Case for Vladimir Romanov’s defence aired 
by Fedotovas as share issue launched

Director Sergejus Fedotovas at Tynecastle to promote the sale of club shares
Director Sergejus Fedotovas at Tynecastle to promote the sale of club shares
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THEY’VE had to ask their fans for “emergency backing” and Sergejus Fedotovas peppered his action plan with the words risk, gamble and donation when he met the media at Tynecastle yesterday.

It doesn’t exactly inspire confidence.

The Hearts director, however, insisted today that “confident” is the most accurate way to describe how he feels about the club’s immediate future.

The Gorgie side’s supporters were hit by a bombshell on Wednesday afternoon when Hearts posted a statement on their official website warning that the home game against St Mirren could well be their last because of a gaping hole in their budget.

Her Majesty’s Revenue and Customs have lodged a winding-up petition for just short of £450,000 in unpaid taxes and Fedotovas has admitted that the club needs to raise around £2 million from their own supporters, just to see them survive until the end of the current SPL campaign.

Their latest shortfall also doesn’t take into account the £1.75m that HMRC also claims that Hearts owes them in tax for players who were loaned from Lithuania, an amount which is currently the subject of an appeal by the club.

Yet Fedotovas, having flown into Scotland on Thursday to deal with the fallout from this very public financial crisis, has been buoyed by the response that the club has had from its own supporters in taking up the shares issue and believes that they will be able to rectify the situation, in the short term at least.

It is difficult to share his optimism but Fedotovas said: “We need to stand firm and, without the help of fans, we won’t be able to reach a solution. We need their help.”

He continued: “We have had a really positive response from the fans and overall from people who are not fans, just people who are concerned. The numbers have picked up for the share issue and for tickets and that gives us a lot of optimism.

“If this continues we are positive that we will be able to resolve this situation and continue forward.

“Our share offer is until December 19, it’s open until then. This is our plan to generate the funds required to cover the capital shortfall.”

The reality is that the club are asking their fans to take a huge leap of faith, shell out at least £110 just weeks before Christmas and get no guarantees of anything back – not even that the club will still be here this time next year.

Fedotovas conceded that the share issue amounts to nothing more than asking their supporters for a charitable donation, but says that they will at least listen to the fans over how they believe the club should be run: “Pretty much. Pretty much it is, yes,” he said.

“I won’t be able to say that the fans are not getting a say.

We’re regularly meeting with the fans’ groups, listening to the fans’ groups and we are trying to take on board the important considerations on the agenda for supporters.”

The main questions on the lips of the very supporters who have bought almost 10,000 season tickets, watched just 12 league games of the current SPL campaign and seen their side take on Premiership side Liverpool home and away in the televised Europa League qualifiers will undoubtedly be, how did the club get themselves into this position in the first place?

At the moment, the only thing that is clear is that there is too much going out and not enough coming in but, far from conceding that Romanov has run this club into the ground and gambled with their 138-year history, Fedotovas instead insisted that Hearts are now in a better position than they were when he first took control seven years ago.

Back then there were claims that Romanov would bring league trophies and Champions League places to Tynecastle but now the main aim is survival.

Fedotovas added: “To make it simple, our budget this year provides for just around £6m of income and £8m of cost and that shows that there is £2m of difference. That is something that we want to address with the help of the share issue.

“Inside this gap are various things, various costs – wages, tax, other things.

“This £2m is the smallest funding gap that we have had over a number of years, maybe five, six or seven years.

“In certain years, if I remember correctly, the club had funding gaps of £10m or £12m, but that is in the past. The companies of Mr Romanov have cleared around £20m of debt from the balance sheet of the club. The wage bill has been reduced from £8m to around £4.5m or something like that and I think that we find ourselves in a position that this club was in before Mr Romanov’s investment – with the benefit that we are still playing at Tynecastle and that we are seven years away from the point that the club was going to have to leave Tynecastle and face an uncertain future.

“I think that, looking forward, we need to find a solution and, in the view of the management of the club, the best solution would be to invite supporters to join this drive and to secure the club’s longer-term future.”

Fedotovas says that Hearts have desperately been trying to make even more cuts to their outgoings but that they have been hampered by the current financial climate and falling valuations of players who previously would have commanded a decent transfer fee.

Players tied into lengthy contracts have delayed them being off-loaded, although Fedotovas insisted that everything had been done in a bid to move on as many as possible.

“The thing is, certain contracts are longer contracts and you cannot cut these contracts without consequences.

“Correct me if I am wrong, but we were selling players, it is not a supermarket. If you read something about Scottish football or football as a whole you will realise that transfer income has dropped and that is the reality.

“We have an absolutely different situation to three or four years ago.

“We cannot expect all of our players would attract transfer revenue. I think that we were quite prudent in our transfer dealings and we have achieved much, much higher returns than a lot of people were forecasting for our players.”

Even if Hearts do raise enough money to cover the winding-up order from HMRC, the £1.75m case provides the biggest threat. Losing that one would surely spell the end of Hearts as we know it.

Fedotovas knows it too, but he didn’t want to look too far ahead when questioned on what it would mean for the 
future of Hearts should they also have to stump up for that bill.

He said: “That’s a completely different thing.

“We plan to challenge it and that’s our plan for today. I don’t want to speak about this because it’s an absolutely different perspective. There is a risk and that has been disclosed in the brochure.

“If it goes against us, we’ll need to address it, need to fund it.”

Asked if that meant they would have to then go back to the supporters for yet more cash, Fedotovas would say only: “I can’t tell you at the moment.”

When questioned on whether Vladimir Romanov feels any guilt over the current plight of the Edinburgh club though, Fedotovas believes that the club owner should be PRAISED for keeping the team playing at Tynecastle and for prolonging the life of the club.

He continued: “I’ve already mentioned, if we take the history, he came in here and made the decisions required to keep Tynecastle.

“He made the decisions
 required to keep the club alive. That was seven years ago.

“Over those seven years, he’s invested a lot of money into the club. Wages have gone 
up, we’ve seen many great players, we’ve seen many great games.

“After that, we’re sitting today in a position where he has cancelled his debt – he has reduced this debt. We changed the situation with the budget. We’re nearly in the position where we don’t have players over the 
normal level of wages in 
Scotland. We still need to do some work but we’re nearly there.

“We’re back in a situation where, in today’s reality, we’re sitting here with two Cup wins, European runs, Tynecastle as the home of the club – and seven years have passed.

“We’re pretty much in the status quo. We’ve been able to prolong the life of the club.

“I believe we’re in a good position. With the supporters helping out, we will ensure that this club has a future for many more years.”

No matter how bleak the long-term outlook seems at the moment, Fedotovas insisted that the one things they would never do is sell off the ground to raise cash. “We’ve never thought about that, never considered it.

“There are a number of options that are open to us, as to any business, in trying to raise funds.

“If we have an understanding that we’ll be facing a negative solution, we need to address it.”