March 2014 Dinner Meeting
The Chair welcomed our guest speaker Ian Murray to the Dinner which was attended by 180 members and guests. As well as being a Member of Parliament for Edinburgh South, Ian is a lifelong Hearts supporter and has attended many shareholders dinners in the past.
Ian had taken on the role of Chair of the Foundation of Hearts, the organisation set up to bring fan ownership to Hearts, in April 2013 and his opening remarks were full of praise for the work carried out by the Foundation and the support from the fans groups. He also emphasised the importance of this weekend with the meeting in Lithuania on Friday (27thMarch) when Ukio Bankas creditors will vote on transferring Hearts shares to Ann Budge’s BIDCO (subsequently delayed until 7th April). UBIG’s creditors are also due to meet for the same reason on 7th April. There is of course the small matter of a derby match on Sunday ( a wonderful day!!)
When questioned on how the press have treated Hearts this season Ian was full of praise for them and the way they have reported matters. In particular they have acted with a great deal of integrity especially in maintaining a lid on the release of Ann Budge’s name, keeping it out of the public eye until the right time.
A question was asked about the funds available to the management to strengthen the team for next season. This was difficult to answer as of course it will very much depend on revenue income. It is possible that with Hearts and Rangers being in the same competitive league a television deal can be struck with a number of Hearts games being televised subsequently bringing in extra revenue. Income from season tickets sales is as yet unknown. He emphasised the importance of tying up the younger players on longer contracts. What is certain is that Hearts will not go into debt to secure a better future.
Ian stated that although we are very close to a deal to transfer Hearts shareholding from Lithuania, things could still go wrong. The Lithuanians, as pointed out by administrator Brian Jackson at our January meeting, have been difficult to deal with. The meetings with the main creditors due in the next two weeks will hopefully make things clearer and result in Hearts being out of administration by the end of May.
When asked about the make-up of the Heart of Midlothian Board Ian advised that Ann Budge, as designate Executive Chair, will appoint the Board members. The Board will obviously be responsible for appointing all staff including the football manager and coaching team. Ian thinks that time will be taken to get the right team in place. He was full of praise for the way Garry Locke has conducted himself with honesty and integrity during a very difficult season. No one, he said, seems to know where the rumours about Craig Levein returning to Hearts emanated from and he has no idea if there is any truth in these rumours.
If all goes well and Ann ‘s BIDCO purchases the Club there will be a transition period of a minimum of three years and up to five years during which Ann will run the Club. During this time the funds raised by Foundation of Hearts will be used as working capital/building up a cash reserve to finance the Club and to repay Ann the £2.5 million that she has paid. Only when this has been completed will the Club be transferred over to the Foundation.
Ian confirmed a much asked question which concerns current shareholders in the Club - would their shares still be valid in the new structure. The answer of course is yes, current shareholders would still own shares in the Club following the transfer to BIDCO and subsequently to the Foundation of Hearts.
When asked if delays continued and the Club was not out of administration would Hearts be subject to a further points reduction going into next season, Ian replied that this was possible but there was a strong case to be put to the SPFL to appeal this in view of the fact that the delays were not the fault of Hearts.
One member was particularly concerned about the poor state of the Old Stand and the cost of replacing it. Ian responded that it was a concern but there was a few years in the Stand yet. Going forward he thought it possible that in years ahead, the fan’s contributions to the Foundation could be used to build a new Stand once the Club’s finances had been stabilised. He also mentioned that the pitch at Tynecastle had not been looked after as well as it should have been and investment would have to be made on the playing surface.
Some other points that came up during the Q and A were the attitude of Hibs supporters during our recent difficult times. Ian said that he had found most Hibs fans were supportive of Hearts returning to rude health. Some were enjoying our difficulties and a very small minority had written to the administrators in Lithuania and had been successful in causing problems for us there.
Interestingly he has found a number of his colleagues in Parliament showing interest in fan ownership and regularly asking about progress at Hearts. Indeed questions are being asked in Parliament about the rise in popularity of fan ownership and what the \Government can do to support it.
In conclusion, the Chair thanked Ian for giving us his time in a very busy schedule and giving very informative and honest answers to questions from the members present.
Ian was given a very warm and deserved hand of applause at the end of the session.
February 2014 Dinner Meeting
Following an excellent dinner the Chairman introduced our guest speakers for the evening, Ewan Murray, golf correspondent for the Guardian and Observer and Scottish football writer for these papers, Stuart Bathgate, chief sports writer for the Scotsman and Barry Anderson, who writes about all things Hearts for the Edinburgh Evening News.
A lively Q and A session followed and, perhaps surprisingly, the questions were not all about Hearts with a wide range of football topics raised.
When asked who was Hearts top player this season all three were unanimous in nominating Jamie Macdonald who as well as becoming a better shot stopper was also a good ambassador for the Club. Barry Anderson was of the opinion that his performances this season were deserving of a Scotland call up. The younger players have put in some good performances but as you would expect from youngsters, they have been a bit inconsistent. It was unfortunate for both Club and player that Jason Holt had been out with a long term injury.
The European National Championship was discussed and while it looked good on paper caution was urged albeit three teams from each group qualify and Ewan pointed out that even Hibs had beaten Gibraltar! There was wide agreement that the national team had progressed under Gordon Strachan.
When the subject of the current state of Scottish domestic football was raised it was agreed that an opportunity had been missed when the SPFL was formed. Clubs are basically only interested in themselves and historically have been mismanaged. They need to engage with supporters more otherwise crowds will decline even further than at present. It was noted that the last St Johnstone home game had an attendance of less than 2000.
On the question of supporters running clubs Barry Anderson commented that getting fans involved is the way forward. Ewan Murray stated that the Foundation of Hearts is putting in a power of work to secure the long term future of the Club and according to Stuart Bathgate the Club should be owned by the fans. Foundation of Hearts are doing right by the Club and Ann Budge will get Hearts back on an even keel. They all agreed that the media work by FOH had been excellent.
A question of referees and refereeing standards in Scotland raised a great deal of comment from the panel. The question of the appointment of ex referee Dougie MacDonald as Development Officer was raised. Given Mr MacDonald’s previous behaviour this appointment was viewed with disgust by the panel. Ewan Murray has a very dim view of Scottish referees and their lack of consistency in applying the rules of the game. In agreeing Barry Anderson highlighted a couple of bizarre decisions against Hearts this season - the disallowed goal against Dundee United at Tynecastle and the penalty awarded against Jamie Hamill at
Inverness when the ball actually hit him on the head! It was commented on that Howard Webb, England’s World Cup referee makes major mistakes in games. Stuart Bathgate fondly remembers years gone by when referees were actually looked up to and respected by players. He even admitted that as a youngster he would collect autographs of referees as well as players! Changed days!
Everyone agreed that the removal of Vladimir Romanov was good for Hearts. Access to the Club and players is now much easier .It was stated however that everyone should bear in mind that Romanov did save the Club at great financial loss to himself. Ewan Murray did say that the media criticism of Vladimir Romanov was unfair when compared to media coverage of David Murray’s time at Rangers. The panel agreed that the media could have been more forthcoming in the investigation of the club’s finances. However if they spoke out against Rangers they would cut ties and deny access with them.
There is still a view that the Old Firm will eventually leave Scottish Football most likely for England. The fan’s reaction will have to be taken into account and it would also create a headache and precedent for EUFA. It is possible that both Rangers and Celtic would ask to keep reserve teams playing in Scotland. It was also, stated that should the Old Firm leave Scotland the commercial appeal of televised Scottish matches would diminish.
The name of Jim Traynor strangely came up. The panel were one in believing that he would not be welcome back in the Scottish media world after his very personal criticism of Scottish football journalism. There was also much agreement that the treatment of certain people in talk back shows was unacceptable and the treatment of Billy Brown on Radio Scotland was disgraceful.
Following a most entertaining and thought provoking evening the Chairman thanked Stuart, Ewan and Barry for coming along on the night. The members present obviously agreed as they were given a hearty round of applause as they left the stage.
January 2014 Dinner Meeting
January AGM Dinner
Following the AGM business Bill introduced our guests for the evening, Bryan Jackson, BDO, Administrators of Heart of Midlothian plc and David Southern Managing Director at Hearts.
During our normal Q and A format Bryan and David were soon at the receiving end of plenty of questions.
With the Transfer Deadline on the verge of closing, Brian advised that due to Adam King departing to Swansea FC (there is a sell on clause in Adam’s contract) the Club was able to recruit Paul McCallum, a 20 year old striker from West Ham, on loan on the one in one out basis. Good reports on the player had been received from John Murray and Gary Locke. The news on Rudi Skacel was more disappointing. Hearts had hoped to replace Goalkeeper coach Alan Combe, who had agreed to relinquish his playing contract, with Rudi. This was turned down by the SPFL as Alan had never played or been on the bench for the first team. Bryan advised that he was disappointed but not surprised by the SPFL decision. Rudi could still return after we come out of administration. The Club are looking at other players to bring in as well when this is possible.
The question of the transfer of UBIG shares to BIDCO was raised next and Bryan was working on the solution to this issue daily, the main problem being the cultural and legislative differences in Lithuania. They were confident that it was going to be signed two weeks ago, but it could be signed within a few days. Following that agreement it will take 8-10 weeks for the completion of the sale and is subject to being ratified through the Lithuanian courts and/or creditors.
Bryan admitted that he is cautiously optimistic that the deal will go through (5/10 at the moment and 7/10 if the share transfer is agreed soon) but emphasised that there still hurdles to overcome. We have moved a long way from when the Administrators were appointed when there was £7000 in the bank and wages were one month in arrears. He advised that the wage cuts taken by some players had greatly helped the finances of the Club and were more than just a gesture.
A member asked why there was a delay in the salaries of David Southern and John Murray being cut. Bryan explained quick decisions had to be made. The players’ salaries were materially higher than other staff, who were being asked to take on extra responsibilities and their roles were equally critical in keeping the Club going. He was not comfortable in asking David and John to take pay cuts at the same time and it was his decision to ask them to do so recently.
Given the uncertainty of when the Club will come out of administration, the question was asked whether there was sufficient cash in the coffers now to get to that point. Bryan was not certain that there was but there is a number of options they could implement. One was to sell season tickets early or to go to the Foundation of Hearts to assist with any cash flow gap.
The situation re a new owner (BIDCO) and the connection with Foundation of Hearts (preferred bidder). The original strategy of FOH was to buy the Club from the Lithuanian administrators. It was clear that FOH would not have the funds to purchase the Club up front so a third party (BIDCO) will purchase the Club and run the Club until FOH has sufficient funds to pay back BIDCO. It is anticipated that this will take a minimum of three years.
Bill advised that FOH was making strong progress in getting their legal and financial structures in place, legal advisers (Dundas and Wilson) and financial advisers (Scott Moncrieff) had been appointed.
David Southern (who had been quiet for a long time) then gave a description on what it had been like at the Club since it went into administration. The day that 14 members of staff were made redundant was one of the saddest of his life. When asked if he would ever write a book about the Romanov regime he said it would have to go in the fiction section!! Changing the name of the Club and changing the team colours from maroon were just two of the craziest ideas!! He said that working with BDO compared with Romanov was like the difference between night and day.
A number of other topics were raised in what turned out to be an excellent Q and A session. Were Andrew Driver, Marius Zaliukas and John Sutton made redundant and therefore could have been replaced with other players? Yes was Bryan’s answer but it doesn’t work like that. Was this Bryan’s most difficult administration in the six he had done? They all have different problems, he said, but the most difficult thing about this one was dealing with the Lithuanians. How important is the League Cup financially? It is a great help but the income was not budgeted for.
In thanking our two guests for coming along this evening, Bill said we could not have two more appropriate people at this time and that their honesty and openness in answering some excellent questions from the membership present had made for a fantastic evening.