All eyes on Romanov as Hearts debt hits £34.8m

DEBT, like everything else, is relative. If the government of Greece, for example, owed no more than £34.78 million, the economic stability of Europe would not be under threat. On the other hand, if an individual of modest income owed such an amount, their life would be in turmoil.

Given that Hearts are neither a nation nor an individual, what are we to make of the fact that their debt, according to their financial figures for the year to 31 July 2009, now stands at that amount? What does a debt of 34.78m mean for a club of that size?

Understandably, one of the main points made by the club in their announcement of those results was the decrease in losses compared to the previous year – 8.6m compared to 11.2. In other words, without the savings made in that year, the debt would be higher still.

So the figures are moving in the right direction. Some high-earning players have already left Tynecastle, others will follow in the close season, and those further decreases in the wage bill could see the loss for the current year go down to around 5m.

From there, on an optimistic reading of the situation, the ability to break even would be in sight. Factor in the odd big-money transfer, and profits may just start coming in.

But for Hearts as a going concern, it is irrelevant whether they owe 24m, 34m or 44m. Even if they do start to chip away at their debt, there is no obvious method in which they can trade their way to profitability. Massive sums are on offer in the latter stages of European competition, but they are no closer to reaching those stages than they were when Vladimir Romanov became their majority shareholder in 2005.

Whatever amount the club owe, they remain reliant for their continued existence on Romanov and on Ubig, the investment group in which the Kaunas-based businessman has a controlling interest. The only real relevance of yesterday's figures lies in how Romanov and his colleagues react to them – or, more pertinently, in how they are able to deal with them.

Hearts can afford to remain unprofitable for as long as Romanov makes money from other sources and maintains his interest in having a mid-ranking Scottish football club. The minute Ubig decide to pull out, whether through loss of interest or lack of funds, Hearts are in serious trouble.

But that, of course, has been the position since Romanov bought out Chris Robinson. And that position, it should not be forgotten, is at least healthier than it was under Robinson, who had no parent company to provide multi-million-pound backing.

Hearts are still dependent on the continued largesse of Romanov, and prey to his caprice. So far at least, however, that largesse has continued, and that caprice has worked in their favour.

For whatever reason, Romanov still wants to be involved. And he retains the wherewithal to maintain that involvement. Five years on, he has stubbornly declined to fulfil the prophesies of doom and sell Tynecastle to a housing developer.

Indeed, plans to enhance the ground with a new main stand are still, officially at least, the policy of the present board. Funding may be hard to come by in the present economic conditions, but they want to increase the capacity of Tynecastle as part of a strategy to increase turnover.

Selling off the best young footballers who come through the academy is another part of that strategy, and players such as Lee Wallace and Eggert Jonsson have the potential to thrive at a higher level. But whether the fees earned for such players would make a significant impact on the debt is at best open to question.

Indeed, the directors' whole strategy looks more like one designed to placate Romanov than a plausible attempt to reach profitability in the medium term. Hearts are in slightly better financial health than they were, but it remains the case that if they were taken off that drip from Ubig, their condition would quickly become terminal.