Ann Budge update

[Boris]

Prosecco - Champers for scaffs

Not really.

 

Completely different grape and taste as far as I am aware.

[Footballfirst]

The ?750k interest figure in my last post is wrong and should have read c. ?620k. I was too late to edit it.

[Jamos]

The ?750k interest figure in my last post is wrong and should have read c. ?620k. I was too late to edit it.

 

You do realise that by getting the figures incorrect by the odd ?130k and then changing it, makes the rest of your post highly dubious too ...... I mean we all love the work of creative accountants but to post figures as fact and then amend with a 6 figure miscalculation is just a bit silly

[Mars plastic]

Not really.

Completely different grape and taste as far as I am aware.

Of course it tastes different.

[i wish jj was my dad]

You have to remember though that she didn't actually want to buy the club, just like numerous other wealthy Hearts fans didn't (and you can be sure there are a significant number of fans who could have afforded to either buy it on their own or as part of a consortium). She stepped up to the plate to provide the FoH with the funds and expertise to get the deal done to save the club. There was nobody else that looked like doing so if she hadn't. You're as well saying you'd rather she hadn't bothered and the club had died, because the money to save it wasn't going to be there if she hadn't got involved.

 

As for the stand, AB herself has said she'd have preferred to wait and not rush into the project, but the council was preparing plans to knock down the old nursery and build a new one in its place, and if they'd done that, it would have been impossible for us to then build something of anything like the size, and with anything like the facilities, of the one we are building. Taking our time and building a new main stand a bit further down the line would only have been an option in a fantasy world that none of us actually inhabit. You even say as much yourself, but seem to struggle to grasp what a 'one-off opportunity' actually means! You might as well complain that when the pitch was relaid a few months ago, we didn't use grass that naturally grows in a maroon colour.

Excellent post. 

 

Will be ignored by the bitter and twisted amongst us though.

[Boab]

Of course it tastes different.

 

Now, you....no more champers stories !

 

Prosecco is nice !

[i wish jj was my dad]

I particularly liked the post where you called Ann an old ***** and that Levein is probably ******* her. Pretty immature and pathetic thing to post about the person who saved our club imo. There you go though.

He seriously never???? Is that for real?

 

Deary, deary me (as some hun pricks are apt to say).

[Mars plastic]

Now, you....no more champers stories !

 

Prosecco is nice !

Have a nice Laurent Perrier 2007 for tomorrow's trip to Glasgow. Highly recommended.

[Boris]

Of course it tastes different.

Indeed, so why the comparison?

[Mars plastic]

Indeed, so why the comparison?

A clever chap like you should know why there's a comparison. They're not stocked on the same shelves for nowt.

[Nucky Thompson]

Anyone with huge amounts of savings that doesn't have a very substantial amount of that money in higher risk investments than bonds is an idiot!

Higher risk being the operative word.

How many people have lost their life savings when those 'good thing' higher risk investments have went tits up?

[Pans Jambo]

A clever chap like you should know why there's a comparison. They're not stocked on the same shelves for nowt.

Champagne is over rated elitist pish and Prosecco tastes better and you know it!

 

(Nothing like highjacking a thread to waffle shite)

[Francis Albert]

You do realise that by getting the figures incorrect by the odd ?130k and then changing it, makes the rest of your post highly dubious too ...... I mean we all love the work of creative accountants but to post figures as fact and then amend with a 6 figure miscalculation is just a bit silly

ann got the stand budget wrong by a bigger margin and presumably took more than a few minutes to correct it. Ann told us the delay in the stand was due to factors outside our control. By the standards you apply to FF how much credence should we give to what ann says? Personally i wouldn't be that hard on her.

[socrates82]

FoH got a good deal. (The fans who are not FoH members got an even better deal.)

 

Ann got a better deal than FoH (in terms of financial reward : FoH roughly minus ?9m, Ann roughly breaking even) but having the ?2.4m or ?2.8m put her in a much stronger negotiation position than FoH and so she deserved to.

 

For those who struggle with more complex thoughts than "Ann is wonderful" the one word answer is NO

Are you taking into account the "opportunity costs" outlined by another poster, ie her money tied up in hearts instead of mire lucrative ventures, her business acumen and management time being given for no fee or salary, etc?

[Bad Religion]

ann got the stand budget wrong by a bigger margin and presumably took more than a few minutes to correct it. Ann told us the delay in the stand was due to factors outside our control. By the standards you apply to FF how much credence should we give to what ann says should we give? Personally i wouldn't be that hard on her.

Where did Ann get the stand budget wrong?

[Geoff Kilpatrick]

Are you taking into account the "opportunity costs" outlined by another poster, ie her money tied up in hearts instead of mire lucrative ventures, her business acumen and management time being given for no fee or salary, etc?

So does that mean you think this was a bad deal for her?

 

Honestly, it's like some people want to portray her as a martyr or something.

[Mars plastic]

Champagne is over rated elitist pish and Prosecco tastes better and you know it!

 

(Nothing like highjacking a thread to waffle shite)

The thread has 11 pages of waffle. I thought it time it went in a different direction.

 

Had a couple of glasses of Prosecco on the way back from Aberdeen last season. Tastes like the cheap plonk that it is.

[scott herbertson]

So does that mean you think this was a bad deal for her?

Honestly, it's like some people want to portray her as a martyr or something.

Depends on what you mean. By 'bad' - she could have got 6 or 7% for her money I would have thought through investment, with no hassle at all and no risk (also no personal exposure on social media/ public interest - I wouldn't underestimate the value of the quiet enjoyment of life)

 

Instead she's had a whole lot of hassle and stress, as well as having to put in what I suspect are long hours at her age.

 

 

Personally I retired a couple of years early rather than face the increasing stress at work and some issues at home. I'm amazed at the energy and quality of her contribution and yes , I think we are VERY lucky to have had her around as I doubt we'd have had much of a club left had she not stuck her head above the parapet. I can accept the financial side and ignore a few mistakes (amongst the far greater number of successes) compare s to the joy of watchingHearts back in their proper pace in Scottish football, admired as a club with a sense of community and values, and building a great new stand.

[Beast Boy]

Not really.

 

Completely different grape and taste as far as I am aware.

Exactly.

[i wish jj was my dad]

Depends on what you mean. By 'bad' - she could have got 6 or 7% for her money I would have thought through investment, with no hassle at all and no risk (also no personal exposure on social media/ public interest - I wouldn't underestimate the value of the quiet enjoyment of life)

 

Instead she's had a whole lot of hassle and stress, as well as having to put in what I suspect are long hours at her age.

 

 

Personally I retired a couple of years early rather than face the increasing stress at work and some issues at home. I'm amazed at the energy and quality of her contribution and yes , I think we are VERY lucky to have had her around as I doubt we'd have had much of a club left had she not stuck her head above the parapet. I can accept the financial side and ignore a few mistakes (amongst the far greater number of successes) compare s to the joy of watchingHearts back in their proper pace in Scottish football, admired as a club with a sense of community and values, and building a great new stand.

Very good perspective.  I couldn't agree more.

[Francis Albert]

Where did Ann get the stand budget wrong?

i think we are running about 2 to 3m overbudget.

[Jamos]

ann got the stand budget wrong by a bigger margin and presumably took more than a few minutes to correct it. Ann told us the delay in the stand was due to factors outside our control. By the standards you apply to FF how much credence should we give to what ann says? Personally i wouldn't be that hard on her.

 

I am sure I saw Ann herself on the TV explaining the increase in costs as being down to her adding various design changes that she deemed will bring value in the long term. Why on earth anyone outside the club with no complete knowledge of the clubs accounting or finances would even try to state a case, negative or positive in here is beyond my comprehension. As for the standards set by FF ... I am guessing he isn't a qualified accountant for good reason!

[Bad Religion]

i think we are running about 2 to 3m overbudget.

 

So what you should have written is 'I think Ann got the stand budget wrong'?

[jockmac]

Apologies for not responding earlier, but I've been out all morning.

 

You make a fair point and there is a case for including the professional fees in Ann's investment column.  I did consider it, but chose not to as the transactions (?472k) were at zero cost to Ann.  She in effect engaged lawyers and accountants etc., to carry out due diligence and prepare legal and financial agreements on her behalf, then presented the bill to the club to pay.

 

There was no direct financial benefit to Ann, but their was certainly a cost to the club to help facilitate Ann taking ownership. However I see that financial assistance to gain ownership an indirect benefit to her, hence I included it the column of costs to the club at Ann's behest.

 

Taking the emotional attachment that fans have for their club to one side, Ann effectively bought a distressed business out of administration. She did so with the promise of turning round the business, then selling 75% of it onto FOH five years down the road, subject to FOH putting ?3.8m directly into the business, repaying the ?2.4m loan, paying ?100k for the shares (?6.3m in total), and the club paying her c. ?750k interest on the loan over the period.

 

Two years down the road and Ann's business recovery plan had exceeded all expectations, largely down to higher than expected ST sales and Match Day revenues off the back of on field success and of course FOH cash.  Ann embarked on an an ambitious project to build a new stand. She agreed with FOH that they provide a further ?3m towards funding the stand, but delays the transfer of ownership by 2 years.

 

Three years down the road, on field performance has gone backwards, we have an interim head coach, revenues are perhaps below forecasts for the first time, the stand costs have escalated, the opening date is delayed. This is Ann's first real test as owner.  I'd guess that it is relatively easy to run a business when revenues are buoyant and costs are predictable, but it's a much bigger challenge when there are obstacles to be overcome.

 

Let's say Ann succeeds in resolving the on field issues, revenue streams grow and funding issues are resolved. We get to the transfer of ownership. 

FOH will own 75.1% of a debt free club, with a shiny new stand, for a total investment of ?9.55m  (the initial ?3.8m ended up as ?4.05m, before the stand funding commenced). Ann will have 17.4% of the club for an outlay of ?19k, plus ?300k waived interest, plus her services as CEO/Chairman.

 

If we get to that position, then will I say that it was worth it?  Will I praise Ann's contribution? Will I praise FOH's contribution? ......  Yes, Yes and Yes.

 

On the other hand if on field performance doesn't meet expectations, revenue is sluggish and ongoing funding issues leaves the club in debt, and in need of further support from FOH

 

If we get to that position, then will I say that it was worth it?  Will I praise Ann's contribution? Will I praise FOH's contribution? ......  Yes (as the club has survived) , Only for her first two years, and Yes without a doubt.

Thanks FF for summarising, very informative and much appreciated.

[Jamos]

So what you should have written is 'I think Ann got the stand budget wrong'?

 

Or was it someone got the initial design wrong and Ann changed it .... will we ever know the complete factual details?

[Bad Religion]

Or was it someone got the initial design wrong and Ann changed it .... will we ever know the complete factual details?

 

Where does the wrong part come from? 

 

Could you not say the design evolved?

[John Findlay]

.....thats if they are Hearts fans and I think KB is full of H1b5 trolls.

It is. Some believe they are very subtle but, they always trip themselves up.

 

No Ann Budge. No Heart of Midlothian. It was and is simple as that. No CEO of any company from Microsoft to Scotmid gets it right everytime. We are human and therefore all fallible. He/she who has never made an error/mistake cast the first stone.

[Jamos]

Where does the wrong part come from? 

 

Could you not say the design evolved?

That is exactly what I meant, apologies my limited vocabulary got the better of me then .... good man

[FarmerTweedy]

It's incredible how many people get their knickers in a twist over a statement of facts.

 

I have made no criticism of Ann's abilities, conduct or ethics in any of my posts on this thread. If you go back to my original post on page 12 you will see that it was in response to a discussion of what Ann had put into or taken out the club. I provided that information, including a  statement that she took no salary from the club, but that she will ultimately be well rewarded for her time by way of her legacy shareholding.

 

I didn't like the original funding agreement, and I still don't like the amended agreement.  Ann dove a hard bargain with FOH from the outset but the fans have responded magnificently to the funding challenges to date.

 

There are further challenges ahead both on and off the field.  We are still waiting to find out how they will be managed.

 

It's very selective statement of 'facts'.  You've included the money paid out by HMFC/FoH for professional/audit fees as money she's received, but omitted it from your list of items she'd paid out in the first place.  The phrase 'a lie of omission is still a lie' springs to mind.

 

You've made a post that's hugely misleading about the reality of the money that she's paid out and has/will receive back over the course of the deal between her and FoH. Either you've done this because you're a complete idiot who doesn't understand what they're actually posting about and have accidentally made an innocent, but stupid, error or because you're deliberately trying to portray her and the agreement between her and FoH in a negative light to suit your agenda.  Personally, I very much doubt it's the former.

[johnthomas]

Oh come on. That's mischievous!

 

It's a standard part of an agreement involving loans and/or transactions for large sum of money. It's standard in many many types of agreements. The borrower pays the professional costs of the lender. It's not some mechanism to squeeze money out of us, but that's how you're painting it - as something she shouldn't have, or as something she/Bidco aren't entitled to. The value of these fees are collectively agreed (and are often capped as well, to my knowledge), so it's not some mechanism to extort our cash. Quite often the party paying the fees reviews the invoices from the professional service providers as well, it's not left to someone saying "Oh hiya gimme ?600k of your hard-earned would you because that's how much I think it'll cost. Ta." There's a difference between "money exiting the club" and "money Ann takes from the club" or however you originally put it. That money has exited the club but it's for professional fees - fees without which this deal would never have happened.

 

This must be massively boring for everyone else so I'll stop harping on about it now, but it's really not fair of you to deliberately attempt to muddy the puddle on this FF. Just saying.

'Muddying the puddle' is a nice way of putting it . Despite FFs denials it is quite clearly criticism of Ann Budge by inference and implication

Nobody , including Ann Budge , is above criticism but in this case it is unwarranted and , to me , clearly agenda driven

[socrates82]

So does that mean you think this was a bad deal for her?

 

Honestly, it's like some people want to portray her as a martyr or something.

 

I'm replying to people who seem not to be taking these things into account. If we're going to do a breakdown of the costs incurred by Ann and the return, you need to take into account her time and the fact that this money of hers is not being put to better use elsewhere. For example, FF said she didn't incur the legal costs etc but rather she engaged lawyers etc. That all takes time, which also takes her away from spending time on her business, thus incurring more cost to her.

 

From FF's post: "I did consider it, but chose not to as the transactions (?472k) were at zero cost to Ann.  She in effect engaged lawyers and accountants etc., to carry out due diligence and prepare legal and financial agreements on her behalf, then presented the bill to the club to pay."

 

What's Ann's hourly rate? What would she charge if asked to troubleshoot a business or consult for example? We are getting the benefit of that expertise included in the whole package. If someone can work that out and the hours she spends, then we'll get a true reflection of what she does or doesn't get out of her purchase of Hearts.

[FarmerTweedy]

You implying that you were happy for Cathro to be given the start of this season?

I was, and I know quite a few others who were too. I felt he should have been given till around October to show whether the main problem was him or the players (primarily those brought in in January). I changed my mind after the disastrous league cup campaign, but I still think the decision the club made to give him the opportunity to start this season was, at the time, the correct decision to make, even though hindsight shows that it turned out to be a disaster!

[scott herbertson]

I also think the idea that her shareholding is of great value is speculative. Many football club shareholdings have proved to be worthless and when she pitched in there was no guarantee that this would not be the case in th e medium to long term

 

There hasn't exactly been a rush of people when there were opportunities to take over Hearts

[Boab]

I was, and I know quite a few others who were too. I felt he should have been given till around October to show whether the main problem was him or the players (primarily those brought in in January). I changed my mind after the disastrous league cup campaign, but I still think the decision the club made to give him the opportunity to start this season was, at the time, the correct decision to make, even though hindsight shows that it turned out to be a disaster!

 

 

In the same boat.

 

The scary thing is, though, if Lafferty had scored late on against Dunfermline, he may still have been here. As you say, hindsight is a great thing but i'd rather it was the League Cup that showed him up rather than the League. it was the perfect...if that's the right word....tournament to see if he was going to turn it round. It became clear he was toast !

[AndyMcI]

ann got the stand budget wrong by a bigger margin and presumably took more than a few minutes to correct it. Ann told us the delay in the stand was due to factors outside our control. By the standards you apply to FF how much credence should we give to what ann says? Personally i wouldn't be that hard on her.

Ann got it wrong?

 

Interesting.......

 

Do you think that she got her pencil, paper and calculator out one day and costed a new stand?

 

 

Sent from my SM-G930F using Tapatalk

[GTJT]

Apologies for not responding earlier, but I've been out all morning.

 

You make a fair point and there is a case for including the professional fees in Ann's investment column. I did consider it, but chose not to as the transactions (?472k) were at zero cost to Ann. She in effect engaged lawyers and accountants etc., to carry out due diligence and prepare legal and financial agreements on her behalf, then presented the bill to the club to pay.

 

There was no direct financial benefit to Ann, but their was certainly a cost to the club to help facilitate Ann taking ownership. However I see that financial assistance to gain ownership an indirect benefit to her, hence I included it the column of costs to the club at Ann's behest.

 

Taking the emotional attachment that fans have for their club to one side, Ann effectively bought a distressed business out of administration. She did so with the promise of turning round the business, then selling 75% of it onto FOH five years down the road, subject to FOH putting ?3.8m directly into the business, repaying the ?2.4m loan, paying ?100k for the shares (?6.3m in total), and the club paying her c. ?750k interest on the loan over the period.

 

Two years down the road and Ann's business recovery plan had exceeded all expectations, largely down to higher than expected ST sales and Match Day revenues off the back of on field success and of course FOH cash. Ann embarked on an an ambitious project to build a new stand. She agreed with FOH that they provide a further ?3m towards funding the stand, but delays the transfer of ownership by 2 years.

 

Three years down the road, on field performance has gone backwards, we have an interim head coach, revenues are perhaps below forecasts for the first time, the stand costs have escalated, the opening date is delayed. This is Ann's first real test as owner. I'd guess that it is relatively easy to run a business when revenues are buoyant and costs are predictable, but it's a much bigger challenge when there are obstacles to be overcome.

 

Let's say Ann succeeds in resolving the on field issues, revenue streams grow and funding issues are resolved. We get to the transfer of ownership.

FOH will own 75.1% of a debt free club, with a shiny new stand, for a total investment of ?9.55m (the initial ?3.8m ended up as ?4.05m, before the stand funding commenced). Ann will have 17.4% of the club for an outlay of ?19k, plus ?300k waived interest, plus her services as CEO/Chairman.

 

If we get to that position, then will I say that it was worth it? Will I praise Ann's contribution? Will I praise FOH's contribution? ...... Yes, Yes and Yes.

 

On the other hand if on field performance doesn't meet expectations, revenue is sluggish and ongoing funding issues leaves the club in debt, and in need of further support from FOH

 

If we get to that position, then will I say that it was worth it? Will I praise Ann's contribution? Will I praise FOH's contribution? ...... Yes (as the club has survived) , Only for her first two years, and Yes without a doubt.

Why do you persistently omit the opportunity cost of her investment and the benefit to Hearts (cost to Ann) of her working for free from your calculations?

[graygo]

I also think the idea that her shareholding is of great value is speculative. Many football club shareholdings have proved to be worthless and when she pitched in there was no guarantee that this would not be the case in th e medium to long term

 

There hasn't exactly been a rush of people when there were opportunities to take over Hearts

 

To add to that (I can't be arsed digging out the post) it was stated that once the stand has gone up her 17odd% stake in the club will be worth much more, it wasn't pointed out that the other 70odd% that FoH own will also have gone up considerably.

 

Plus FoH won't have to find the umpteen million needed to finance a new stand.

[Rudolf]

I use gift (or donation if you prefer) simply to distinguish FoH's money (including Ann's FoH DD) from a loan such as the Ann/Bidco money.

What's Ann's salary FA?

[davemclaren]

To add to that (I can't be arsed digging out the post) it was stated that once the stand has gone up her 17odd% stake in the club will be worth much more, it wasn't pointed out that the other 70odd% that FoH own will also have gone up considerably.

 

Plus FoH won't have to find the umpteen million needed to finance a new stand.

Tynecastle isn't really worth any more after the stand completes, unless we can find someone wanting to buy and operate a football stadium.

[Francis Albert]

Tynecastle isn't really worth any more after the stand completes, unless we can find someone wanting to buy and operate a football stadium.

it is potentially worth more if we can fill all or most of the bigger capacity. Of course for that we need a decent head coach and a bit more strength in a couple of areas. IMO. And with near capacity crowds and hospitality sell outs i think it wouldn't be too difficult to sell a near debt free club.

[scott herbertson]

it is potentially worth more if we can fill all or most of the bigger capacity. Of course for that we need a decent head coach and a bit more strength in a couple of areas. IMO. And with near capacity crowds i think it wouldn't be too difficult to sell a near debt free club.

That's true Francis

 

My earlier point was that at the time of her investment there was no guarantee we would improve the football side to support a larger stadium. It was a big financial risk for her (in terms of her shareholding and chances that FOH would continue to fund paying her back)

 

So her initial investment, in my opinion was speculative and risky, and not a safe way to get a good return

[mitch41]

Ann got it wrong?

 

Interesting.......

 

Do you think that she got her pencil, paper and calculator out one day and costed a new stand?

 

 

Sent from my SM-G930F using Tapatalk

I don't know about you Andy but i think we all need to chill. So the main stand is a few million more big deal. Ann is human like us wow.

Sometimes people you employ mess up and as a owner / boss you take action. Ann Budge is our leader so let's back her 100% and do our best for the club we love. I feel if you have a go at her you have a go at Hearts, the fans and me that may be wrong for some people but tuff that's the way i feel.

[Francis Albert]

What's Ann's salary FA?

Zero. She is gifting her skill, time and energy. Has anyone ever disputed that?

[km7bhf]

Also remember there was a number of very large anonymous donations made to the stand fund. Perhaps Ann herself is one of these unsung heroes. It really wouldn't surprise me. 

[AndyMcI]

I don't know about you Andy but i think we all need to chill. So the main stand is a few million more big deal. Ann is human like us wow.

Sometimes people you employ mess up and as a owner / boss you take action. Ann Budge is our leader so let's back her 100% and do our best for the club we love. I feel if you have a go at her you have a go at Hearts, the fans and me that may be wrong for some people but tuff that's the way i feel.

Mitch,

 

I think you may have misinterpreted my post. (Or I am misinterpreting yours).

 

I wasn't meaning that as a negative towards Ann Budge. Quite the opposite.

 

I meant my previous post sarcastically.

 

I was suggesting that others will have put the cost plan together and I am sure if there was an unplanned over run she would have been as disappointed as anyone. It would not have been within her control as she would have employed others to accurately provide this information.

 

If some of it's through choice I am sure it's with good intentions and benefit to the club.

 

Some seem keen to lay the blame directly with her for any budget overun and seem to be suggesting she personally made a mess of the budget, whereas sometimes you have to rely on others and mistakes can happen.

 

I have full trust she will be dealing with any issues in the best way possible.

 

[emoji106]

 

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[Francis Albert]

To add to that (I can't be arsed digging out the post) it was stated that once the stand has gone up her 17odd% stake in the club will be worth much more, it wasn't pointed out that the other 70odd% that FoH own will also have gone up considerably.

 

Plus FoH won't have to find the umpteen million needed to finance a new stand.

FoH IS finding umpteen million (approx. ?6m) to fund the new stand, about half of the original budget. Ann is foregoing ?300,000 in interest or 2.5% of the original budget. So in proportion to ultimate shares of 17.4% and 75.1% respectively FoH is funding the lions share (about 90%) of the combined FoH/Ann funding of the new stand.

[graygo]

Zero. She is gifting her skill, time and energy. Has anyone ever disputed that?

 

Aye but she's more than making up for that with the legacy shares she stole managed to get for next to nothing, amarite?

[graygo]

FoH IS finding umpteen million (approx. ?6m) to fund the new stand, about half of the original budget. Ann is foregoing ?300,000 in interest or 2.5% of the original budget. So in proportion to ultimate shares of 17.4% and 75.1% respectively FoH is funding the lions share (about 90%) of the combined FoH/Ann funding of the new stand.

 

?6m is not umpteen million, ?13m to ?19m is umpteen million and that is what FoH would have had to find if the building of the stand happened after the handover.

[Francis Albert]

.

[Francis Albert]

Aye but she's more than making up for that with the legacy shares she stole managed to get for next to nothing, amarite?

Where did I suggest that? The 17.4% which she will acquire at one hundredth of the cost per share that FoH will incur is perhaps some small compensation, along with our undying gratitude, for her labour.