BDO’s Trevor Birch today insisted it was back to ‘business as normal’ at Hearts – but warned that the administration process at the club could still take until the turn of the year to complete.
Exactly a fortnight after taking control of Hearts, Birch met with the media at Tynecastle to give supporters an update on the progress that has been made at their crisis-hit club.
While urging caution and insisting there was still hard work ahead, Birch revealed there is now real hope that the club can be run as a sustainable business in the future.
Fourteen office staff – nine full-time, five part-time – have lost their jobs, while a number of first-team players accepted wage cuts and others – including former skipper Marius Zaliukas – were made redundant as they approached the final weeks of their contracts.
The savings made as a result of those measures, Birch hopes, will be enough to secure the long-term future of the club although he stressed that there is still a lengthy process still ahead of them.
“What we are trying to say is that it is business as normal now,” he said. “There has been a huge amount of work here in paring down the squad, we are down to 17 players for the first-team squad, four of whom are over 21. Therefore there is very little need for us to do any further paring down than the work we have already done with two or three of the older players in terms of pay cuts.
“In that respect it has been straightforward and the cash which has been generated now gives us the opportunity to sit down with the interested parties and gets us through to August when the SPL will deliver the first tranche of their money.
“That, with a fair wind, could take us through to Christmas.”
And he added: “The cost base for the club is now commensurate with the revenues that the club can generate. It is sustainable and therefore it gives me hope that there is a proper business to sell.
“We don’t want to raise expectations too much. The Hearts fans won’t want to be in administration for a longer period of time than necessary and I don’t want to be up here for another six months, so it is in my interests to get this done as quickly as possible. We have got to be realistic though, these sales don’t happen quickly.”
The eventual sale of the club will not be an easy process given that UBIG, who along with sister company Ukio Bankas, own 79 per cent of Hearts shares and are owed £10million by the Gorgie side, claim they are insolvent, while Ukio Bankas, who are owed £15m, are in administration.
That means there is no one person for BDO to communicate with when it comes to the transfer of the shares they hold in Hearts. Birch believes there are three or four serious bidders around the table but reckons the process of taking over the club could be drawn out.
He suggested that, in the worst-case scenario, Hearts could just be emerging from administration in time for the January transfer window but is hoping that it will prove to be a much quicker process.
That, however, all depends on matters in Lithuania being resolved over the course of the next few weeks. And Birch admitted: “I would like to think that we would be out of administration by the window in January, but you just can’t call it.
“It may be quicker. If the administrator is appointed over there quickly then they might say ‘there is absolutely no value, go and sell the shares’ and the interested party is in a position to move quickly, then it could all happen sooner than we think.
“The earliest it could happen is three months because of the process of the administration of the CVA.
“At best guess, it is going to be three or four months and then you build in the difficulties in trying to deliver the shares.
“The problem is that, unlike in England, where you can set up a newco and buy the assets of a company that has gone into administration and then the football league transfer the membership to the newco, you don’t then need to deal with the owner, it bypasses the owner.
“But here you have to keep the same company and therefore you have to be able to deliver the shares, so you are going to UBIG and saying ‘will you sell the shares’ but at the moment there is nobody to speak for UBIG because they are in an insolvency process but they don’t yet have an administrator.
“Until the administrators are appointed, we can’t do anything and, according to the lawyer acting for our administrators over there, that could be the end of July or even August before they are appointed.
“That is the real wrinkle in the process for us right now because it should be straightforward.”
While Birch stressed that the future of the club is far from guaranteed, he believes that money raised by the fans, combined with their cut of money from the SPL at the beginning of the campaign, could see them through to the end of the year.
And Birch again praised the supporters who dug deep once again to buy season tickets or organise fundraisers to help their stricken club.
Around 2800 extra season tickets have been snapped up by supporters over the past fortnight after a plea from the administrators and Birch continued: “The money that has been raised is being used to assist the day-to-day running of the club and gives us that cushion.
“What we are trying to build-up to is extending that timescale to give us the breathing space to sell the club.
“The response from the fans has been right up there with the response of the Portsmouth fans who were well known for the way that they backed their club.
“They were a great community club and they were very loyal. The fans here have been brilliant, although in some way I wouldn’t have expected anything less from them because of everything that I have heard about them.
“They have also responded well to the share issue and various other things before we came in.
“We thought that we could get to 10,000, given the history of season ticket sales at the club in the past.
“But, for people to come forward, with no real certainty that you are going to come through the season, is just fantastic.
“For them to dig deep again just shows you how important this club is to the community.”
And although there does now seem to be some light at the end of the tunnel for Hearts and their supporters, he urged them to continue trying to raise more money for the club.
“They just need to carry on doing what they are doing. There is no special plea now, we just need them to continue to buy season tickets where they can and individual match tickets.
“Whether it is that or corporate hospitality, as long as they are supporting the club, that is all that we can ask of them.
“I think maybe some fans shied away from the club when they had Lithuanian owners but we need all of them to come back now and support the club.
“I think that the more we can show the outside world that we are operating normally, then the greater the chances of us actually selling the club.”
There was also good news for first-team manager Gary Locke who, just this week, insisted that he doesn’t want any more players to leave.
Last week’s initial cull saw the likes of Zaliukas and Andrew Driver made redundant, while Andy Webster’s contract was not renewed after it was finished. Other senior pros like Jamie MacDonald, Jamie Hammill and Ryan Stevenson all accepted wage cuts to stay at the club. And Birch is sure that the squad currently on the books at Tynecastle will not be reduced any further than it already has been.
“The pledge we made was that, if we could get 3000 season tickets sold, then that would prevent us from having to sell more players.
“To give the side the best chance of staying in the Premier League next season, we have to keep the squad intact.”
Of course, Danny Wilson will play a key role for Hearts next season after signing a two-year deal with Hearts and being named their captain for the coming season.
Some questioned the wisdom of their decision to sign him on a permanent contract when others around him were losing their jobs, but Birch insisted that the opportunity to re-sign the player was too good to miss.
Hearts are currently under a transfer embargo after failing to pay their players last month but were able to sign Wilson because he was already registered with them as a result of his loan spell from Liverpool last season.
Birch stressed: “When the opportunity to bring Danny Wilson arose, why wouldn’t you do that?
“When you are an administrator, you have got to try and do the best thing for the club.
“It was an opportunity, he was already registered as a player and therefore it was just a case of extending that deal.
“We lost John Sutton and it was a deal that worked for us.”