Date: 7th March 2010 at 8:59pm
Written by:


Director Sergejus Fedotovas mentioned in his recent statement that the club were now focusing on a “stand only” planning application to replace the original Main Stand, instead of the previous grand idea of having a hotel and offices as well. To most of us, this simpler solution always seemed like common sense – especially in the current economic downturn. So instead of a £50m project, we might be looking at a £20m spend – still a huge undertaking for a company with an annual income of only half that amount.

So how can Hearts possibly take on this huge new debt – especially when it`s added to the huge current debt ? It seems Sergejus is confident of finding various sponsorship and financing arrangements so that UBIG / Hearts aren`t faced with the full cost up-front, with the stadium possibly being renamed to include a company or brand name. I just hope we don`t end up with the ultimate irony of visiting the Tynecastle Cala Homes Stadium !!

The Hearts website still has a page proclaiming the new-look “Tynecastle 2010”. Clearly a new stand won`t now materialise this year. Indeed, it wouldn`t surprise me if Archibald Leitch`s stand sees it`s Centenary year in 2014, before making way for a modern replacement. Let`s just hope that the planning application process is a lot slicker second time round.

Fedotovas also hinted that there could be another debt-for-equity adjustment soon, similar to the £12m movement last year. This is really a paper exercise, which increases the “value” of the company to any potential buyer, and allows the accounts to show that the assets cover the liabilities. However if UBIG is going to invest £20m in a new stadium, I think they`re going to want a proper revenue stream from it – and that could mean a rent from Hearts. In other words, we could see Hearts Football Club selling Tynecastle to UBIG and then pay a “healthy” annual rent for the use of the stadium.
If this is indeed the Romanov plan, it also opens up the possibility that UBIG might one day be willing to sell Hearts (the football club) to a new owner, while retaining ownership of the stadium. Would UBIG actually wipe out the Hearts debt by such a transaction ? It`s hard to say – but if the club was left with even just a £10m debt, it could take 20 years or more to trade their way into the “black”.

The next AGM is likely to be held in late March or early April, once the Accounts are issued for the 12 months ending 31st July 2009. The debt at July 2008 was £30m, with Christophe Berra being sold in January 2009 for £2.3m. However if you`re expecting our new debt to have come down, I`d urge you to think again. The club were “losing” around £5m per year – due mainly to excessive wages and fees plus accrued interest due to UBIG – so I`d expect the new debt to be around £33m.

Only in the following 12 months can we expect a slight reduction in the operating loss to kick in, with Neilson, Aguiar and Karipidis off the wage bill. 12 months after that, another reduction due to the departure of Nade, Goncalves and Kingston should improve things further, with the likely sale of Lee Wallace and Andrew Driver in these 2 periods helping also.

What do you think our new debt will be ? Do you foresee the new stand being built in the next few years ? and how would you feel about taking your seat in the ‘Tynecastle KFC Stadium’, no longer owned by Hearts ?