Gretna parallels should strike most concern among followers of Hearts

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PUTTING all your eggs in one basket is a cautionary proverb that seems not to translate into Lithuanian. If there is concern among Hearts supporters over the financial returns released by the club at the weekend – and, more specifically, over the accompanying warning of potential disaster from the firm who carried out the audit – it surely springs from recognition of the parallels between Tynecastle and Gretna.

Vladimir Romanov, the major shareholder and effective owner of Hearts, may control a parent company whose assets – last reported at around 440 million – exceed the personal wealth of Gretna's former patron, Brooks Mileson, but the principle of high dependency on a single source for economic viability, or even survival, still applies.

If there is a difference, it is that, while Mileson was a benefactor, aware from the start that his support of a now obsolescent football club would be an exercise in diminishing returns, Romanov is a self-declared profiteer, a businessman to whom the prospect of losing money is anathema.

The accountants might just as well have put a black border round a report to shareholders which confirmed that Hearts' debt at the end of the last financial year stood at 36.25 million and that, even more scarily, they had contrived losses of almost 12.5m, a figure one-and-a-quarter times their annual turnover of around 10m.

To put those last figures into perspective, it is the equivalent of Celtic – last reported turnover close to 80m – declaring a loss of almost 100m in a single year. It is hardly surprising that the auditors should reach the conclusion that Hearts, as an entity, cannot possibly sustain trading which also includes the revelation that the wage bill (almost 12.5m) comes to 125 per cent of turnover. The ratio recommended by financial analysts is an ideal of 50 per cent or less, and a maximum of 60 per cent.

These figures, as of July last year, do not include the 8m Hearts have received from Sunderland for the transfer of goalkeeper Craig Gordon or the 2m they expect when striker Roman Bednar's loan to West Bromwich Albion is made permanent at the end of the season. But the argument that this revenue will immediately reduce the debt by 10m does not allow for certain losses, and the possibility of accruing more debt, during the current year.

It has been a poor season on the field for Hearts, spending much of the time in the lower half of the Premier League, but, much more significantly, accruing no income from European football, having failed to qualify.

None of the seemingly harrowing aspects of the latest returns appears to be causing the slightest unease, far less panic, among Romanov and his aides at Tynecastle. Indeed, any reference to the financial condition of the club tends to be answered with the assurance that schemes are planned that will make Hearts the economic wonder of the age.

For supporters, however, the disconcerting feature of the optimism is that it is predicated on notional projections, none of which are entirely convincing. These include the re-construction of the main stand at a proposed cost of 51m, which will not only increase the stadium capacity to 23,000, but will incorporate high-earning facilities such as a hotel, offices, and corporate suites.

The unsoundest source of revenue regularly forwarded by the Tynecastle hierarchy is European football. Not only is this one the great uncertainties as an annual event, but, on those occasions when they have qualified, Hearts have not stayed long enough to generate significant returns.

There is talk, too, of a share issue next year which will all but wipe out the debt at a stroke. The new stock will not be offered to small shareholders, but will be taken up by the parent company, Ubig. Whether or not this transpires, the impression will be left of the financial 'black hole' to which colleague Stuart Bathgate referred on these pages yesterday exercising an ever-stronger gravitational pull.

To the layman, it seems that Hearts, year on year, become less saleable in the event of Romanov suddenly being overcome with the urge to leave. It is impossible to conceive of a buyer willing to assume the liabilities of a company unable to trade its way out of difficulties. Unless, of course, the Lithuanian decided to take a hit and sell for a feasible price.

Some may argue that the stadium itself is a 20m-plus asset, but to realise this in the cause of keeping the club alive would be to take the route recommended – and roundly condemned – by the former chairman, Chris Robinson. It would also, in all probability, be the kind of existence normally associated with a victim of irreparable brain damage.

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