Reclining in her leather executive chair at Tynecastle, Ann Budge will be content that months of working with Craig Levein have brought a clear strategy to a previously rudderless ship.
The restructuring of Hearts has certainly been a long time in the planning.
Budge is the necessary bridge to fan ownership and has a contract to hand the Edinburgh club over to supporters’ group Foundation of Hearts within five years. Yet the idea that brought her into office stretches back way beyond any plans she and Levein concocted since last year.
For the five original Foundation members, Budge entering Tynecastle was the culmination of more than four years’ hard toil and relentless campaigning. Alex Mackie, Brian Cormack, Garry Halliday, Jamie Bryant and Donald Ford aren’t the types to seek public attention or praise. Yet they planted the roots for this fan-led buyout. Whether they wish to or not, they should have their names etched in Tynecastle folklore.
They worked quietly together since early 2010, believing the day would come when the combined strength of the club’s supporters would be its saving grace. That day arrived when Budge paid £2.5million of her own cash for an 80 per cent shareholding, which she will eventually pass on to the Foundation and their 8000 subscribers. After countless meetings, plans, counter-plans, cash injections, websites, appeals, press releases and pledges, that deal sent Hearts supporters on the way to owning their club.
Delving into the history of this movement reveals a delicious twist of irony: Foundation of Hearts was indirectly sparked by none other than Roman Romanov. Budge’s predecessor as chairman, the son of former owner Vladimir Romanov held an angry exchange with Mackie at Hearts’ AGM in 2008. This prompted Mackie to act. He takes up the story which ultimately led to the Foundation being established.
“Roman Romanov was laying out plans for Hearts’ future and it was clear in my mind, as an accountant, that the club would be ending up with something like £90m of debt. That would have been totally unserviceable,” recalls Mackie, a 60-year-old who runs his own company.
“I chirped up and said to young Romanov that this was unsustainable and that he was going to take the club down. He started asking me questions about who I was and if I was a businessman. I said I was. I knew where he was going with the conversation. I said I financed my business through capital, equity and bank loans. When I said bank loans he said, ‘what’s your problem, because we own the bank’. My remark was that if I was a shareholder in that bank then I’d be selling my shares right away.
“I’ve been a Hearts shareholder since the late 1970s and never before at an AGM have I had one of the security team sent across to stand beside me. This steward was pressurising me, telling me to let Mr Romanov finish. I argued that he had finished and the security guard repeated ‘allow Mr Romanov to finish’. I suddenly realised he had been sent to stand beside me and shut me up. I thought this was crazy. It just underlined the need for something to be done.
“Given the scale of what needed done, there was never going to be one individual to come forward. It had to be the totality of the fans who were going to make the change and it was a case of how do you harness this? I began to talk to people and exchange ideas. Word got around and I learned Brian Cormack, Garry Halliday and Jamie Bryant were also putting together plans for fans’ ownership.
“They arrived in my office for the first time in late February 2010. These guys are behind the Foundation as much as me. They got us links to Sergejus Fedotovas [former Hearts director and Romanov confidant] and Gary Mackay. Gary was very concerned about what the Romanovs were doing to Hearts too, so the whole idea was born out of real distaste for the way the club was going.”
That first meeting ended abruptly, however. Halliday, a bricklayer to trade, had initially been put in touch with old golfing buddies Cormack and Bryant by Mackay. “Gary Mackay said to me, ‘I need you to come along to the Caledonian Hotel’. It was the first time I’d met Brian and Jamie,” says Halliday. “Their idea was to get 8000 fans paying £3000 each and buy the club, mine was £5 a week from 15,000 people, so we were on the same tracks. I have an architect friend, Charlie Aitken, and it was him who brought us to Alex. Charlie’s daughter is married to Alex’s son.
“Jamie and myself went along to meet Alex. Charlie was a bit wary. He said, ‘I’ll take you to meet Alex, but I’ve got to warn you, Alex is intense’. We were up for it. Alex welcomed us into his office and suggested going out for a coffee. We were having a chat about our plans in this bar and someone came in to use the internet. Alex just stopped talking and suddenly we’re on the way back to his office again. That’s the way Alex was, he left nothing to chance and didn’t want any information coming out. He was bang on with that.
“He was very busy at the time, he was about to run the London marathon. In the end he virtually threw us out of the room. He said he was too busy with his work and couldn’t get involved in our plans, so Jamie and I kind of got ushered out of the door. I was a bit disappointed. Jamie turned to me outside and said, ‘he’s hooked’. I looked at him as if he’d lost his mind. He repeated, ‘Garry, he’s hooked’.
“Sure enough, Alex phoned us the next day. He said, ‘you need to come back in. I’ve had a sleepless night’. Brian came to that second meeting and we went from there. Alex pushed things on, no question.”
Cormack produces a document entitled ‘Tynecastle 8000’ from April 2010, detailing the above plan to harness Hearts supporters and gain control of the club. Mackie’s original documents are dated around the same time. Each man put in £1000 of their own money to get Foundation of Hearts off the ground. They didn’t seek recompense. Their only concern was safeguarding their club.
To do so, they had to learn how to negotiate with Fedotovas and the Lithuanians who controlled Hearts. “We first met with Sergejus in 2010 at the Balmoral Hotel,” explains Cormack, who owns an Edinburgh property business. “Vladimir was over at the time, but he didn’t come down and meet us. We went over to Lithuania the following year and still didn’t get to meet him. It was Sergejus, who is a lovely man but didn’t make the decisions.
“We went to Lithuania to find out if Romanov would sell to the fans and at what price. We came back with the answer. He would sell to the fans and Sergejus got really agitated that the price would be £50m-£60m because that’s how much Romanov had invested, we were told. You could argue whether that was invested or wasted, but we came back hopeful. There were so many meetings to be honest.”
One, at Cormack’s office in Melville Street, revealed much about Lithuanian bargaining techniques. “We had talked to Sergejus about a number of proposals. We hadn’t gone to the media, we’d stayed quiet and that’s why he continued dealing with us,” explains Mackie. “We were round the table with Sergejus, Vitalijus Vasiliauskas [then-Hearts director] and the club lawyer for several hours. It had been widely reported that the Lithuanians were looking for £60m for the club.
“We had narrowed the bid down because we all realised the club was worthless. We knew there was a serious funding gap of a couple of million pounds a year. You could sense from discussions that they were looking to do a deal with us. After going out of the room for a long deliberation, Sergejus returned and said if we really wanted the club, the price was now £70m.”
“Donald Ford nearly jumped across the table,” recalls Cormack. “There was another meeting late in 2012 after we had offered £450,000 for [control of] the club to pay off an outstanding tax bill. Vitalijus and Sergejus were pretty much begging us to get an offer in by then. As they were walking out the door we told them that, if there was an offer coming in, it would be ‘low millions’. They asked, ‘what is low millions? Is that eight?’ We said it would be more like two. As they shook our hands going out the door, they said, ‘get an offer in, just get an offer in’.”
By then the Foundation were in tow with millionaire Budge. She had first been mentioned to Mackie by Mackay during early Foundation meetings. “I was aware of her because Newell and Budge, her IT company, was just along the road from my offices in Ravelston Terrace,” says Mackie. “She was originally brought on board for her IT expertise. The situation changed once Hearts went into administration last year because it became clear there was an opportunity there for Ann.”
Budge’s £2.5m funded the Company Voluntary Arrangement (CVA) which should take Hearts out of administration next month. She will work with the Foundation before stepping aside and allowing them to take control. Ford, Mackie and Bryant are no longer on the group’s board, but Cormack and Halliday remain actively involved.
“There is an enormous amount of work to be done by the Foundation board, starting now,” says Halliday. “We need to make sure pledges stay at this level or go higher and that BIDCO [Budge’s holding company] get paid back their £2.5m. I’m up for it and so are the rest of the Foundation directors. We’re hoping other fans join us. We’ve built a vehicle, it’s up to the fans how far they want to drive it.
“If people put their hand up and want to come in, I’ll gladly pass this on. Then I can have a pint in the Merchy Hearts and watch the fitba’. As long as the people in charge have the same ethos we started with and take it forward professionally. I’m not a businessman. I listen from a fan’s point of view. To be on the Hearts board and have your name everywhere, that’s not for us. It’s just been about saving the club.”