slfjambo Posted January 20, 2008 Share Posted January 20, 2008 By Ewan Murray THE issue of a spiralling debt is not something which, publicly at least, those at Heart of Midlothian have appeared altogether concerned about in recent times. Chairman Roman Romanov, in fact, went so far as to vehemently challenge a shareholder at last year's annual general meeting over how his own or any business could feasibly grow without borrowing. It is noteworthy, therefore, that the Hearts deputy chief executive, Pedro Lopez, has revealed his hope that the club can be debt-free within 15 years following the successful redevelopment of Tynecastle. "We would like to see that (the debt be eliminated] in 15 years, maybe 20," said Lopez as Hearts submitted their planning proposal for the ?51m project to rebuild their 122-year-old home on Thursday. "It also depends, of course, how successful we are on the pitch in that time." Lopez and his fellow staff on Hearts' management team have engaged in some number crunching in attempting to prove just how Tynecastle's new 10,000-seater main stand will prove financially viable. Increased ticket revenues of ?2.5m per season will help, along with cash generated from 20 executive boxes, a 1,000-seat restaurant, 2,000 hospitality seats while Hearts are also adamant the stadium should be used for international challenge matches. Sceptics who feel the club will struggle to fill 23,000 seats should look to Derby County and Sunderland who have improved crowd figures thanks to new facilities. The problem is that Hearts are already carrying a substantial debt but Lopez denied the club have moved close to the ?40m borrowing figure agreed a year ago. Sales of Craig Gordon, Rudi Skacel and Paul Hartley generated nearly ?10m, but "we have not used it" said Lopez. Nonetheless, thoughts of what may realistically be a ?70m debt being cleared within the time scale stated remain optimistic. Sensibly, Hearts are also yet to pay the City of Edinburgh Council ?1.8m for the adult learning centre and nursery which sit adjacent to Tynecastle; that cash will be paid once planning consent for the stand's redevelopment has been granted. Lopez denies the Gorgie outfit are in danger of emulating Manchester United, whose profits in excess of ?60m merely serve to pay interest on huge borrowings. The next scrutiny of Hearts' finances will arrive within three weeks, with the publication of their accounts for financial year 2006/7 and AGM 28 days later. "We are not aiming to be owned by banks," insisted Lopez. "We are doing this (rebuilding the stand] to make the club more financially viable and independent in the longer-term. "You need to bear in mind that this development, one is the stand and one is the building in front. With the building in front we will have partners so that debt won't be ?51m. It will also help bring extra revenue to the club. The stand will enhance economical opportunities. "We have done our numbers and the revenue will be generated to serve the long term and drive investment to the squad. It should be able, over a period of time, to write off the debt we have at the moment, not increase." In backing up Lopez's theory, the stand itself will cost ?30m; Hearts hope a significant chunk of the remaining ?21m will be supplied from external companies who wish to utilise the commercial space which will sit on McLeod Street. "We hope to speak to the council again at beginning of February to see how things are going," Lopez explained. "We are working closely with them. We hope to have the stand in place during season 2010/11. The council can still say no, but we think that's very unlikely to happen." Certain modifications to the plan are almost inevitable. Hearts are also likely, along with the Scottish Rugby Union, to be asked to contribute towards the tram stop planned for nearby Stevenson Road. It is to the club's credit that, amid a dismal league season, they have not taken what would be an easy option of saying football must take a back seat while the stadium plan is financed. "The emphasis on the football side will be stronger and stronger," said Lopez. "We also realise in order to achieve our long-term view and vision of the club of being a European club, successful club, big club, we need to have success and good facilities and we are working on these aspects at the same time. "We are putting in place measures now to improve the situation on the field. Our longer-term ambition is Europe and to be challenging, that's where we want to be." The long-term commitment of Vladimir Romanov, therefore, should not, according to Lopez, be questioned by disillusioned supporters at this time. The full article contains 802 words and appears in Scotland On Sunday newspaper. Link to comment Share on other sites More sharing options...
StAndrewsHMFC Posted January 20, 2008 Share Posted January 20, 2008 Hmmmm clearing ?70m in 15-20 years is very ambitious given our current turnover +?2.5m. Even if there is no interest. I would also question just how viable a commercial centre is on McLeod street Two things that could help though-What % of shaes does Romanov own now? Could he not have a share issue and subscribe to say 50% of to raise non debt funds and maitain his majority. Also wouldn't be against stadium sponsorship- although Ukio Bankas Stadium doesn't sound great Link to comment Share on other sites More sharing options...
1874robbo Posted January 20, 2008 Share Posted January 20, 2008 Hmmmm clearing ?70m in 15-20 years is very ambitious given our current turnover +?2.5m. Even if there is no interest. I would also question just how viable a commercial centre is on McLeod street Two things that could help though-What % of shaes does Romanov own now? Could he not have a share issue and subscribe to say 50% of to raise non debt funds and maitain his majority. Also wouldn't be against stadium sponsorship- although Ukio Bankas Stadium doesn't sound great The biggest percentage will come from future player sales. Link to comment Share on other sites More sharing options...
PTBCAL Posted January 20, 2008 Share Posted January 20, 2008 Hmmmm clearing ?70m in 15-20 years is very ambitious given our current turnover +?2.5m. Even if there is no interest. I would also question just how viable a commercial centre is on McLeod street Two things that could help though-What % of shaes does Romanov own now? Could he not have a share issue and subscribe to say 50% of to raise non debt funds and maitain his majority. Also wouldn't be against stadium sponsorship- although Ukio Bankas Stadium doesn't sound great Turnover not ?10m? Link to comment Share on other sites More sharing options...
Craig_ Posted January 20, 2008 Share Posted January 20, 2008 Hmmmm clearing ?70m in 15-20 years is very ambitious given our current turnover +?2.5m. Even if there is no interest. I would also question just how viable a commercial centre is on McLeod street Two things that could help though-What % of shaes does Romanov own now? Could he not have a share issue and subscribe to say 50% of to raise non debt funds and maitain his majority. Also wouldn't be against stadium sponsorship- although Ukio Bankas Stadium doesn't sound great Looks like a lot more than ?2.5m extra: "Increased ticket revenues of ?2.5m per season will help, along with cash generated from 20 executive boxes, a 1,000-seat restaurant, 2,000 hospitality seats" Incidentally, kudos to the SoS for actually writing a balanced piece on the new stand, unlike any other stories I've seen! Link to comment Share on other sites More sharing options...
awadooningorgie2 Posted January 20, 2008 Share Posted January 20, 2008 Interestingly this thread must have attracted approx 1% of the interest shown in the admisnistration threads of last week. Link to comment Share on other sites More sharing options...
coppercrutch Posted January 20, 2008 Share Posted January 20, 2008 Looks like a lot more than ?2.5m extra: "Increased ticket revenues of ?2.5m per season will help, along with cash generated from 20 executive boxes, a 1,000-seat restaurant, 2,000 hospitality seats" Incidentally, kudos to the SoS for actually writing a balanced piece on the new stand, unlike any other stories I've seen! I know, I was shocked, but fair play. We can abuse them when they spew pish. But we have to admit when they do something decent for once !! Link to comment Share on other sites More sharing options...
Rawrrrrrrr Posted January 20, 2008 Share Posted January 20, 2008 We should just sell the asset to a fund and lease it back long term The whole portfolio would easily be worth over 100+ mil Sell it to a pension fund or the like and get a 100 year recurring lease on it Debt gone in a oner and a nice reserve left for a few players or the like Link to comment Share on other sites More sharing options...
starcatcher Posted January 20, 2008 Share Posted January 20, 2008 doesn't sound like a bad idea to be honest. Link to comment Share on other sites More sharing options...
Dave 1974 Posted January 20, 2008 Share Posted January 20, 2008 Just like Chelsea will break even by 2010........my erse. Link to comment Share on other sites More sharing options...
coppercrutch Posted January 20, 2008 Share Posted January 20, 2008 We should just sell the asset to a fund and lease it back long term The whole portfolio would easily be worth over 100+ mil Sell it to a pension fund or the like and get a 100 year recurring lease on it Debt gone in a oner and a nice reserve left for a few players or the like Only one problem with that. Commercial property is nosediving right now. Investors in some funds have been locked in for 12 months to stop them all stampeding for the exits !! Link to comment Share on other sites More sharing options...
Ryan Gosling Posted January 20, 2008 Share Posted January 20, 2008 I know, I was shocked, but fair play. We can abuse them when they spew pish. But we have to admit when they do something decent for once !! That's because a Jambo wrote it. Link to comment Share on other sites More sharing options...
K1874M Posted January 20, 2008 Share Posted January 20, 2008 That's because a Jambo wrote it. lol beat me to it.... Link to comment Share on other sites More sharing options...
davemclaren Posted January 20, 2008 Share Posted January 20, 2008 Only one problem with that. Commercial property is nosediving right now. Investors in some funds have been locked in for 12 months to stop them all stampeding for the exits !! I don't think nosediving is the correct word but it is on the way down. Anyone that thinks ANY class of asset will permanently be on the rise is a fool. However, I'm sure a lot of property developers are reviewing their investment plans for 2008 as we speak. Who knows what affect that may have on VR's business case and could possibly explain the apparent start date being 2009? Link to comment Share on other sites More sharing options...
Emma Posted January 20, 2008 Share Posted January 20, 2008 I like the way Pedro Lopez just flippantly dismisses 5 whole years ... 15 maybe 20 ... and I'm a bit confused about the other 5 years he regulary mentions now too. Are we currently 3 years into a 5 year plan already? Or has the 5 year year plan we've been hearing about since Vladimir Romanov came to Hearts only actually started on January 1st 2008? :wacko:Number crunching???? Link to comment Share on other sites More sharing options...
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