Writer: Specs Haver
Date:Sunday November 4 2012
Forget the League Cup win at Tannadice and the timid defeat at Dundee. The most pressing subject for all Hearts fans has to be the continuing late payment of wages and the club`s chosen solution - the Share Offer to fans and investors.
We have until 19th December to consider how to respond. It will be fairly obvious to all fans that the arrangement being offered is very much an urgent cry for help to see the club meet its wage obligations through to the end of the season - UBIG are proposing to forego the proceeds from the sale of 16 million of their shares to the public, so that the football club can continue to operate.
Decision 1 = do you believe them ?
UBIG are suggesting that further Share Offers might occur if this one is successful. This would allow fans and/or investor groups to build up significant shareholdings - although the share price and destination of proceeds from future Offers could well be different. In other words, UBIG could see this as a means of realising a return from their investment in Hearts cash - but anyone buying these shares needs to be aware that their percentage holding will fall each time UBIG undertake a debt-for-equity swap.
Decision 2 = If you knew that the proceeds of a Share Offer were
going straight into the UBIG coffers - with no benefit to Hearts - would you still buy shares ?
For me, the biggest argument against buying shares is the dishonesty/incompetence of the current regime (I still can't make up my mind which of these 2 behaviours is most in evidence).
Despite reducing the wage bill ....and receiving fees for Jonsson, Wallace and Templeton ... and benefitting from a Cup win and a Euro match against Liverpool…. the regime claims that the financial situation is now very serious - yet in the brochure they are still talking about the development of a stadium 'befitting of a top European club'. Has Vladimir lost so much interest in football that he hasn`t noticed that we're not actually a top European club, and never will be ? Heaven knows how much time and money was been spent on consultants and professional fees so far.
Some statements in the brochure verge on the absurd. 'Many of Europe's top young players select the Hearts Football Academy as the base for their development'. Well, we'd love that to be true... but even many English Premier League clubs would be exaggerating if they made such a claim.
The brochure also has this bizarre quote - 'The proportion of monies raised, after costs, will be spread across these 2 areas (working capital and Academy) dependent on the clubs requirements at the time'. Is this a Babelfish translation from Russian ? It doesn't make sense.....what proportion is being referred to ?
The brochure says that the Board expects to report another profit for the year to June 2012, largely due to player sales (Jonsson, Wallace and Stevenson are the only ones I can think of, unless extra fees were triggered from the likes of Berra or Gordon). It will be interesting to see the Accounts when they come out. Sergejus Fedotovas pointed out that the Cup winning team cost £8m to run - an astonishing figure if true. Is he claiming that a 20-man squad costs £8m ? If so, thats an average salary of £ 400k each !!
Who sanctioned salaries of that magnitude when turnover is only £7m ? Silly question... we know the answer to that !!
Add to that the feeble comments and excuses (or silence) of the directors each time staff wages have been late - never mind the unnecessary season ticket "dynamic pricing" experiment which resulted in reduced attendances despite the Cup Win - and the regime continues to be associated with incompetence and/or dishonesty in my opinion.
Decision 3 = do you trust the Board to stop wasting money on un-deserved long contracts, consultants and self-inflicted fines ?
Having said all that, can we really sit on our hands and just pray that "someone else" comes along and bails the club out while we do nothing ? UBIG are now challenging supporters to show that they love Hearts enough to make them worth saving. After 100k people turned out to cheer the team through the streets of Edinburgh with the Cup, the number of season ticket sales fell to around 8,500 - so UBIG are entitled to wonder if their investment has much purpose against a falling income stream.
An irony about all this is that if another 4,000 fans had purchased a season ticket in July (at around £400 each), this would have generated the proceeds now being sought by the Share Offer - with no need for brochures or financial regulation fees. Even purchasing tickets and donating them to friends, schools or boys` clubs would have amounted to a worthwhile donation.
So the final question which every Hearts supporter must answer is ….
Decision 4 = will you subscribe as much as you can (within your own personal circumstances) to help Hearts, knowing that it may or may not be enough to save the club from insolvency, by purchasing a half season ticket and/or some shares ?
Date:Sunday November 4 2012
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