HEARTS have reduced their wage bill by more than £3 million over the last 12 months, with annual salary costs as low as £1.5m ahead of next season. Only 26 players are on the club’s books following a cull of high earners which has cut wages to their lowest level since the Chris Robinson era.
Reinforcements are needed urgently and Hearts are eager to replenish their squad ahead of the new campaign. The 26 registered players at present includes all professionals within the first team and youth academy. The wage bill of around £5m for season 2012/13 has been slashed dramatically and operating costs are now lower than when Vladimir Romanov took control in 2005.
Darren Barr, Danny Grainger, Mehdi Taouil, Gordon Smith, Arvydas Novikovas, Fraser Mullen and Denis Prychynenko were all released at the end of the season, with the futures of Marius Zaliukas and Andy Webster still unclear. David Templeton and Ryan McGowan departed during the campaign, while Andy Driver was loaned to Houston, which leaves Hearts’ wage bill at less than a third of what it was a year ago.
The Edinburgh club’s salary-to-turnover ratio fell below 100 per cent for the first time under Romanov in the annual accounts for the year to June 30, 2012. A further drop during the 12 months since then sees Hearts heading towards a target of 65 per cent wages to turnover.
The cuts are vital to make the club more attractive to buyers. Foundation of Hearts and a Scandinavian consortium want to gain control, with an unnamed American group also interested. However, Hearts’ financial state remains perilous due to combined debt of £25m and a predicted funding shortfall of around £2m over the next 12 months.
Income generated by this year’s season ticket sales since they were launched in March has already been consumed through interest payments on debt, tax bill repayments and wages. The club has little other income during June and July before the new Scottish Premier League campaign starts, although the first payment from TV revenue is due from the SPL in August. Hearts could suffer a 15-point deduction ahead of the new season if parent company Ukio Bankas Investment Group (UBIG) is declared insolvent. Tynecastle officials will argue they are surviving without financial aid from UBIG but the SPL will have the final say on whether the club should be punished for any “insolvency event”.
Meanwhile, Hearts claim to have paid the majority of their £100,000 PAYE tax bill to Her Majesty’s Revenue and Customs. With part of the amount still outstanding, HMRC will now proceed with its petition for a winding-up order at
Edinburgh’s Court of Session. The club is expected to pay the full amount before the matter reaches court, however.