Hearts' aim is 'slightly above just surviving'

Four Hearts players are likely to be made redundant as administrators BDO cut costs at Tynecastle to try to keep the club in existence.

No names were released last night, but BDO's Bryan Jackson revealed that two first-team players and two youth players have already been identified as potential victims. This follows 14 office staff being informed that they will be losing their jobs.

It was a bleak day at Tynecastle, with manager Gary Locke having returned from holiday to a raft of meetings about the fate of the club. The situation is stark, with Jackson revealing 3000 season tickets need to be sold, on top of the 7000 bought so far, just to keep Heart of Midlothian Football Club plc operating until the beginning of the season.

There are no other revenue sources, unless players are sold, but costs remain and Jackson admitted that the current situation is "as desperate as anything I've seen". He is being assisted by Trevor Birch, who oversaw the last administration process at Portsmouth, and James Stephen, who is one of the BDO partners currently working on the liquidation of Rangers Football Club plc.

Money raised from season ticket sales would be used to pay salaries and costs, and Jackson revealed that he and his colleagues will not be paid until a CVA has been agreed. The players who remain at the club may also have to agree to wage cuts, although they would seek contract clauses in return for such a deal.

"We regret the job losses but we really had no choice because we have to reduce costs immediately," said Jackson. "The squad has already been cut quite drastically prior to our involvement so we're trying to retain what's left, but if people won't buy season tickets then you're running out of options in how to generate money. We are trying to remain competitive. Our aim is slightly above just surviving.

"We have inherited a fairly bleak situation in that there is no cash in the club at the moment and there is also no income due. We've decided, to try and generate cash, we're going to make a plea to the fans to sell 3000 season tickets within the next 14 days. If we reach that we will then be in a position where we can fund the club going forward, per the cash flows which we've carried out very quickly of course.

"It does indicate it would give us four months, which although a short timescale for trying to put everything into operation for a CVA, it makes it possible to keep the doors open and to honour those season tickets in that period. It should also mean we should be able to keep the rest of the squad together."

There are four serious and credible bidders considering making an offer for the company that operates the club and for ownership of Tynecastle. The situation is complicated by the fact that Ukio Bankas – who are owed £15m, hold 29.9% of the HMFC plc shares and are in administration themselves – hold a floating charge security over the stadium. That allows them to consider selling the ground as a separate entity, although so far the Lithuanian administrators of Ukio Bankas have expressed a desire to sell HMFC plc and the ground together as a package.

The other major creditor is UBIG, who are owed £10m and who hold 50% of the HMFC plc shares. They, too, are on the verge of insolvency, and the likelihood is that Jackson will be negotiating with two Lithuanian administrators over the future of Hearts. He estimated that £800,000 will be required to see Hearts through the summer, but was hopeful a rescue package could be found. Among the interested parties is Foundation of Hearts, a coalition of supporters groups that is currently turning pledges from fans into money to fund an offer. The team will, though, begin next season with a 15-point deficit due to the insolvency event.

"Our biggest problem right now is we're in June, there is no cash coming in and we have to generate cash," Jackson said. "If the season ticket money comes in, and we'll also be looking for the usual alternative donations, it puts us in a situation where we won't be forced to fire sale players and we can try and keep the rest of the squad intact, which means we retain value. All we can do is the usual pleas to the fans to rally round.

"We know they've given and given but we're still asking to give again because there is really nowhere else for us to go. Our only other choice is to sell as many players as we can and operate that way. If the strategy of our plea to the fans in terms of season tickets and in terms of donations works, then we will be in a position where we can fund the club going forward and actually get into the opening season."

Jackson will travel to Hampden today to try and assuage any fears that the Scottish Football Association and Scottish Premier League have that Hearts might not be able to fulfil their fixtures, which were announced on Wednesday and slated the club to host St Johnstone on the opening weekend. He said: "We cannot give false hopes and promises, but of course it is savable."

Taken from the Herald