T HE good news from Hearts the other day was that, thanks largely to their supporters' "sterling efforts", they had reduced their £2m funding shortfall by almost half.
The bad news was that funds for the other half still need to be sourced and again they expect the fans to provide them.
The statement from Sergejus Fedotovas, owner Vladimir Romanov's man on the ground, amounted to little more than a further plea for the support to dig them out of a hole. Given all they have done in terms of buying shares, merchandise and match tickets, on top of their own fundraising initiatives, there must surely be a point when the well simply runs dry and those who populate the terraces can give no more.
The long-term aim is to get Hearts to a point where they can be run in a way that is sustainable, with little or no debt and their outgoings matched by their revenue. To get there, however, the club needs to overcome a number of hurdles. A bill of £450,000, relating to unpaid PAYE and VAT, has now been settled with Her Majesty's Revenue and Customs, thanks largely to the generosity of the supporters. A further tax bill of £1.5m, after Hearts elected to admit liability rather than fight charges relating to payments made to players loaned from Lithuania, is to be paid up over three years starting from May. There is the aforementioned funding shortfall now standing at £1m, as well as debt in the region of £22m.
Hearts launched their share issue in October, making more than 16 million shares available at 11p each, in the hope of raising £1.79m. With the deadline of December 19 now less than two weeks away, and the club having admitted it is a scheme designed to help pay their bills and plug funding gaps rather than any kind of genuine investment opportunity, getting close to that total seems somewhat ambitious. Already close to £1m has been raised, an impressive amount for a club whose average attendance is around 13,000, but still the club want more.
Their language has been emotive from the start, warning that Hearts could go to the wall or that there could be further trouble with HMRC if sufficient sums were not raised. And, to the backdrop of deafening silence from Romanov in Lithuania, the fans will continue to do all they can, all the time knowing their money could well be going into a bottomless pit. Fedotovas has asked the fans "to stand up and be counted" but they are surely entitled to ask whether those running the club are doing likewise.
With little prospect of any immediate upturn in revenue streams beyond the sale of half-season tickets for the remainder of the campaign, Fedotovas has warned that the club may have to further address their cost base. That will likely come in the form of further reducing the playing squad next month by moving on a number of high earners – at least one player is thought to pick up a five-figure weekly wage – and looking to recoup transfer fees wherever possible. That reduction in numbers will place further strain on manager John McGlynn but may be the most prudent and immediate way to address Hearts' plight.
The hope is that all this turbulence will be the catalyst for an eventual change of ownership and talks have begun with a view to supporters eventually assuming control. Any transition will likely be far from smooth, however. Romanov remains coy about how much exactly he wants for his majority shareholding – a bid of £4.5m from Angelo Massone, the former Livingston owner, has already been thrown out – and any deal may be complicated by the prospect of UBIG retaining control of Tynecastle, estimated to be worth in the region of £12m, and leasing the stadium back to any new owners. The massive debt, it is assumed, would be written off as part of any agreement.
There are no shortage of candidates willing to front a community bid. Supporters Direct Scotland have been involved in negotiations with the club regarding the mechanism and structure of any potential fans takeover, while Hearts also have a long-established and warm relationship with the G10 umbrella group that incorporates the Shareholders Association, Supporters Trust, Federation of Hearts Supporters Clubs, and Fans Forum. On top of that there is the Foundation of Hearts, a group of Edinburgh businessmen, who have also recently expressed an enthusiasm to be part of any fans-led changing of the guard.
As the supporters have shown by their response to the recent call to arms, there are plenty of people willing to take the club forward in the longer term. First, though, Hearts have to safely negotiate the choppy waters ahead.