing staff for the new season. The consequences for the alternative are not appealing at all.

 

I assume that comment is not aimed at me?

 

I am at a loss as to how so many KBers have forgotten what was about to happen to the club 3 years ago. It's not a defence of Vlad, but we were heading for a deep dark hole and people should not forget that.

[jambovambo]

 

The truth is that it is time to lay theories aside and time to see some action to build a far better coaching and playing staff for the new season. The consequences for the alternative are not appealing at all.

 

The thing is - we can do the first one, but have no say in achieving the second.

[Guest Freewheelin' Jambo]

The Murrayfield revisionism is scary. I wasn't against it per se but I was against it with Robinson in charge. However, no one on this thread would give two flying ones about debt or the football side if Vlad was acting 'normally', i.e. spending big to chase the dream or cutting costs to get things on an even keel. The fact is that because no one actually knows or understands what he is doing engenders apprehension amongst our fans, which is exacerbated by the media, because they don't understand either so foster a perception that he is somehow "at it".

 

The truth is that it is time to lay theories aside and time to see some action to build a far better coaching and playing staff for the new season. The consequences for the alternative are not appealing at all.

 

I do not believe it is revisionism as there was debates going back and forth about people not caring where Hearts played, they would watch them regardless.

 

After 3 years there would have been some talk of a stadium development from somewhere. I cannot accept that there would not have been.

 

And its open to question also whether our position then is any more precarious with nearly 1.5 times the debt.

 

The FOOTBALL side was healthier then and we were not heading in a downward spiral on that front.

 

Football is what matters most now. That is my major concern.

[Martin_T]

Well even if you consider UKIO Bankas to be less than 'credible' which you are entitled to your opinion - they still had to advance Romanov loans of their depositors (creditors) money therefore they are still governed by banking laws & fidiciary duties - there would have to be business plans & securities put in place to protect the Bank & their customers - they couldn't just say "go ahead Vlad fill yer boots" could they?

 

The problem is that they pretty much have. No bank worth it's salt would have even considered Hearts as any kind of 'investment' 3 years ago, assets barely covering debt, persistent losses and the imminent requirement to repay loan stock that was essentially going to finish the business.

 

In my opinion the only profit to be had from Hearts would have been to sell or develop residential property on the Tynecastle site immediately after having gained control. Now what is he faced with? A business in greater debt and a slowing to the point of decline property market. I honestly don't know to what extent Romanov personally holds influence over Ukio Bankas/ Ubig, but again in my opinion, no normal bank would have allowed this level of expenditure given the circumstances.

 

As for the fabled solution of an expanded Tynecastle, can anyone honestly see income increasing above at a greater proportion than the interest payments on the huge debt that the club would be saddled with? Suggestions that this would enable the club to pay off the debt are pure fantasy, a mon avis of course.

[Charlie-Brown]

A report concerning the January 2006 AGM and some key points.....

 

Despite Romanov's buy-out, Murrayfield continues to looms large in the club's future. Talks are ongoing with the SRU about Hearts spending a season at the rugby stadium while the main stand at Tynecastle is rebuilt. It is unclear whether it will be next season or 2007-08. Work on a new stand is due to begin when the current season ends but time is running out to receive the necessary planning consents and the club has conceded the project may be delayed.

 

"We plan to increase Tynecastle's capacity to 25,000 to 26,000 and do it as soon as possible," Roman Romanov said. "We're working very closely with the city council and the architects and we have rough concept of what we want to do.

 

"We plan to knock down the old stand by the end of the season but the time frame means we could miss the summer and another year is missed. If it's not [started this summer] we'll have to do it in the next break, in 2007."

 

The current main stand at Tynecastle was built in 1914 at a cost of ?12,178 and remains the one side of the ground that has not been rebuilt. The success the club has achieved this season has stimulated huge interest among supporters and almost all games at Tynecastle have been sold out to home fans.

 

The board is keen to increase the capacity as quickly as possible to capitalise on the renewed interest but is conscious of the disruption caused by uprooting the team from Tynecastle. One option is to remain at the Gorgie ground while the work takes place but the potential loss of revenue is likely to militate against this.

 

"We'll probably need to move for one season to Murrayfield or play [at Tynecastle] with three stands," Romanov said. "But there are cost implications of playing in front of three stands. We may sell more tickets if we play at Murrayfield."

 

The chairman said the accounts of Hearts and UBIG would become "common" from next year. It effectively means Hearts' debt will be swallowed up into the wider UBIG group, and for as long as that group as a whole remains profitable, Hearts' debt should not cause undue concern.

 

Romanov junior also stressed that UBIG does not plan to keep financing a loss-making Hearts from the profits of other parts of the group and it expects the club to break even. "Vladimir can support the club with his own money but our goal is to make Hearts a balanced company," said the chairman.

 

full article http://sport.scotsman.com/heartofmidlothianfc/Murrayfield-to-stage-Hearts-European.2746197.jp

 

From that I would take that the Stadium is / was key to everything and the delay in that put the brakes on spending & change in policy that was apparent between 2005-06 and 2006-07 and subsequent seasons.

 

It still doesn't excuse the rubbish football we've had to watch but it does help explain why the better players (high earners) have all been sold or left and replaced with lower cost players.

[sealpup]

I really do not think Vlad will walk away.

I beieve if he does he will loose close on ?10 million personally.

Why would you do that when you are a successful businessman.

We all were mystified re Burley when he left as it was the best football and that team could have brought more if we had built on it. Why did Vlad stop it. It seems he likes control, fair enough.

I really feel this season is crucial to Vlad and Hearts.

If next season is anything like this season next to no one will buy a season ticket for Murrayfield, Why would you.

He has to take this into account for next season.

I just wish we could understand the man.

I pray the football is better than this season, otherwise the worst investment of ?425 I will make and the pub seems much more appealing than watching this season.

Keep the fingers crossed.

[missed98]

I do not believe it is revisionism as there was debates going back and forth about people not caring where Hearts played, they would watch them regardless.

 

After 3 years there would have been some talk of a stadium development from somewhere. I cannot accept that there would not have been.

 

And its open to question also whether our position then is any more precarious with nearly 1.5 times the debt.

 

The FOOTBALL side was healthier then and we were not heading in a downward spiral on that front.

 

Football is what matters most now. That is my major concern.

 

This entire post is revisionism.

 

Talk of a stadium development, funded by whom?

 

The hard core yes would have gone and watched them play, not enough to turn a profit....

 

The football side was healthier then...eh, with the 3rd largest wage bill, which we wouldn't have been able to maintain, remember we were losing money EVERY year with pieman in charge, the wage bill would have been SLASHED !

[Guest JamboRobbo]

From that I would take that the Stadium is / was key to everything and the delay in that put the brakes on spending & change in policy that was apparent between 2005-06 and 2006-07 and subsequent seasons.

 

I think thats just another in a long line of excuses that have been made up to try and justify the actions.

 

The stadium was never going to be build instantly and they knew that fine well from day one.

 

I think they don't have much of a clue what they are up to, had a go at it, messed it all up, then had a rethink, then messed it all up again, then had a panic, then messed it all up again, then had another panic, and a few more tries, then another panic, and then we reach where we are today.

[MrH]

Good opening post that sums up most of our emotions I'd imagine. The only thing I'd disagree with is the comment about the current squad being the worst we've had in 25 years. I do think that's off the mark - just consider some of the squads we've actually had during that time - we've definitely had worse.

 

Aso, in terms of players, how do we actually know how good or bad they are given how poorly they've been managed? Maybe a decent manager would come in and be able to get the very best out of someone like Miko or Stewart(or whoever), and maybe even encourage Kingston to put a shift in. I know exactly why you think the squad is pesh, but I'm not sure their poor performances truly reflect their abilities.

[gowestjambo]

Never thought I'd say it, but I now think I agree with you on this.

 

I'll be avoiding the next 3 games to make a point. And I won't renew my ST until the board do what we said we'd do on Jan 1st - appoint a manager worthy of the title. (i.e not Frail, not a Vlad puppet).

 

The more fans who do the same, the more chance it'll make a difference.

 

This is my stated stance on the subject as well. I cannot understand why so many meekly stand by, when this is the ONLY opportunity we have to make our point!! (and if it costs me extra for mine and 2 sons S/T's fine, it is a small price to pay IMO)

[Geoff Kilpatrick]

I do not believe it is revisionism as there was debates going back and forth about people not caring where Hearts played, they would watch them regardless.

 

The revisionism refers to those who were emphatically opposed to Murrayfield now thinking that maybe it wasn't that bad a thing after all, so that Vlad would never have taken charge - I think we forget how much we were struggling before he bought the shares. We had just peaked in the UEFA League and CL had decided to pick up some players for buttons. Until the Lithuanian arrivals and Lee Miller arrived, thanks to the Romanov funds, we were down to the bare bones. There would have been no 'euphoria' of a Cup win or Champions League qualification had we gone to Murrayfield, even if we had a new board. The frugality demanded from the asset sale would have seen that squad decimated further.

 

After 3 years there would have been some talk of a stadium development from somewhere. I cannot accept that there would not have been.

 

There would have been talk but given that the CALA payments for the stadium wouldn't have come through, coupled with a change of council and sporting development policy, we can conclude that we would be no further forward.

 

And its open to question also whether our position then is any more precarious with nearly 1.5 times the debt.

 

1.5 times the debt owed to the same guy that is writing the cheques is a far better position than to owe less debt to someone calling it in.

 

The FOOTBALL side was healthier then and we were not heading in a downward spiral on that front.

 

Football is what matters most now. That is my major concern.

 

As I said above, the football side was only healthier in that we had a manager (and sadly, playing legend that he was, a very average one). That said, the football on the park is my major concern too, and that is where change is required.

 

N.B. Missed98 - it wasn't aimed at you.

[Martin_T]

A report concerning the January 2006 AGM and some key points.....

 

Despite Romanov's buy-out, Murrayfield continues to looms large in the club's future. Talks are ongoing with the SRU about Hearts spending a season at the rugby stadium while the main stand at Tynecastle is rebuilt. It is unclear whether it will be next season or 2007-08. Work on a new stand is due to begin when the current season ends but time is running out to receive the necessary planning consents and the club has conceded the project may be delayed.

 

"We plan to increase Tynecastle's capacity to 25,000 to 26,000 and do it as soon as possible," Roman Romanov said. "We're working very closely with the city council and the architects and we have rough concept of what we want to do.

 

"We plan to knock down the old stand by the end of the season but the time frame means we could miss the summer and another year is missed. If it's not [started this summer] we'll have to do it in the next break, in 2007."

 

The current main stand at Tynecastle was built in 1914 at a cost of ?12,178 and remains the one side of the ground that has not been rebuilt. The success the club has achieved this season has stimulated huge interest among supporters and almost all games at Tynecastle have been sold out to home fans.

 

The board is keen to increase the capacity as quickly as possible to capitalise on the renewed interest but is conscious of the disruption caused by uprooting the team from Tynecastle. One option is to remain at the Gorgie ground while the work takes place but the potential loss of revenue is likely to militate against this.

 

"We'll probably need to move for one season to Murrayfield or play [at Tynecastle] with three stands," Romanov said. "But there are cost implications of playing in front of three stands. We may sell more tickets if we play at Murrayfield."

 

The chairman said the accounts of Hearts and UBIG would become "common" from next year. It effectively means Hearts' debt will be swallowed up into the wider UBIG group, and for as long as that group as a whole remains profitable, Hearts' debt should not cause undue concern.

 

Romanov junior also stressed that UBIG does not plan to keep financing a loss-making Hearts from the profits of other parts of the group and it expects the club to break even. "Vladimir can support the club with his own money but our goal is to make Hearts a balanced company," said the chairman.

 

full article http://sport.scotsman.com/heartofmidlothianfc/Murrayfield-to-stage-Hearts-European.2746197.jp

 

From that I would take that the Stadium is / was key to everything and the delay in that put the brakes on spending & change in policy that was apparent between 2005-06 and 2006-07 and subsequent seasons.

 

It still doesn't excuse the rubbish football we've had to watch but it does help explain why the better players (high earners) have all been sold or left and replaced with lower cost players.

 

It also does not excuse the gross financial negligence of the first two seasons based on a speculative long term income stream. Furthermore it does not excuse the failure to appoint qualified, professional, UK experienced coaching staff and team management (which by the January 1st statement, Romanov himself implicitly admits) to assist in player coaching, selection and improvement. If we'd had this, who knows we might have had some Champions League income to help balance the books. Sadly we had guys such as yourself condoning such a glaring failure on this very forum.

[Geoff Kilpatrick]

It also does not excuse the gross financial negligence of the first two seasons based on a speculative long term income stream. Furthermore it does not excuse the failure to appoint qualified, professional, UK experienced coaching staff and team management (which by the January 1st statement, Romanov himself implicitly admits) to assist in player coaching, selection and improvement. If we'd had this, who knows we might have had some Champions League income to help balance the books. Sadly we had guys such as yourself condoning such a glaring failure on this very forum.

 

Wait a minute here. Romanov has said in the past that he has given guarantees to the bank on the funding, which is why we get the subsidised rates of interest etc.

 

Whether you believe him is a different matter.

[walton1983]

Cutting 2 million of the wagebill would bring wages down to around turnover but that by no means we would be breaking even. 100% wage to turnover ratio is unworkable in the long term.

 

No easy way out of this one.

Turnover ?10m (maybe less next time)

Operating costs(excluding wages)around ?5.5m

Interest now around ?2m

That leaves around ?2.5m for wages.

I don't know what the current wage bill is but I can think of three players who never kicked a ball all season who cost us around ?1.5m alone.

Only gainer is the bank.

[buzzbomb]

Stop talking sense.

 

Remember all we had to do was find a bit of land, then Chris was going to take our stands that had been mothballed and put them around.

 

And we think the proposed new stand is pie in the sky!

 

 

 

 

 

This entire post is revisionism.

 

Talk of a stadium development, funded by whom?

 

The hard core yes would have gone and watched them play, not enough to turn a profit....

 

The football side was healthier then...eh, with the 3rd largest wage bill, which we wouldn't have been able to maintain, remember we were losing money EVERY year with pieman in charge, the wage bill would have been SLASHED !

[missed98]

Stop talking sense.

 

Remember all we had to do was find a bit of land, then Chris was going to take our stands that had been mothballed and put them around.

 

And we think the proposed new stand is pie in the sky!

 

Hee hee, i'd forgotten that gem.

 

Geoff - thx mate, didn't think it was, but was getting ready to rip right into you

[The Mighty Thor]

Do you really think it's credible that a bank (any bank) would give carte-blanche to spend tens of millions of pounds in 2-3 years without a coherent explanation of a) how that money is to be spent or how that money is to be repaid / the banks security on the money lent.

 

Excellent OP and a lot of really well reasoned argument.

 

My twopenneth worth, particularly on Charlie's point;

 

In terms of the 'financing' of Hearts and the whether the continuation of running such a high debt level is rational i would say this. If the quality of individuals employed at the bank/investment group in any way mirror the type of individuals Romanov has employed at Hearts and those individuals are given a master plan or business model similar to the one he has in place at Hearts then i would say that the guys at UKIO/UBIG wouldn't know a good or bad investment if it bit them on the arse. If UKIO Baknas were in any way competent they would have secured a UK banking license and that they haven't two years later speaks volumes.

 

The whole organisation is built on a foundation of nepotism and mates rates which is stereotypical of the old-school eastern bloc. Romanov is an Idi Amin type character in that he surrounds himself with people generally not qualified to do what they are paid to and usually too scared to say otherwise which leads to the inevitable failure of whatever he was trying to achieve, which he duly blames on absolutely everyone but himself.

 

There will be no trading out of the current hole, indeed the hole will only get bigger as the debt rises and the interest re-payments mount. The argument that vlad owns the hole doesn't wash with me either.

[Geoff Kilpatrick]

Excellent OP and a lot of really well reasoned argument.

 

My twopenneth worth, particularly on Charlie's point;

 

In terms of the 'financing' of Hearts and the whether the continuation of running such a high debt level is rational i would say this. If the quality of individuals employed at the bank/investment group in any way mirror the type of individuals Romanov has employed at Hearts and those individuals are given a master plan or business model similar to the one he has in place at Hearts then i would say that the guys at UKIO/UBIG wouldn't know a good or bad investment if it bit them on the arse. If UKIO Baknas were in any way competent they would have secured a UK banking license and that they haven't two years later speaks volumes.

 

The whole organisation is built on a foundation of nepotism and mates rates which is stereotypical of the old-school eastern bloc. Romanov is an Idi Amin type character in that he surrounds himself with people generally not qualified to do what they are paid to and usually too scared to say otherwise which leads to the inevitable failure of whatever he was trying to achieve, which he duly blames on absolutely everyone but himself.

 

There will be no trading out of the current hole, indeed the hole will only get bigger as the debt rises and the interest re-payments mount. The argument that vlad owns the hole doesn't wash with me either.

 

Agree with your personification of the 'Empire' but provided the rest of Romanov's empire makes more profit than Hearts lose, he can continue to run the club in this fashion.

 

Whether it is palatable to us as fans/customers is a different question.

 

PS Ukio is definitely in profit and the profits are increasing. No one knows the full extent of the rest of the Empire.

[Guest Freewheelin' Jambo]

There would have been talk but given that the CALA payments for the stadium wouldn't have come through, coupled with a change of council and sporting development policy, we can conclude that we would be no further forward.

 

That we willnever know for sure now. However we would be technically solvent.

 

I am personally now of the belief that the emotional attachment to Tynecastle means nothing compared to that of the tie Heart of Midlothian FC. It has taken three last two years to make me realise this and I think a lot of others have to.

 

I would gladly sacrifice Tynie for HEARTS. But that is past now and no use speculating

[davieholt]

There would have been talk but given that the CALA payments for the stadium wouldn't have come through, coupled with a change of council and sporting development policy, we can conclude that we would be no further forward.

 

That we willnever know for sure now. However we would be technically solvent.

 

I am personally now of the belief that the emotional attachment to Tynecastle means nothing compared to that of the tie Heart of Midlothian FC. It has taken three last two years to make me realise this and I think a lot of others have to.

 

I would gladly sacrifice Tynie for HEARTS. But that is past now and no use speculating

 

Sorry FJ I disagree entirely.

 

Tynie is one of the very few recognisable links with the 'Hearts' most of us grew up with and love. Without Tynie, we would be left with nothing but a foreign interfering owner and a bunch of temporary mercenaries being groomed for onward sale who happen to wear maroon and white.

 

Until we get our proper manager and the playing side stabilises, Tynie is one of the few reassurances that it really is Hearts that we are watching.