EVERY year of Vladimir Romanov’s tenure at Hearts brought high points and low points. There is no question 2013 was the nadir. The ripples from the collapse of the Russian’s business empire in eastern Europe were felt hard at Tynecastle, where the resulting administration has had a devastating effect.
Russian’s business empire in eastern Europe were felt hard at Tynecastle, where the resulting administration has had a devastating effect.
Hearts fans will indeed be eager to see the back of 2013. If the saying pride comes before a fall was ever in doubt, then the last two years in Gorgie seem to encapsulate that very theory perfectly. The euphoria of 2012 and that unforgettable Scottish Cup triumph over Hibs was followed by the proverbial annus horribilis.
It started with outgoing transfers as two heroes of that aforementioned cup final win headed for pastures new. The ever-popular Ryan McGowan went to Chinese club Shandong Luneng Taishan in a deal worth around £400,000. The club’s biggest earner, Andy Driver, joined Houston Dynamo in the United States.
Their departures were the latest cost-cutting measures from Hearts’ Lithuanian board which had already spent the latter part of 2012 trying to raise vital funds. The situation was to get desperate later in the year but first there offered some cheer as the club reached the League Cup final by beating Inverness Caledonian Thistle on penalties at Easter Road.
Three weeks before that showpiece, manager John McGlynn was sacked.
Results were deemed not good enough by Romanov and his directors and Gary Locke was placed in temporary charge. His appointment was made permanent in traditionally bizarre timing 24 hours before the cup final, which Hearts lost 3-2 to St Mirren despite two Ryan Stevenson goals.
In April, Romanov had all his assets frozen by a Lithuanian court as he and his sister, Olga Goncaruk, were being sued for “large debts”. His bank, Ukio Bankas, was by then in administration. The emergence of Foundation of Hearts, the fans’ umbrella group, led to hopes of a takeover at Tynecastle by supporters but with assets frozen that would not be easy. The club had been up for sale for some time without finding a serious buyer.
Cost-cutting continued at the end of the season, with assistant manager Edgaras Jankauskas leading the exit from Tynecastle. Captain Marius Zaliukas, Andy Webster, Darren Barr, Mehdi Taouil, Arvydas Novikovas, Danny Grainger, Gordon Smith and Fraser Mullen all left on freedom of contract, signalling the end of an era in more ways than one.
On June 19, the landscape changed completely when Hearts announced they were entering administration with debts of more than £25million. The board had used all funds from 7000 season tickets sold for the 2013/14 campaign, plus £1.1m from a share issue launched late the previous year. Those shares would never be allotted as the extent of Hearts’ financial troubles was laid bare. Quite simply, cash had run out. There was just £7000 left in the club’s bank account.
The Lithuanian regime promptly headed off into the sunset to leave others to deal with their carnage. Their last act was director Sergejus Fedotovas signing off in a tasteless email to staff which ended with the words, “all you have done will take its place in history”. Fourteen of those staff would lose their jobs the following day, nine full-time workers and five part-time.
BDO were appointed administrators at the request of the Ukio Bankas administrators, Valnetas. As Hearts’ biggest creditor, they had the power to overrule the club’s wish, which was to let KPMG take charge of their restructuring. Bryan Jackson and Trevor Birch of BDO came into Tynecastle and dispensed with 14 office staff, whilst asking the major earners in the dressing-room to take pay cuts. Jamie MacDonald, Jamie Hamill and Stevenson agreed but striker John Sutton opted to leave to rejoin Motherwell.
Jackson also appealed to fans to rally for the cause once more and help him sell 3000 season tickets within two weeks to generate urgent cash. That milestone was reached and many other fund-raising events brought in additional income, allowing Jackson and BDO some breathing space. On the field, life was to become extremely difficult for Locke and his squad.
The administration triggered an automatic penalty of 15 points under the new Scottish Professional Football League (SPFL) rules, which would take effect for the new campaign. That left Hearts adrift at the bottom of the league before a ball was even kicked. There was also an instant registration embargo applied for “suffering an insolvency event”. Nonetheless, Danny Wilson was signed permanently from Liverpool as he was already registered to Hearts following his loan spell. Billy Brown arrived to assist Locke without pay when pre-season training began.
Angelo Massone and Bob Jamieson submitted bids to rival Foundation of Hearts on July 12 as BDO looked to identify a preferred bidder with the best chance of taking Hearts out of administration via a Creditors’ Voluntary Arrangement (CVA). All three were invited to submit proof of funding for their offers but only the Foundation did so. The following month, the fans’ group – now led by the Edinburgh MP Ian Murray – were named preferred bidder with more than 6000 fans pledging to their monthly membership scheme.
The SPFL issued Hearts an additional punishment at the start of August, prohibiting them from signing players aged 21 and over until February 1, 2014. Two days later, an international arrest warrant was issued for Romanov as part of a large-scale embezzlement investigation taking place in eastern Europe. The Russian was believed to have fled to Moscow and his whereabouts since are unknown.
After the most tumultuous summer in living memory, Hearts finally began their league campaign. Wins over Hibs and Aberdeen in August quickly reduced their 15-point deficit to eight, fuelling hopes that the avoiding relegation would happen. However, only one league win since has seen the gap at the bottom of the table widen again. It currently stands at 14 points.
October brought arguably the fans’ most enjoyable on-field moment as Hibs were beaten in the League Cup quarter-final at Easter Road. Ryan Stevenson’s goal secured a second successive place in the semi-finals and also, ultimately, forced Hibs manager Pat Fenlon to quit.
November saw a vital creditors’ meeting go Foundation of Hearts’ way as their £2.5m conditional CVA offer was approved. Their takeover depends on obtaining a 50 per cent shareholding in Hearts held by Ukio Bankas Investment Group (UBIG), another Romanov company which is also in administration after filing for insolvency. Ukio Bankas hold 29.9 per cent of the club’s shares and will pass them to Foundation of Hearts if the CVA process can be completed.
Hearts’ future remains unclear heading into 2014. Much depends on events in Lithuania, with all connected to Tynecastle praying they can exit administration and rebuild. That may well be down a division but, if nothing else, simply leaving 2013 behind will be a relief in itself.