Following on from Specs Haver’s thought-provoking suggestions that football could be about to join our financial markets in recession, I’d like to pose another hypothetical scenario in relation to this: what would happen to Hearts if Vladimir Romanov’s bank went bust?
You might think that it’s an unlikely scenario, but then given what’s happened at the likes of Lehman Brothers this week, we really shouldn’t be surprised by anything like this in the world of
finance at the moment.
So…….what would actually happen as far as Hearts were concerned if the bank that effectively ‘owns’ all of the club’s debt, Ukio Bankas, went bust? Would it be silly to suggest that it might actually be a good thing for the club, given that this could effectively see the debt completely wiped out with no threat of the bank suddenly transferring it back our way, as many fear may happen if Romanov decides to pack his bags? It could well be very silly, but to be honest I don’t have the in-depth knowledge in this field to answer that for sure, but I’d have thought it would be at least a possibility.
I’m quite sure that Vladimir Romanov would continue to be a very rich man even if this did happen – he’s a clever enough guy so you’d have to imagine that he’ll have his finances well dispersed and looked after – but I do wonder if this eventuality would also present an opportunity for another buyer to purchase Hearts on the cheap, too. I suppose it would depend on Romanov’s position at the time i.e. would he have enough cash to continue retaining a Scottish football club as his play-thing, or would he simply be determined to sell whatever assets he had left to raise some emergency cash, etc? Again, without full knowledge of all the details in relation to who owns what and how much, it’s impossible for me to say, but it’s certainly intriguing……and potentially worrying!
As I said at the start of the article, this is a very hypothetical situation, but given the current climate and the fact that Hearts’ owner is a renowned banker (sorry – slight typo there!), I thought it would be worth floating the suggestion to see what any resident experts out there made of it……….
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I am no expert by any means, but I do fear slightly for Hearts in the current climate. I don?t think that a collapse of Ukio Banks would be beneficial for Hearts, as the chaos that follows would make the Gretna saga pail in comparison. The risk is that Hearts would go bankrupt as well; no wages and the current structure (I know it is a dubious structure, but it is one never the less) would fall apart. I could imagine a nightmare scenario where there was no wages being paid, assets was ripped out of the club and Hearts became relegated as a result. I don?t want to scaremonger (I think I am already), but I do not think that Ukio Banks has any emotional ties to Hearts and would just see it as another asset if push came to shove. I suppose one would hope that Hearts is worth more to them if the club is kept whole?
Also, who would be the knight in shining armour who would step forward in the current climate? Some Arabic sheik? I doubt it.
On a positive note, a lot of Russian/East investment is linked to Russian oil and gas and that is, at least for now, a safe market, which might make Ukio Bank a more stable partner (I am speculating now).
It’s all any of us can really do… speculate. At the moment, there is no indication that any of the Eastern-bloc financial institutions are in any kind of danger, and with the US government putting billions of $$$ into the market to stabilise the whole thing and the Bank of England following suit, you have to hope that we’ve hit the worst of it.
Yeah you’re both probably right. This was something that a mate of mine suggested last night and it’s the sort of thing that does make you think “hang on…”(!), but as I said it is just purely hypothetical. The problem for the likes of us is that because the Romanovs seem to have so much power over the club, it’s very difficult to know exactly what they own and what rights they would have if such a scenario did present itself. Maybe we should just hope that it never happens…
Well, one immediate consequence of all this wierd financial stuff (which I don’t understand either – as you could probably tell from my rambling article !!) is that the announced purchase of £ 12m debt by UBIG (in exchange for new shares) might not go ahead !! So, if it goes ahead, then I guess that’s a decent sign that UBIG is healthy enough to still want to own our wee club.
Mmm that worries me, if you?re right SH, although it could also just be an indication that they are taking precautionary measures in the current climate.. Hell knows… It is a mad time o say the least
Daily Ranger are reporting today that none of the Hearts staff (including players) have been paid this month. Hearts are playing down the issue, saying that it’s purely down to technical reasons, but even so it’s not a good sign. 🙁 Of course, you have to consider the source…
Not the first time this has happened, but the story in the Ranger is a genuine s**t-stirrer. Most of it is pure speculation over and above the single fact that they’re communicating.