Ewan Murray: Hearts' debts have risen to ?37m-?38m, will be published in next 2 weeks

[shaun.lawson]

http://football.guardian.co.uk/News_Story/0,,2266678,00.html

[Ryan Gosling]

[Geoff Kilpatrick]

Hmmm. That suggest a loss of circa 9m. Now with turnover of around 11-12m that suggests our cost base was 21m!

 

I would like to know how our costs doubled in a year if the figures are to be believed!

[Heaven98]

Pretty much in the ballpark of what we were all expecting.

 

It's still absolutely insane, though. Oh, I forgot it's a ten...fifteen...twenty year plan, isn't it? Any room for the odd decent players in that timescale or is that asking too much?

[shaun.lawson]

Hmmm. That suggest a loss of circa 9m. Now with turnover of around 11-12m that suggests our cost base was 21m!

 

I would like to know how our costs doubled in a year if the figures are to be believed!

 

My thoughts entirely. Even allowing for the point that the sale of Craig Gordon happened after the period in question, how on earth was it possible to make such a loss? Moreover, assuming costs have been slashed this season, it's still probable our debts right now (ie. including Gordon and Velicka's sales) are likely to be in the mid-thirties, which is pretty scary.

[shaun.lawson]

Pretty much in the ballpark of what we were all expecting.

 

It's still absolutely insane, though. Oh, I forgot it's a ten...fifteen...twenty year plan, isn't it? Any room for the odd decent players in that timescale or is that asking too much?

 

I guess it's now obvious why Velicka was sold the moment a half-decent offer was made!

[Heaven98]

I guess it's now obvious why Velicka was sold the moment a half-decent offer was made!

 

So having eviscerated the first team, next up is plundering the "cream of the youth."

 

HMFC - we're no longer a selling club. Remember that one?

[Geoff Kilpatrick]

Er, the Velicka sale saw the money lodged on Kaunas' books. It won't be on HMFC's.

[shaun.lawson]

Er, the Velicka sale saw the money lodged on Kaunas' books. It won't be on HMFC's.

 

Yes, sorry! It's so easy to get confused about all this. You have to assume, though, that figures such as these still explain why we'd be so eager to sell him - because ultimately it's UBIG's money we're talking about here, whether via Hearts or Kaunas.

[scott_jambo]

So if this new stand goes ahead, we become almost 100 million in debt?

 

Wee HMFC 100 million in debt.

 

 

Its just sunk in. Were up Sh*t creek without a paddle.

[Heaven98]

Yeah but his 5 pound-a-week wages were a heck of a drain.

[Heaven98]

So if this new stand goes ahead, we become almost 100 million in debt?

 

Wee HMFC 100 million in debt.

 

 

Its just sunk in. Were up Sh*t creek without a paddle.

 

Scott - don't think about it too much. Because any sane person would think it's totally insane.

[BangkokHearts]

We are now seeing the financial implications of not reaching the Champions League group stages when we had the chance IMO.

 

Farcical wages and big earners that don't even make the first team since haven't helped.

 

The sale of Gordon and a couple of other players will put us back around the same position we were in before Romanov took over with the exception being our revenues have increased slightly and we don't have to leave Tynecastle. It's not as bad as it appears.

 

The question is will we now take another gamble to get to where we should have been three or four years ago?

 

I believe the answer has to be yes and that is why we haven't heard any manager news nor any signing prospects. It's also the reason we have seen a lot of players shipped out. Romanov is clearing house of the players that failed his ambition of CL group stage football and the pot of gold that lies at the end of that rainbow. I could be wrong but I reckon a new manager will arrive with many more new players in the close season.

[shaun.lawson]

We are now seeing the financial implications of not reaching the Champions League group stages when we had the chance IMO.

 

Farcical wages and big earners that don't even make the first team since haven't helped.

 

The sale of Gordon and a couple of other players will put us back around the same position we were in before Romanov took over with the exception being our revenues have increased slightly and we don't have to leave Tynecastle. It's not as bad as it appears.

 

The question is will we now take another gamble to get to where we should have been three or four years ago?

 

I believe the answer has to be yes and that is why we haven't heard any manager news nor any signing prospects. It's also the reason we have seen a lot of players shipped out. Romanov is clearing house of the players that failed his ambition of CL group stage football and the pot of gold that lies at the end of that rainbow. I could be wrong but I reckon a new manager will arrive with many more new players in the close season.

 

Don't get this bit. If Ewan's figures are accurate, then if you subtract the money from Gordon's sale, that leaves us in the very high twenties and pushing ?30m of debt. But given we appear to have made a loss of circa ?9m (!) in 06/7, then it's pure fantasy to imagine we could suddenly break even immediately: far more likely, surely, is another loss of at least ?5m or so, which leaves us slap bang in the mid-thirties, or possibly even higher. Which is a good 65-70% higher debt than that which left us looking to run Chris Robinson out of town.

 

Maybe the scariest thing of all is the way many posters now seem to dismiss this kind of figure as though it's meaningless - but since when did a club with only a 17,000 capacity running at a loss of ?9m over one solitary season qualify for such complacency among its custodians? And if you add the stadium redevelopment on too (and remember, the cost of that will doubtless rise: doesn't it always with such things in the UK?), it's then that things start to become utterly terrifying. There's actually an argument that we as fans should be doing everything in our power to oppose the planning application: I know that sounds bizarre, and there's no chance of more than a handful of Jambos being prepared to do this, but HMFC with a debt of getting on for nine figures? That has to frighten anyone with the club at Heart.

 

Incidentally, regarding your last paragraph: I hope to God there's no chance of us taking a similar gamble ever again. I still think a credible manager will arrive in the summer, but it'd be absolutely ridiculous to keep living so dramatically beyond our means. Doing that got us into such a mess whereby only Romanov could bail us out; and has led to the incredible annual loss we are now talking about. Who was it who said that continuing to do the same thing over and over again in the expectation of a different result was the definition of insanity? And what is it about our club that, once we're off the life support machine, instead of learning from our mistakes, we seem continually hellbent on readministering the poison?

[Geoff Kilpatrick]

Disagree Shaun. Start building the stand and it is completely UBIG's problem, plus it'll be even harder to try and liquidate the assets to get any sort of payback.

 

I think we need to try and understand what has gone on with the cost base because I can't see how it went up so much, particularly since the Rix/Vlad bonanza had mostly been accounted for in the previous accounts.

[Heaven98]

Disagree Shaun. Start building the stand and it is completely UBIG's problem, plus it'll be even harder to try and liquidate the assets to get any sort of payback.

 

I think we need to try and understand what has gone on with the cost base because I can't see how it went up so much, particularly since the Rix/Vlad bonanza had mostly been accounted for in the previous accounts.

 

This is one very very tenuous financial warren. It's really not that cut and dried. No Federal Reserve lining up to do a Bear Stearns bail-out for Romanov when it all comes crashing down on his "financial empire."

[Geoff Kilpatrick]

This is one very very tenuous financial warren. It's really not that cut and dried. No Federal Reserve lining up to do a Bear Stearns bail-out for Romanov when it all comes crashing down on his "financial empire."

 

Who says Vlad will be bailed out? No one questions Chelsea losing 80m odds each year under Abramovich. I'm not equating the two but the point is that the more UBIG get involved, the more they need us to make things a success because even if they maximised asset sales in the event of pulling the plug (and when did that ever happen?) they would lose millions.

[Heaven98]

Who says Vlad will be bailed out? No one questions Chelsea losing 80m odds each year under Abramovich. I'm not equating the two but the point is that the more UBIG get involved, the more they need us to make things a success because even if they maximised asset sales in the event of pulling the plug (and when did that ever happen?) they would lose millions.

 

The bail-out reference was a joke. I don't think you'll find any serious intergalactic financial gatherings convened in the near future to address the impending meltdown of VR and his tinpot holdings.

 

And what makes you think that UBIG is this untouchable financial giant, free from the economic pressures of the market etc? Indeed what makes you think that Romanov's perceived millions are anything more than chits that are shuffled around between various dubious holdings?

 

He's probably got a few hundred thousand stashed away under his precious acetate of "Sgt. Peppers." Beyond that, it's rather a mystery.

[Guest casper]

Who says Vlad will be bailed out? No one questions Chelsea losing 80m odds each year under Abramovich. I'm not equating the two but the point is that the more UBIG get involved, the more they need us to make things a success because even if they maximised asset sales in the event of pulling the plug (and when did that ever happen?) they would lose millions.

 

You're having a laugh. Make a success of things? Have you seen the team play recently? Our football club is in deep do-do.

[Guest GhostHunter]

Here's a scenario for you....

 

Just suppose that whilst the debt has risen, and there's still the stadium costs to be added on top when they commence -what if someone has come in already, and offered a stupid amount of money to Ubig for the hotel/conference/flats etc ?

 

Say that figure is enough to pay for the rebuild of the stadium in it's own right, but also help reduce a chunk of the current debt...

 

Could you live with the club losing ?9m this season, if you knew that in 2/3 years time - the stadium would have been PAID for, and the debt reduced, us into a new larger capacity stadium generating more revenue etc etc.... ????

[Heaven98]

There's actually an argument that we as fans should be doing everything in our power to oppose the planning application

 

For me Shaun, that is the key. This bizarre acceptance of an astronomical amount of debt guaranteed - by what???

 

It's utter fecking madness. We should just get on with the business of forming an alternative HMFC. It's what will have to happen sooner or later, so why not do it now?

[Heaven98]

Here's a scenario for you....

 

Just suppose that whilst the debt has risen, and there's still the stadium costs to be added on top when they commence -what if someone has come in already, and offered a stupid amount of money to Ubig for the hotel/conference/flats etc ?

 

Say that figure is enough to pay for the rebuild of the stadium in it's own right, but also help reduce a chunk of the current debt...

 

Could you live with the club losing ?9m this season, if you knew that in 2/3 years time - the stadium would have been PAID for, and the debt reduced, us into a new larger capacity stadium generating more revenue etc etc.... ????

 

And here's a scenario for you. What if that was undoubtedly the game plan before certain global economic realities came crashing in on us and those parties are now maybe rethinking those numbers?

[washniklaw]

9 millon in one season is shocking.

 

The only way this should be acceptable is if it includes assest purchases (land behind the Main stand/Tynecastle High). If this is the case, I will grudgingly accept that it is costing us additional money in order to put together the infastructure.

 

If these purchases are still to be included, I'm worried.

[Guest GhostHunter]

9 millon in one season is shocking.

 

The only way this should be acceptable is if it includes assest purchases (land behind the Main stand/Tynecastle High). If this is the case, I will grudgingly accept that it is costing us additional money in order to put together the infastructure.

 

If these purchases are still to be included, I'm worried.

 

Think it does - or at any rate, the 1.6m (?) that Hearts paid to the Mercers for the land at the TO ?

 

Didnt they also fork out 5m or something to the council ? Can't remember...

 

And, the money spent on the planning process which I bet isn't peanuts...

[Seymour M Hersh]

This is one very very tenuous financial warren. It's really not that cut and dried. No Federal Reserve lining up to do a Bear Stearns bail-out for Romanov when it all comes crashing down on his "financial empire."

 

Just to keep you straight the fed didn't bail them out they were subsumed by a rival on the cheap.

 

I heard this was coming out a couple of days ago hough my source said it would be in the grauniad yesterday.

[laranjinha]

We're done for.

 

What sickens me is that Hearts fans are not only doing nothing about it but there's also a sizeable chunk of deluded idiots applauding the Fuhrer killing our club.

 

Romanov is a sick joke.

[Charlie-Brown]

It is terrifying figures on the face of it however people are making assumptions and pre-judging the reasons for such a huge loss / debt rise (apparently) without knowing the detail or reasons how these figures were achieved - it is entirely possible that there are 'exceptional' cost items (for example land purchases) that have been put into this years accounts that won't be applicable next year - also after losing Pressley, Hartley, Jankauskas, Fyssas, Brellier, Gordon, Pospisil & Bednar the wage bill must have decreased and there is the transfer fee income of Gordon, Bednar & Velicka (?) which is at least ?11.3 Million if reported figures are to be believed which would reduce debts back to aprox ?26-27M....... but we can't judge anything properly until we can read the details although the headline figures look bad.

[Heaven98]

Just to keep you straight the fed didn't bail them out they were subsumed by a rival on the cheap.

 

I heard this was coming out a couple of days ago hough my source said it would be in the grauniad yesterday.

 

Ah yes....my mistake. But the Fed was on hand before Morgan's rode to the rescue with their eminently generous offer of 2 bucks a share, happily trumping the hastily cobbled together fed rescue package. Not bad for a supposed titan of the financial sector who were bowling along at 170 ne'er two weeks before....

 

Long live the spirit of Enron!

[Francis Albert]

The sensible thing would be to wait to se what the accounts say. But clearly this isn't the JKB way. So how about some practical suggestions. I suggest we protest on Saturday for our highest paid players to be sold to get the debt down. No wait that's been done. I missed the acclaim on here for that sensible step. but never mind. So what else? I know, sell tynecastle and rent Murrayfield. But wait, we didn't like that one. Any other practical suggestions? Or is it just "Romanov Romanov GTF".

[Guest GhostHunter]

Would a projected loss of ?2m for next year be any better ?

[Heaven98]

The sensible thing would be to wait to se what the accounts say. But clearly this isn't the JKB way. So how about some practical suggestions. I suggest we protest on Saturday for our highest paid players to be sold to get the debt down. No wait that's been done. I missed the acclaim on here for that sensible step. but never mind. So what else? I know, sell tynecastle and rent Murrayfield. But wait, we didn't like that one. Any other practical suggestions? Or is it just "Romanov Romanov GTF".

 

Well call me an old romantic, but AFC Heart of Midlothian has a nice ring to it. Never too early to start etc. No reason why it couldn't run in tandem. At least would be a base if things didn't turn out well. I do think there might be some support for the idea.

[Charlie-Brown]

Would a projected loss of ?2m for next year be any better ?

 

Next (financial) year being THIS season?

 

No a ?2M loss would be terrible if it included the Gordon & Bednar transfer fees which are at least ?10M therefore the real loss would still have been ?12M - are you talking a ?2M loss before or after any profit / loss from player trading?

 

This summer we have to sell Kingston & Goncalves and lose Tall & McCann (out of contract) at least from the wage bill whilst making every effort possible to move on Makela & Beslija (& Pinilla if he continues to never play) short of paying off their contracts as we don't have surplus money to do that - but they should get 'horses head in the bed' type persuasion to get them to leave if the club get's any acceptable proposals to move them on.

[Coco]

?10m a year budget is 'no problem'.

 

Well according to Rodney Romanov anyway. So don't get worried.

 

At face value these figures would suggest that the European games barely washed their face vs costs, that the wage bill stayed grossly high, that the much heralded 'commercial improvements' were basically giving money away, that perhaps the club had to pay off some of the traitors, Kingston was paid a preposterous salary etc. Alternatively some assets which we don't know about were bought.

 

If the figures are correct it would seem that the financial running of the club is as amateurish as the football management.

[portobellojambo1]

Would a projected loss of ?2m for next year be any better ?

 

The unfortunate thing is it may not be a projected loss of ?2 million next year Dex. If Ewan's figures are accurate at ?38 million, and I have no reason to doubt they are not, the day after the AGM is convened I expect a situation to exist where HMFC's shareholders will have committed themselves to a situation whereby the club will grant the owner/board the right to take the club's debt level to ?90 million, might not go that much in debt immediately, depends very much on when payments are made in respect of the development work, I assume a large portion will have to be made up front, even if work doesn't actually start until mid 2009. Costs will be added to HMFC's debt, we will just have to hope UBIG have the clout to stand as guarantor to that debt. Come next January/February I would not be surprised if the books show a large, large debt figure .

[Guest GhostHunter]

Next (financial) year being THIS season?

 

No a ?2M loss would be terrible if it included the Gordon & Bednar transfer fees which are at least ?10M therefore the real loss would still have been ?12M - are you talking a ?2M loss before or after any profit / loss from player trading?

 

This summer we have to sell Kingston & Goncalves and lose Tall & McCann (out of contract) at least from the wage bill whilst making every effort possible to move on Makela & Beslija (& Pinilla if he continues to never play) short of paying off their contracts as we don't have surplus money to do that - but they should get 'horses head in the bed' type persuasion to get them to leave if the club get's any acceptable proposals to move them on.

 

Actually that's a fair point....

 

Doesnt the Gordon fee come into the accounts about to released ?

 

Which means we lost ?17m last year (in effect)....

[Coco]

Actually that's a fair point....

 

Doesnt the Gordon fee come into the accounts about to released ?

 

Which means we lost ?17m last year (in effect)....

 

No. The accounts for last year will not take account of the Gordon fee (though it will likely appear as a note to the accounts).

 

Gordon fee will be included in this year's accounts - though most of that will be frittered away on player costs during the year too.

[PTBCAL]

We're done for.

 

What sickens me is that Hearts fans are not only doing nothing about it but there's also a sizeable chunk of deluded idiots applauding the Fuhrer killing our club.

 

Romanov is a sick joke.

 

What are you doing about it?

[pivotno1]

i dont believe the debt includes any land purchases,just makes you wonder where the hell we are going to end up,but at least ubig wont be calling in the debt in,the day they want the debt paid,well thats a differant story.

[laranjinha]

What are you doing about it?

More than you.

[Charlie-Brown]

More than you.

 

That is just nonsense / bravado there is nothing (very little) any of us fans can do about the clubs expenditure as we don't control the purse strings therefore WE cannot control how quickly losses & debts can be reigned in - we can only affect the clubs revenue in terms of season tickets, merchandise, sponsorship, pies & bovril etc. WE fans could actually worsen the clubs financial position if too many people decide not to support the club financially next season.

[Coco]

i dont believe the debt includes any land purchases,just makes you wonder where the hell we are going to end up,but at least ubig wont be calling in the debt in,the day they want the debt paid,well thats a differant story.

 

I don't think it is clear what the UBIG financial situation is. Plenty of firms look likely to go bust in the next year or two.

 

As for Ukio Bankas, it is a tiny bank and presumably the management of it have some responsibilities to its shareholders - it may be forced to call in or sell on the Hearts debt held by it.

[Ribble]

Any chance of waiting till the accounts are actually released?? The figures quoted may well be true but seeing that in the last 48 hours 2 major newspapers in the UK have had to fork out half a million in compensation and publish full page apologies for printing kack, I'll wait before tearing VR & the club to pieces !!!

[monkfish1979]

TBH, the article reads a little like one of those from that football rumours site. The lack of quotes/quick change of subject would normally lead me to believe that Murray was talking from his erse. Have the accounts been published yet?

 

Edit - Murray, not Camerhun - Oops!

[Le Chat]

9 pages on here.

 

16 pages on flumps.net.

[bigwull22]

OF COURSE THIS COULD ALSO BE JUST JOURNALISTIC PAP

[Drylaw Hearts]

Just to keep you straight the fed didn't bail them out they were subsumed by a rival on the cheap.

 

I heard this was coming out a couple of days ago hough my source said it would be in the grauniad yesterday.

 

A couple of days ago !!!!

 

 

I said 6 months ago our debt will be at around ?40million when the next results were released.

 

UKIO didn't extend our overdraft for it not to be used.

 

 

You don't need sources when you have a brain.

[Chaps]

More than you.

 

so what you doing about it then?

[Drylaw Hearts]

i dont believe the debt includes any land purchases,just makes you wonder where the hell we are going to end up,but at least ubig wont be calling in the debt in,the day they want the debt paid,well thats a differant story.

 

It would be the end.

[Sherlock]

Think it does - or at any rate, the 1.6m (?) that Hearts paid to the Mercers for the land at the TO ?

 

Didnt they also fork out 5m or something to the council ? Can't remember...

 

And, the money spent on the planning process which I bet isn't peanuts...

 

Hearts never paid anything to Mercers company for the old TO, that was bought by a Lithuanian company and leased to Hearts so that can't be included in our figures.

 

Re the council land, i've been keeping an eye on this and, as far as i can tell, neither Hearts or a Lithuanian company has bought anything as yet.

 

I may have missed something on the council land issue but the old TO does not belong to Hearts.

[IMA MAROON]

It's not the best news but it is no surprise. As others have said, as long UBIG don't ask for the money we are safe.

 

Time to punt all the high earners and we can stop dreaming of bringing in quality players and a new manager.