Hearts administration: The club’s ‘darkest day’

ALAN PATTULLO
Published on 18/06/2013 00:00

A DAY described as the “darkest” in Heart of Midlothian’s history saw confirmation of an intention to appoint administrators as years of financial mismanagement caught up with the 139-year-old club yesterday.

Fraser Wishart, chief executive of PFA Scotland, has pledged to do all he can to restrict the number of player casualties at Tynecastle.

“There is a case for saying Hearts have to retain a playing staff of some quality if they are playing in the Scottish Premier League next season, as they are under a transfer embargo, and cannot bring anyone else in,” he said.

From the moment players were informed by text message that the club were in the process of lodging papers at the Court of Session in Edinburgh prior to entering administration, Hearts began harvesting the bleak destiny of seeds sown eight years ago. This is when Vladimir Romanov’s initially high-spending reign began. Within months Hearts were riding high at the top of the Scottish Premier League. The club will be handed a 15 point penalty by the SPL at the start of the new season. With players as well as other staff members contemplating the prospect of redundancy, Gary Locke’s side now face an almost certain relegation struggle, presuming the worst-case scenario of liquidation can be avoided.

“My heart goes out to the staff, and to the fans, who have put millions into the club to try and keep it going,” said Ian Murray, the independent chairman of Foundation of Hearts yesterday.

“The inevitability of the administration process is pretty heart-rending for them,” added Murray, who is the Member of Parliament for Edinburgh South. “This is the darkest day in the history of the club but there is a very slim silver lining in the sense there might now be some clarity about the ownership of the club and the actual financial situation.”

Wishart will arrange to meet with the administrators, who are expected to be KPMG, as soon as is practical, as he re-engages with what has become a familiar
routine.

“We can only hope from my side that because the wage bill has been pared back and cut so much in the 12 months that there might be minimal damage to the playing side,” he said.

“My first port of call will be with the administrators after they are formally appointed, and we will have a meeting in the early course. In footballing insolvencies, the cost base that is usually attacked is the players.

“We would normally ask to see cash flow predictions, and see what we can do to work with the club. The Rangers players last year worked with the club. I don’t know if that would work again with the Hearts players.”

Wishart acknowledged that his players’ union is now “well versed” in dealing with administrations, although it gets no easier for him personally. The former full back counts Hearts as one of his former clubs, having signed for them in 1995. “I had a year and a half at Hearts that was sadly curtailed by injury, so I know the size of club they are,” he said. “It has always been one of my favourite grounds to play at, either for or against Hearts. It just saddens me that yet again one of our biggest clubs are in financial difficulties,” he added.

“Administration is a complex mix of football regulation and insolvency law, and I think we can only hope that people can rally around the club in these coming weeks,” he added.

“Because when an administrator is appointed he needs cash
to run the club and pay the bills. For me, the Hearts fans have been absolutely magnificent in the last few years. You just cannot say enough about them. That they gave so much money at Christmas time during these hard financial times is remarkable.

“Yet again they are the ones who the club will turn to try to keep it alive.

“If any Hearts supporter feels they can’t or won’t put their hand in their pocket, then they should not be criticised. They have been remarkable.”

Wishart has cautioned against presuming that administration can be overcome, with the club emerging as a financially fitter, better-equipped entity. Rangers proved last year that this is not always the case. The Hearts situation is also not straightforward, with UBIG – which owns a 50 per cent stake in the club – and 29.9 per cent shareholder Ukio Bankas both in the midst of being declared insolvent in Lithuania. Both firms were formerly controlled by Romanov.

“What has happened at Rangers last year, with the company going into liquidation, has focused people’s minds,” he said. “There were so many administrations in the UK and a number in Scotland previous to it, that people thought administration was a good thing, because you come out the other side.

“What happened with Rangers last year proved that does not always happen. We are now in the hands of administrators in Scotland, and administrators in Lithuania – they hold the key to Hearts’ future.

“Having been on the inside of it at a number of administrations and played a role with the administrator to try and keep the club alive, I have always stressed that administration is a very painful and horrible process,” he added. “Some of the worst days of my professional life have been inside football clubs when people lose their jobs.

“Emotions run high. And players and backroom staff and other staff lose their jobs.

PFA Scotland will now look to unpick the complicated case of former Liverpool defender Danny Wilson, who signed a much publicised three-year deal with Hearts just three weeks ago, although he has not yet been registered at the Scottish Football Association by the Tynecastle club.

“It is an interesting one,” said Wishart. “If you think back 12 months or so, you had Duff and Phelps trying to register Daniel Cousin with Rangers. Sometimes people do the strangest things in such desperate times.

“It is now going to be a very complicated situation with regard to Danny’s contract, and his registration. From what I understand he is not registered with Hearts and therefore he cannot now be registered with Hearts, because there is now a registration embargo.

“We are now in an area of contracts versus football registrations and it must be a tough time for Danny as an individual,” he added. “I hope Danny went into it with his eyes open and was made aware by his representatives of the potential implications of it all.

“If a contract is signed by both parties, then it is binding – and that is where we get into the minutiae of football registration and transfer windows and such procedures.

“Until we know the details, I cannot comment specifically. But you have to wonder why the club entered into that agreement, when they knew they were struggling financially.”

Murray, meanwhile, sought to look to the future, and urged all interested investors to now show their hand. “If I had a pound for every time ‘Scandinavian consortium’ has been mentioned, I would be buying the club myself I would be so wealthy,” he said.

“The end game for us as a body of fans is to buy the club so the supporters can own the club, and the second end game is for us to be so proactive that we flush out a potential new owner and they come in and buy it. Either way, the ultimate goal is to get a new owner as quickly as possible.

“The message for Hearts fans has to be, you need to get on the Foundation of Hearts website and pledge because it might be the Foundation of Hearts’ money that keeps the club going in the meantime, and ultimately gets us out the other end,” he added.

“They can do it from now, the system for converting those pledges should go live tomorrow.

As for the Romanov era, Murray said: “It’s been an absolute roller coaster. It was always inevitable that unless Hearts moved on to a different level of regularly getting into the latter stages in Europe, it would be unsustainable. That has come back to haunt us today.

“To be fair to other clubs, they have lived within their means, Hearts have not. That’s a bitter pill to swallow not just for them, but other Hearts fans.”

Taken from the Scotsman