Hearts’ Spiralling Debt
I was browsing a website called euFootball.biz this morning and found a couple of articles about Hearts.
The first one is from February of last year and announces that the club would be asking shareholders to approve an increase in the board’s borrowing power, doubling the amount from £20 million to £40 million. Apparently, the club would not be increasing its debt by GBP 20 million but wanted to be able to pay for ground redevelopment, among other things, over the coming years.
The next one is from earlier this week, in advance of the publication of the club’s accounts for the year ending 31st July 2007 (five months after the motion to increase their borrowing power). It is anticipated that when the accounts are published they would include a record level of debt – £37 million.
In the meantime, they’ve sold Craig Gordon, but despite this I am extremely concerned for their future. With their debt accumulating at such a rate the’ll need to bring in a similar transfer fee every season just to stay where they are.
UPDATE (10th June): Looks like things could take a turn for the worst – HSBC Invoice Finance have petitioned the courts to wind up Heart of Midlothian PLC (you’ll need to scroll down a bit to see the reference to their petition) Scottish Courts website
It seems that hearts are on their way out. Of course, they will find their way back to the SPL eventually after some time in the wilderness as they have too many fans to do anything but.
With Hibs in the strong position they are now in, it’s likely that they’ll continue to own the Capital for the forseeable future.
They’re doomed!
How can any club particularly a Scottish provincial club come back from debt that big?
Lessons have to learned that clubs living beyond their means are stupid. Gretna just recently are an example but also the past administrations of Motherwell, Dundee and Livingston and of course umpteen clubs in England.
There is a very good article by St Johnstone’s chairman Geoff Brown running in this weeks Dundee Courier on how St Johnstone are run efficiently and are financially sound..
Ah yes, this one – well spotted Tam.
It can’t be long now until Hearts are found out.
Hearts are a big club in Scottish terms but they’re not bigger than Leeds, and look what happened to them.