Hearts in crisis

At least the players haven't given up yet.

There wasn't a lot of sexy football coming from the Jam Tarts in Inverness on Saturday (to be fair, the home side were hardly strutting around the pitch either).  Simple short passes went astray, first touches were poor, and there seemed to be no strategy beyond punting high balls into the box.  There wasn't much creativity or flair on show; Callum Paterson, the current great hope for the future, was pretty inconspicuous.  Andrew Driver, who used to be the great hope, had a torrid, blundering cameo as a substitute where even managing to get the ball out from between his feet appeared beyond him.

But the players did show guts; if they weren't going to manage to play decent football, then they were damned if they would let Caley Thistle do so.  They managed to bludgeon their way to a draw, albeit with the aid of a very dubious injury time penalty, but it was a draw that they deserved.

On the pitch, this is hardly a vintage Hearts side, and they don't look like they will challenge for honours any time soon, but they aren't a catastrophe either.  The catastrophe, of course, is taking place off the pitch.

Just as I started writing this blog, it was announced that the Tynecastle club have managed to do a deal with the taxman, so that they can pay their outstanding £450,000 tax bill in two instalments, the second of which is due on December 3, less than three weeks for now.  But is it the breathing space required to get their affairs in order, or just a stay of execution?

The big surprise, frankly, is that it has taken so long for push to come to shove.  Vladimir Romanov's (almost) eight year ownership of the club has been marked almost from the beginning by overt financial mismanagement - just think of how mediocre Senegalese defender Ibrahim Tall was paid £8,000 a week, or the £800,000 transfer fee spent on winger Mirsad Beslija.  "Mirsad who?" I hear you ask.  Well, I rest my case.

At the beginning it seemed like the Lithuanian and his UBIG investment group (and his bank, UKIO Bankas) had money to burn, and that Romanov wouldn't tire of throwing cash at the club.  But eight years is a long time.  Once a regular at home matches, 'Mad Vlad' has appeared only sporadically in Gorgie more recently.  Some say it's because he has a new mistress, a Lithuanian basketball team, which is getting all his affection and dough.  But, given that the national bank of Lithuania recently raised concerns about UKIO Bankas, and that an aluminum factory owned by Romanov in Bosnia was unable to pay its one thousand employees last month, might it be that the money has simply run out?

As for Hearts, it's a year since they first admitted to difficulties paying wages - just remember the ignominous story of how midfielder Ian Black got himself a part-time job as a painter-decorator in order to make up the shortfall in the run-up to Christmas.  I've lost count of the number of times wages have been paid late in the last twelve months; the SPL finally lost patience and hit the club with a transfer embargo a few weeks ago.  It's unclear when manager John McGlynn last received his payslip; his lack of complaint may be partly due to his love of the club (he was, after all, a coach at the club for a decade until 2006), but may partly motivated by an awareness that results on the pitch have left his position vulnerable and any signs of rocking the boat could lead to his dismissal.  I also note that players have again had to defer wages in order that the current tax bill is met.

The big alarm bell regarding the current tax bill is that it is for overdue PAYE and VAT - which of course is supposed to come straight out of wages and go straight to the taxman.  As Rangers did last year, Hearts seem to have deliberately hoarded this money, presumably because of a cashflow problem.  For them to need to do this suggests they are in what I believe accountants call 'a proper Help Ma Boab situation.'  As if this doesn't induce enough panic, the club also announced an upcoming share issue which aims to earn £2 million - which is entirely to pay for running costs and outstanding bills.  It has been implied that, without this money, the club will not manage to complete the current season.  The words 'Black' and 'Hole' come to mind.  So do 'Emotional' and 'Blackmail'.

Fans of other clubs have been generally sympathetic to Hearts' plight.  They have not been met by the same derision and disgust that Rangers and their supporters faced when their problems came out into the open earlier this year.  This may be because the sums involved are considerably smaller, or it may be because Hearts fans have generally showed humility regarding the situation, whereas the Rangers support responded to criticism with V-signs and shouts of "You can't punish us, because We Are The People!".  It may also be because those of us who support other Diddy Teams lie awake at night worrying that it could be our club next.

But our clubs (Rangers excepted, of course) haven't been run into the ground by the reckless spending of a megalomaniac owner, who now won't/can't (delete as applicable) pay the bills.

It is clear that the future of Hearts will not be secure until Romanov and his minions are no longer involved with the club.  Even if they manage to scrounge the cash to keep the taxman at bay for a little longer, I don't believe enough supporters will be naive enough to invest in worthless shares to raise anywhere near the cash required to get to May 2013 in one piece.  That said, I don't believe liquidation is likely either; it is unlikely the tax man (even if it turns out he is also due £1.75million from the wages of previous loan players, which Hearts are currently fighting) would be able to derail a CVA.  But administration seems very possible.  I'm not surprised that there are several businessman with maroon loyalties who are apparently willing to join together to buy Romanov out - Edinburgh is a big place, with more than a few wealthy people - but takeovers take time; Romanov's own takeover of Hearts took six months.  And administration would mean an eighteen point penalty, and probably relegation.

Having thought about it a lot, I've come to this conclusion; I have no sympathy for Hearts FC.  That's not to say I don't have plenty for their fans; the last eight years have been a wild ride for them, with plenty of highs (such as two Scottish Cup wins) but plenty of lows as well.  And despite often having resources which outstripped every other non-Old Firm club, they never displayed the sheer arrogance, or contempt for fans of smaller clubs, that Rangers and Celtic supporters are so famous for.  But as a taxpayer, I don't think football clubs should be allowed to avoid tax bills, or to agree to pay players salaries that they can't afford.  So Hearts FC should be made to pay what they are due, and if they can't do that, then they should be dealt with accordingly.

But, most refreshingly, a lot of Hearts fans feel exactly the same way, and would take any points deduction or punishment on the chin.  That's why I would happily buy any one of them a pint in the pub.  But I wouldn't chuck a five pound note in a collecting bucket to pay the club's tax bill.  As I said above, 'Black' and 'Hole'.

L.