SERGEJUS FEDOTOVAS and his fellow Hearts directors are fighting to save one of Scotland’s greatest institutions. Without extra funding, the Edinburgh club will be out of business by next week. Fedotovas admits administration is an option, but it is last on a list of choices that is by no means long. For now, it’s all hands to the pump as the Tynecastle board work feverishly to find cash to keep Hearts alive.
Speaking exclusively to the Evening News, Fedotovas explained that Hearts simply did not have money to pay the £449,692.04 PAYE and VAT which led to Her Majesty’s Revenue and Customs lodging a winding up order at the Court of Session in Edinburgh last week.
It is clear, even from the tone of his voice, that the Lithuanian is gravely concerned. No-one should underestimate the severity of the situation. Pointing fingers and attributing blame is easy, however Hearts’ very existence depends on how much cash is raised over the next ten days. It is that simple.
On top of the PAYE and VAT bill due to HMRC, the same authority is pursuing £1.75m in unpaid tax for players loaned from Lithuania between 2005 and 2010. Hearts are contesting that matter in court, with a hearing due this month. A share issue was launched recently and Fedotovas arrived in Edinburgh this morning to deal with the problems first-hand. He will also attempt to galvanise a support already angered by years of financial mismanagement.
“We will be looking at all possible solutions. We believe it is possible to resolve this situation,” said Fedotovas. “It’s not without reason that we announced this share offer and it’s not without reason we’ve done all this work. I believe Hearts find themselves in a really serious situation and it’s important people understand that before it’s too late. For those who really care, people who call themselves true supporters, it’s the right time to stand up and be counted.
“The truth is that we need supporters to help the club out of this situation. We are doing what we can and we have a plan. We have income for the club for the future which is budgeted for, but at the moment this is another shortfall.
“There is nothing we can do. There is no bank, there is no institution that will lend to the club in Scotland or the UK. Many other clubs face the same thing. It would probably be true to say that the majority of clubs in Scotland won’t be able to get any funding given the current circumstances. That’s the reality of the situation.
“I want to underline this: Without additional financial help, this club will not be able to continue. If people think the club generates enough cash from its own activities or from the economic activity that we undertake, then that is not true. The reality is that this cash is not enough.”
A sobering statement released by Hearts yesterday afternoon would have ensured the message hit home. “Without the support of fans there is, as we issue this note, a real risk that Heart of Midlothian Football Club could possibly play its last game next Saturday, 17 November against St Mirren,” it said.
Fedotovas offered a touch of solace by revealing that Hearts’ parent company, Ukio Bankas Investment Group, are willing to assist if necessary. The Lithuanian company have not funded the club since the turn of the year, although they continue to shoulder its £24m debt. First, it will be down to supporters to provide revenue by buying tickets and shares, selling out the stadium and donating in any way they can.
“We are working with UBIG and UBIG has said that they will look at all the options available to them to provide us with assistance,” continued Fedotovas. “They said the money is not available immediately, but it will take some time.
“We hope we will be able to find some solution and one of the possibilities may be UBIG. We are speaking to UBIG and they have a good understanding of what is going on. We have good co-operation with them and we are looking forward to bringing this problem to an end, hopefully in the short-term. We’ve got some reassurance from UBIG that they are looking to attend to this and do their best to provide us with help.”
Asked why almost £450,000 in income tax and national insurance payments were withheld, Fedotovas replied: “If you are asking why it’s not paid, it’s because the club is lacking funding. That is why.”
Administration rumours have lingered around Tynecastle for some time and have always been staunchly dismissed. For the first time, Fedotovas conceded it could be an option, although he stressed it is very much considered a last resort.
“I wouldn’t want to discuss that but it is always an option that is available. At this point I’m really concentrating on resolving this rather than what the other options are. Maybe I’m too optimistic, but somehow I think that, with the help of people who really care about this club, we can resolve this. I am here to try and deal with this situation.”
Hearts have been in dialogue with potential investors both in Scotland and abroad ever since their majority shareholder, Vladimir Romanov, indicated he wanted to sell his controlling interest.
No-one has tabled a bid to Romanov so far, but Fedotovas believes there are potential saviours lying in wait.
“We have had some promising contact and some good feedback from people who really understand the seriousness of the situation. Some really well-known people in Scotland are trying to help us out. That provides me with some comfort.”
Asked if those people would be willing to invest money, the Lithuanian said: “For the sake of everyone who wants to see this club doing well, I think supporters are the best investors here. I think that is the future for football because supporters are the ones who really care about their club. It is supporters who really need to be concerned with the life of their football club.”
There is no doubt Hearts fans are concerned, and it is safe to assume they will arrive at Tynecastle in their numbers on Saturday week to help out their club.
It must be hoped that, for football, for Edinburgh and for Scotland as a whole, their efforts are enough to preserve Heart of Midlothian FC.
Club statement to fans
Today the Board of Heart of Midlothian plc is writing to you with the express wish that every supporter provides
emergency backing for the club.
This is not so much a request as a necessity.
To use the words yesterday of John Robertson, one of the greatest players in this club’s history, this is a “Call to Arms”.
There is no greater need than now for supporters to invest in the club in whichever way you can, without delay. How can you do this?
1. Invest in the Share Issue! Take time to look at the Share Offer brochure and give some thought to what you might be able to afford to commit to the Offer. There are risks, we know, and these are laid out clearly so be very sure this is right for you before committing but please at least consider it.
2. Buy a ticket for you and a friend for the St Mirren game next weekend (Saturday 17th November KO 3pm)! We currently have 4,700 available seats for this game and we must fill the stadium for every game from now on to have any chance of avoiding future financial consequences.
3. Buy a ticket for you and a friend for the Celtic game on 28th November. It’s always a cracking atmosphere under the floodlights at Tynecastle and we will welcome the champions for what we expect to be a cracking game. Let’s fill the stadium and help the club continue to operate.
4. Buy a ticket for you and a friend for the Aberdeen game on 8th December. Aberdeen has already requested additional capacity as they vie for top spot in the Clydesdale Bank Premier League and this could squeeze availability for home fans. However, we want to look after our own fans and if demand from you is there, then we will make the Roseburn Stand available once again to Hearts fans.
Without the support of fans there is, as we issue this note, a real risk that Heart of Midlothian Football Club could possibly play its last game next Saturday, 17 November against St Mirren.
This isn’t a bluff, this isn’t scaremongering, this is
reality. Discussions on whose name is above the door, talk about how the money has been spent and debate on whether the investment in silverware has been appropriate is all natural but quite simply worthless at this moment in time.
The only valid debate now is how can you help the club.
Is the club worth less than £110?
This club has been supported for the last seven years by generous funding from the majority shareholding business Ukio Banko Investicine Grupe (UBIG) and we continue to seek the support of UBIG at this stage. However, no business is immune to the financial realities of the current global economy and for this reason the club’s reliance on its supporters is greater than at any point in the last seven years.
Our partners, our opponents, media, football bodies, many others - all are watching and judging how we will respond to the challenge. If we cannot demonstrate that we are united and we represent a force then there will be no due respect to the club from anyone around.
Without your help now, we could be entering the final days of the club’s existence. There are limited options for the Board of Directors to take to avoid the catastrophic consequences that a funding shortfall would mean for the club.
In a footballing sense alone Hearts will suffer an immediate 17-point penalty. This would just be the start of a painful process that will affect every one of us and could lead to far more damaging actions that threaten the very existence of the club.
The power is still in the hands of every Hearts supporter and for that reason we want to be as honest and transparent with you in the hope that you, too, believe that this club is worth saving.
Now please make every effort you can to take any or all of the four steps outlined above and help this great sporting institution survive.