European success vital for Romanov

MARTIN GREIG November 01 2005

The success of the Vladimir Romanov revolution at Hearts will rest on the club's ability to compete regularly in Europe, claims David Glen, author of PricewaterhouseCoopers annual review of Scottish football, published today. Romanov, who became the club's majority shareholder a fortnight ago, has spoken of his desire to make Hearts a force on the European stage.

Glen maintains that such success is actually vital in sustaining Romanov's business model. He said: "Hearts' debt is around about the £20m mark, which is the same as Celtic's. Celtic's turnover is around £65m, Hearts' is seven. They've been doing fantastically well this season, but they still need something pretty transforming to truly compete with the Old Firm.

"If they can keep it going and get into the Champions League then that will generate seven or eight million, which would double their income overnight. There's always going to be a bit of a gamble there for Hearts, with the whole idea of speculating to accumulate.

"The money he's [Romanov] spent so far has been to acquire shares, it's not been directly into the club. We'll really see what his plans are now that he's got full control. They're talking about redeveloping the main stand, which is going to take a few million quid, so we've still to see how that will be funded.

"Is he willing to finance that himself? I would suspect that the longer-term ambition is that the club starts to finance itself through consistent appearances in Europe."

The review, based on analysis of the premier clubs' annual accounts from 2003-04, reflects a major reduction in the net debt of the Premierleague, along with a diminishing wage bill and an increase in turnover.

It is the first tangible indication that a financial recovery is under way after more than a decade of massive losses, crippling debt and three clubs plunging into administration.

Glen said yesterday: "This is our 16th year of compiling the report and, for the last 15 years, the graphs have all been going the wrong way. This is the first season where we can really see a significant change."

There was a sizeable reduction of Scottish football's debt mountain in 2003-04, with Rangers' rights issue making a particular difference.

"The debt peaked around the £190m mark, but we know it's now down to about £130m and falling," said Glen.

A total of £11m of debt was also written off as a result of Motherwell and Dundee's emergence from administration. Absolute losses totalled £14m, compared with £53m the previous year.

There was negligible expenditure on transfer fees, and Rangers, Dunfermline Athletic, Hearts and Kilmarnock all made profits.

Taken from the Herald