We're in good shape financially....apparently.....!

[Section Q]

https://footballeconomyv2.blogspot.com/2023/12/hearts-in-good-financial-shape.html

 

Hearts have come a long way since the club was placed into administration in 2013, when they were deducted 15 points and then relegated to the Scottish Championship. Much of the credit is due to Ann Budge, who took ownership in June 2014 in partnership with the Foundation of Hearts, following the misguided Romanov regime.

 

In August 2021 Budge signed over 75% of her shareholding to the Foundation, making Hearts the largest fan-owned club in the UK. The club described this as “Heart & Soul Day”.  This approach has served the club well, though the model going forward is likely to still require the support of benefactors.

Hearts once again posted a pre-tax profit, though this dropped from £1.7m to £0.3m. Revenue rose £6.2m (42%) from £14.6m to a new club record of £20.8m, but this was more than offset by £7.4m (38%) growth in operating expenses.

Hearts’ record turnover was driven by their involvement in the Europa Conference League group phase. This led to increases in both broadcasting, which more than doubled from £3.5m to £7.8m, and gate receipts, up £1.0m (20%) from £5.2m to £6.2m.

However, the club was at pains to emphasise that commercial income also rose £0.8m (14%) from £6.0m to £6.8m, thanks to growing commercial operations – hospitality, retail, sponsorship and advertising.

Not all clubs have published accounts for 2022/23, but Hearts’ £0.3m profit is the third best financial result in Scotland to date, albeit miles below Celtic’s record-breaking £33m profit. That said, Hearts’ performance was only made possible thanks to “very generous” donations of £6.2m.

In general, Scottish clubs usually aim to break-even, so even the largest losses are relatively small, with Rangers’s £4.1m deficit being the only one in the league above £2m.

Player sales

Hearts’ profit from player sales decreased from £0.5m to £0.4m. There were no major sales with most of the departures being either on free transfers or loan deals.

Hearts have made very little money from player sales with only £4.6m profit from this activity in the last 10 years. In this period they have only generated more than a million pounds on one occasion (and that was only just broke through that barrier).  On the one hand, this is a good sign, as it shows that Hearts will keep hold of their playing talent, unless a deal makes sense.  That said, Ann Budge has admitted that this is an area for potential improvement: “Another thing ourselves and other clubs must do better, and it’s hard, is player trading. That’s where you can make so much money.”

Donations

Hearts figures have significantly benefited from exceptional items, especially £31.2m donations in the last seven years, including £6.2m in 2022/23 (benefactors £4.5m, the Foundation of Hearts £1.6m).  Since its inception, the FOH has contributed over £16m of funding, which the club described as “a truly amazing achievement”.

However, the lion’s share of donations still comes from individual benefactors, including James Anderson, who put in £4.5m last season. The Edinburgh philanthropist was appointed to Hearts’ board in July 2021.   These donations clearly give Hearts a financial advantage over other Scottish clubs, but whether they should still be considered as an exceptional item is debatable, given that they have noe been provided seven years in a row.

Hearts’ £20.8m revenue is now the third highest in Scotland, £5.0m ahead of Aberdeen’s £15.8m. However, the magnitude of their challenge is illustrated by the massive gap to the big two Glasgow clubs. This means that they are around £100m below Celtic’s £120m, while Rangers’ £84m is more than four times as much.

Hearts benefited from an estimated €5.6m UEFA TV money last season from the Europa Conference, though this was much lower than Scotland’s two representatives in the Champions League, Celtic €29.9m and Rangers €20.9m.

Hearts’ stadium development in recent years has cost more than £20m, increasing Tynecastle’s capacity to around 20,000 and improving other facilities (hybrid pitch, undersoil heating and supporters bar). Budge says that this should help generate an additional £3m in a normal season.

Wages

Hearts’ wage bill increased by £4.2m (37%) from £11.2m to £15.4m, easily a club record. The club said that this demonstrated its “ongoing and essential investment”.  Headcount shot up from 237 to 276 with players, coaching and football support staff rising from 117 to 130, while administrative and commercial staff increased from 120 to 146.  This means that wages have more than doubled since promotion from the Scottish Championship in 2021 from just £7.5m.

Despite the steep increase, Hearts’ £15.4m wage bill is still only around a quarter of Rangers £64.0m and Celtic £60.9m. However, they are now well ahead of Aberdeen £11.9m, though it will be interesting to see if their wages fall this season when they are not competing in a European group stage.

The club’s view that it can “look forward with confidence to the future” does not seem unreasonable, though the major challenge of competing with Celtic and Rangers remains.

[OTT]

I think we are. This "wouldn't be solvent but for the benefactors" stuff is utter pish. We're spending money because we know the benefactors are there - it isn't retroactively added to keep us solvent. 

 

Budge and the board are building up our non-footballing revenue streams which is smart, and will be useful long term. Think overr the next 3 years the benefit of the hotel will hopefully be felt. 

 

Problem for me has been the lack of academy lads progressed into the first team and sold. As we've seen at Aberdeen, clubs down south and abroad will pay £2-5m for Scottish players in the right circumstances. Having such a youth averse manager in Neilson was an issue, but if Naismith can get us 3rd whilst giving Denholm, Tait etc. meaningful minutes, then hopefully we'll see bids from down south start to come in and we can start pairing up all the hard work being done off the field to build up our revenue streams matched with a successful academy converting kids into multimillion pound fees which can then be reinvested back into the club. 

Edited December 18, 2023 by OTT

[Section Q]

1 hour ago, OTT said:

I think we are. This "wouldn't be solvent but for the benefactors" stuff is utter pish. We're spending money because we know the benefactors are there - it isn't retroactively added to keep us solvent. 

 

Budge and the board are building up our non-footballing revenue streams which is smart, and will be useful long term. Think overr the next 3 years the benefit of the hotel will hopefully be felt. 

 

Problem for me has been the lack of academy lads progressed into the first team and sold. As we've seen at Aberdeen, clubs down south and abroad will pay £2-5m for Scottish players in the right circumstances. Having such a youth averse manager in Neilson was an issue, but if Naismith can get us 3rd whilst giving Denholm, Tait etc. meaningful minutes, then hopefully we'll see bids from down south start to come in and we can start pairing up all the hard work being done off the field to build up our revenue streams matched with a successful academy converting kids into multimillion pound fees which can then be reinvested back into the club. 

We don't seem to be spending our players wages budget very well when compared to other teams.

[1971fozzy]

Is the money on staff costs not high because we employ all our own catering / hospitality staff etc (rather than use contracts ?)

[XB52]

6 minutes ago, Section Q said:

We don't seem to be spending our players wages budget very well when compared to other teams.

We are where we should be, league wise. Been to 1 Cup semi final too. Where do you expect us to be compared to other teams?

[kingantti1874]

What do you mean “apparently” ? There is no apparent about it. 

[Mirror]

I'd hope so, that's the part of the business the board are good at running. 

 

Imagine that side was like the football side 🤣, the hotel would have like 60 bathrooms and 4 bedrooms.

Edited December 18, 2023 by Mirror

[i8hibsh]

56 minutes ago, 1971fozzy said:

Is the money on staff costs not high because we employ all our own catering / hospitality staff etc (rather than use contracts ?)

 

 

I'm a very happy Jambo today so not saying this to stir the pot or be negative but surely the women's team account for a lot of it.  They must have around 30+ full time staff.  It seems like everyday we are creating another role for it.

[frankblack]

1 minute ago, i8hibsh said:

 

 

I'm a very happy Jambo today so not saying this to stir the pot or be negative but surely the women's team account for a lot of it.  They must have around 30+ full time staff.  It seems like everyday we are creating another role for it.

 

You don't seem to have much respect for women.  Did someone take you to the cleaners?

 

Its been said before that the benefactors have ring fenced money for the women's team.   That means it was never available to the mens team.

[Bazzas right boot]

1 hour ago, Section Q said:

We don't seem to be spending our players wages budget very well when compared to other teams.

 

3rd and 4th last two seasons,  3rd atm

 

What you expecting?

 

Edited December 18, 2023 by Bazzas right boot

[Cambo_Jambo]

1 hour ago, OTT said:

I think we are. This "wouldn't be solvent but for the benefactors" stuff is utter pish. We're spending money because we know the benefactors are there - it isn't retroactively added to keep us solvent. 

 

Budge and the board are building up our non-footballing revenue streams which is smart, and will be useful long term. Think overr the next 3 years the benefit of the hotel will hopefully be felt. 

 

Problem for me has been the lack of academy lads progressed into the first team and sold. As we've seen at Aberdeen, clubs down south and abroad will pay £2-5m for Scottish players in the right circumstances. Having such a youth averse manager in Neilson was an issue, but if Naismith can get us 3rd whilst giving Denholm, Tait etc. meaningful minutes, then hopefully we'll see bids from down south start to come in and we can start pairing up all the hard work being done off the field to build up our revenue streams matched with a successful academy converting kids into multimillion pound fees which can then be reinvested back into the club. 

Your first paragraph there is so important. From my understanding, the James Anderson money is specifically earmarked for the 'nice to haves' that most clubs would love to be able to do but would have to take out debt to achieve. His money, as far as I'm aware, has been spent on things like infrastructure, the woman's team, youth programmes and (I'm not sure of this) the hotel development which essentially means we've built a £1m+ p.a. additional revenue generator for 'free.' According to Budge, that £1m is at the low end of revenue expectations.

 

The football side is a fair bit off where we want to be (although again, probably more regards style and not necessarily miles off of actual results because finishing 3rd, 4th then challenging for 3rd again this year isn't bad at all given recent history) but the off the pitch stuff looks like it's going pretty well which ultimately, is almost more important given that the main fear I think we all had a decade ago was that 5-1 was going to be the last thing Hearts did before going pop.

[i8hibsh]

4 minutes ago, frankblack said:

 

You don't seem to have much respect for women.  Did someone take you to the cleaners?

 

Its been said before that the benefactors have ring fenced money for the women's team.   That means it was never available to the mens team.

 

 

They are surely included in the overall headcount tho?

[Bazzas right boot]

7 minutes ago, i8hibsh said:

 

 

I'm a very happy Jambo today so not saying this to stir the pot or be negative but surely the women's team account for a lot of it.  They must have around 30+ full time staff.  It seems like everyday we are creating another role for it.

 

 

Woman's football is now part of Heart of Midlothian, you need to get over it.

They play football and get paid for it, there's even a competition for them.

 

You just need to swallow that pill, accept it like a man and stop bitching about  the women's team.

 

 

 

[Cambo_Jambo]

1 minute ago, i8hibsh said:

 

 

They are surely included in the overall headcount tho?

They will be, yes. So will the additional costs of running a fully separate B team and the costs of running that will have added to our overheads as well because home ground rental, wages for a larger player group, more dedicated coaches and even stuff like travel all add up.

 

Speaking as somebody who likes people feeling included, a proper woman's team is now something a club of our stature should be fully committed to from a moral stand point. Not having a woman's section in 2023 is, in my opinion, tin pot. 

 

Speaking from a purely commercial standpoint, the growth in woman's football in the next 10-20 years could be absolutely huge and setting ourselves up as one of the major players in the SWPL is a massive commercial opportunity.

[soonbe110]

1 hour ago, 1971fozzy said:

Is the money on staff costs not high because we employ all our own catering / hospitality staff etc (rather than use contracts ?)

And a semi pro women’s team and a B team, neither of which Aberdeen have.  No way to compare first team squads on a like for like cost basis. 

[Lone Striker]

10 minutes ago, i8hibsh said:

 

 

They are surely included in the overall headcount tho?

Yes, but why is that a problem for you ?  

[Sir PH]

9 minutes ago, Lone Striker said:

Yes, but why is that a problem for you ?  

Maybe he's not a fan of women's football and wants every penny invested into the men's team. That's not a crime. 

[Selkirkhmfc1874]

Said it many times we've never been better run off the park 

[Lone Striker]

9 minutes ago, Sir PH said:

Maybe he's not a fan of women's football and wants every penny invested into the men's team. That's not a crime. 

Did anyone suggest it was a crime ?  His is  an outdated view of what modern top flight professional football clubs  represent.  -  even if your not a fan of womens football. 

 

i8 still doesn't  seem to understand that James Andersons generous funding is because of non-core stuff like the womens team and the community events/courses & charity support   which Hearts provide.  If Hearts didn't do them, its unlikely that he'd pump the same money into the mens team.

 

[tiger Rudi]

All looks very good for the future of Heart of Midlothian. 

 

Focusing on the two negatives:

Young players lack of progression to the first team, leading to limited player sales. 

The purchase of younger players hopefully leading to decent transfer sell on fees. 

The second part may come good. We don't know how the likes of Oda, Tagawa, Vargas, Neilson and Hoff will turn out. The jury is still out on all of them. I think it's safe to say Rowles and Shankland will deliver a healthy profit if a buyer does come in and we decide to sell. 

As for players progressing to the first team, I fear the gap between the Lowland League and the Spl is far too great. We should be loaning more players out, letting them gain valuable experience at a better standard. Keep the Lowland League for more under 17's essentially. How much further on would Kirk be now if he had been banging them in for a Scottish League team for the past two seasons? 

[FarmerTweedy]

41 minutes ago, Cambo_Jambo said:

They will be, yes. So will the additional costs of running a fully separate B team and the costs of running that will have added to our overheads as well because home ground rental, wages for a larger player group, more dedicated coaches and even stuff like travel all add up.

 

Speaking as somebody who likes people feeling included, a proper woman's team is now something a club of our stature should be fully committed to from a moral stand point. Not having a woman's section in 2023 is, in my opinion, tin pot. 

 

Speaking from a purely commercial standpoint, the growth in woman's football in the next 10-20 years could be absolutely huge and setting ourselves up as one of the major players in the SWPL is a massive commercial opportunity.

I think the other important thing about having a women's team is that with it becoming more common for clubs to have one, there's a strong likelihood that clubs which don't have one will struggle to attract female supporters to the club at all, including the men's team.

[Cambo_Jambo]

10 minutes ago, FarmerTweedy said:

I think the other important thing about having a women's team is that with it becoming more common for clubs to have one, there's a strong likelihood that clubs which don't have one will struggle to attract female supporters to the club at all, including the men's team.

Absolutely.

 

I think the real cost just now is opportunity cost.

 

In 10 years, when Hearts have full woman's representation from youth through to senior football, with 100s of girls and women playing on a weekly basis at all levels, are other going to look round and realise their demographics in the stand are exclusively 60+ year old men?

[John Findlay]

There are many other clubs that would like to be where we are. Women et al.

Edited December 18, 2023 by John Findlay

[PortyBeach]

3 hours ago, Section Q said:

We don't seem to be spending our players wages budget very well when compared to other teams.

I think that’s a fair point. Mind you, we’re not alone and until Beale was sacked, there were similar rumblings from Ibrox.

That nice Monsieur Clement seems to be getting a tune out of Beale’s under-performers, however. No, not that tune…

[August Landmesser]

3 hours ago, OTT said:

I think we are. This "wouldn't be solvent but for the benefactors" stuff is utter pish. We're spending money because we know the benefactors are there - it isn't retroactively added to keep us solvent

The amount of times that this has to be repeated on here is crazy eh? 

[Gorgie_Rules]

The sustainable growth in income that this board has achieved will massively benefit the club in the long term.

 

Folk will always be short sighted about it if results are poor, however if the club is to ever reach its potential then it’s imperative all revenue streams are maximised.

 

The work that this board has done on that front will only ever be appreciated with hindsight many years in the future. 

[AC Mallin_51]

Hopefully means we won’t buckle on a low ball for shankland then 

[gorgierulesapply88]

4 hours ago, OTT said:

I think we are. This "wouldn't be solvent but for the benefactors" stuff is utter pish. We're spending money because we know the benefactors are there - it isn't retroactively added to keep us solvent. 

 

Budge and the board are building up our non-footballing revenue streams which is smart, and will be useful long term. Think overr the next 3 years the benefit of the hotel will hopefully be felt. 

 

Problem for me has been the lack of academy lads progressed into the first team and sold. As we've seen at Aberdeen, clubs down south and abroad will pay £2-5m for Scottish players in the right circumstances. Having such a youth averse manager in Neilson was an issue, but if Naismith can get us 3rd whilst giving Denholm, Tait etc. meaningful minutes, then hopefully we'll see bids from down south start to come in and we can start pairing up all the hard work being done off the field to build up our revenue streams matched with a successful academy converting kids into multimillion pound fees which can then be reinvested back into the club. 

Peter Haring has been keeping youth out the team! That's how bad its been 🤣🤣🤣

[Ex member of the SaS]

With regards the woman's team, IF they are generating their own income then fine I have no problem or interest in their games. If on the other hand some of the FoH and first team gate money is being directed to the woman's team then I am against it. It's a small minority of first team fans who have even the slightest interest in the woman's game, so money generated by the first team should all go to the first team. Benefactors can spend their cash any way they wish.

[TheBigO]

3 hours ago, Section Q said:

We don't seem to be spending our players wages budget very well when compared to other teams.

Not sure our player budget is overly different from Aberdeen or Hibs, especially the former.  We have more staff as have more in-house facilities I think (much of which are income streams such as catering)

2 hours ago, i8hibsh said:

 

 

I'm a very happy Jambo today so not saying this to stir the pot or be negative but surely the women's team account for a lot of it.  They must have around 30+ full time staff.  It seems like everyday we are creating another role for it.

Yeah some will be full time, some will be part time.  There will be more marketing duties and the like which will need head count.

 

But also, we don't have the women's team, we probably don't have the benefactor money, and it also attracts a better level of sponsor to the club, as does the great community work we do.  A lot of it is about brand, and the club are 100% certain the women's team bring in more than they cost.

 

It'll always be hard to quantify cos it wont be "here are the women's wages" vs "here are the women's gate receipts".  Most of the income from the women's team is wrapped into other streams.

[Smithian]

A couple thoughts.

 

First, as we all know, we need to do better in player trading. Every club on Earth outside of Man City/United, PSG, Newcastle, and that ilk are selling clubs. Accept it, embrace it, and thrive in it. Selling players will build money for the playing budget and make recruitment easier.

 

Second, the staff number shocked me. If Hearts move from Riccarton to a new training ground, would it make sense for more staff to be moved out there? Have to think Tynecastle has a limited amount of offices.

[GinRummy]

1 minute ago, Smithian said:

A couple thoughts.

 

First, as we all know, we need to do better in player trading. Every club on Earth outside of Man City/United, PSG, Newcastle, and that ilk are selling clubs. Accept it, embrace it, and thrive in it. Selling players will build money for the playing budget and make recruitment easier.

 

Second, the staff number shocked me. If Hearts move from Riccarton to a new training ground, would it make sense for more staff to be moved out there? Have to think Tynecastle has a limited amount of offices.

The space the hotel takes up was originally earmarked for offices but decided it wasn’t needed. If we did move to a purpose built training facility, that could include office space, I wonder if the space offices at Tynie are currently taking up could be used to somehow develop income. 

[Cambo]

Does the womens team generate anything for the club from gate receipts? 

[Smithian]

1 minute ago, Cambo said:

Does the womens team generate anything for the club from gate receipts? 

This is a community club and the women's team helps build connection with the community.

 

I also think the women's game is a growth sport at the moment. This is an investment that may get into the black eventually.

[Fxxx the SPFL]

4 hours ago, 1971fozzy said:

Is the money on staff costs not high because we employ all our own catering / hospitality staff etc (rather than use contracts ?)

and we pay the living wage not all clubs do that and i think we were the first to do so.

[Jim Panzee]

3 hours ago, Bazzas right boot said:

 

 

Woman's football is now part of Heart of Midlothian, you need to get over it.

They play football and get paid for it, there's even a competition for them.

 

You just need to swallow that pill, accept it like a man and stop bitching about  the women's team.

 

 

 

has to be done......

 

 

WOMEN!!!!!!!!!!!!

[BlueRiver]

Wummin 😡😡😡😤

[BlueRiver]

Tbf for all the talk of the women's team generating revenue...surely we can ask the same about the academy. 

 

Does that pay its way or do we just train a bunch of laddies to then go play in Scottish lower leagues? 

[tian447]

The money that is going to the women's team would have never been available to the men's team in the first place.  It's not coming out of the men's budget, it's coming from elsewhere. 

 

i8 must have been absolutely rinsed in court after a divorce or is the textbook definition of an incel, because his hatred toward women borders on being obsessive.

[Phil D. Corners]

No apparently about it. We are in a great place with more to come. 💪🏼💪🏼

[1971fozzy]

1 hour ago, Ex member of the SaS said:

With regards the woman's team, IF they are generating their own income then fine I have no problem or interest in their games. If on the other hand some of the FoH and first team gate money is being directed to the woman's team then I am against it. It's a small minority of first team fans who have even the slightest interest in the woman's game, so money generated by the first team should all go to the first team. Benefactors can spend their cash any way they wish.

there will be a lot of supporters that are women that pay into FOH that may well disagree

[Thomaso]

5 hours ago, OTT said:

I think we are. This "wouldn't be solvent but for the benefactors" stuff is utter pish. We're spending money because we know the benefactors are there - it isn't retroactively added to keep us solvent. 

 

Budge and the board are building up our non-footballing revenue streams which is smart, and will be useful long term. Think overr the next 3 years the benefit of the hotel will hopefully be felt. 

 

Problem for me has been the lack of academy lads progressed into the first team and sold. As we've seen at Aberdeen, clubs down south and abroad will pay £2-5m for Scottish players in the right circumstances. Having such a youth averse manager in Neilson was an issue, but if Naismith can get us 3rd whilst giving Denholm, Tait etc. meaningful minutes, then hopefully we'll see bids from down south start to come in and we can start pairing up all the hard work being done off the field to build up our revenue streams matched with a successful academy converting kids into multimillion pound fees which can then be reinvested back into the club. 

Our Academy has been a huge for years since Levein sold Budge a pup with his grand plan of having all our age groups playing to the same system, continuity of coaching, etc. All sounded great but we have produced absolutely FA in terms of young players coming through to be regular first team players or decent sell on value (note Hickey came through the Celtic system).

[inspector]

3 hours ago, soonbe110 said:

And a semi pro women’s team and a B team, neither of which Aberdeen have.  No way to compare first team squads on a like for like cost basis. 

Aberdeen have a women's team. They were playing Hibs on Friday

[Thomaso]

12 minutes ago, 1971fozzy said:

there will be a lot of supporters that are women that pay into FOH that may well disagree

How many of these women are ST holders, pay in FoH, go watch the men’s team but have absolutely no interest in watching women’s football - I know my wife and daughter fall into that category.

[Sooks]

Seems like the women’s team help us to bring in more external funding than the amount it costs to run their side . Having a joint sponsor might help some of the misogynists appreciate this 

[soonbe110]

8 minutes ago, inspector said:

Aberdeen have a women's team. They were playing Hibs on Friday

All amateurs. 

[inspector]

Just now, soonbe110 said:

All amateurs. 

I stand corrected.

[1971fozzy]

5 minutes ago, Thomaso said:

How many of these women are ST holders, pay in FoH, go watch the men’s team but have absolutely no interest in watching women’s football - I know my wife and daughter fall into that category.

I genuinely have no idea. I did say that ‘may well not agree’.

I have zero interest in women’s football but it’s part of the club and community. Anyway it’s already been said it has no effect on men’s team budget. So a mute point anyway

[soonbe110]

1 minute ago, inspector said:

I stand corrected.

👍

[FionaHmfc]

1 minute ago, Thomaso said:

How many of these women are ST holders, pay in FoH, go watch the men’s team but have absolutely no interest in watching women’s football - I know my wife and daughter fall into that category.

Me too. Don’t think anything would ever convince me to go and watch a game. Just got no interest in it whatsoever. But I do see the upside to having a woman’s team as someone else pointed out earlier it could really help attract fans in the future. Growing up and playing football to me there was only ever really Hibs ladies to play for. No other teams affiliated with mens teams really existed. Hibs were like the elite team you could play for in the Lothian region. Most girls I played with ended up going to play for them and needless to say become Hibs fans and are now pretty much all season ticket holders, go to all games home and away and probably contribute a fair fortune to Hibs. I never played for them as the thought of wearing a hibs kit turned my stomach so I eventually just gave up 😂 

 

But knowing the amount I currently spend on the FOH, season tickets, every away game, European games home and away, merchandise etc … imagine in the future we could attract young girls to play for Hearts who would do the same. They would eventually hopefully take an interest in the mens team and go on to contribute like me and many other women I know who support Hearts currently do.
 

So while I’ll never really go and support the women’s team or take much interest, I definitely don’t mind them being affiliated to our club as I can see the role clubs can play growing up for young girls.