Hearts risk losing top stars with wage cut gambit

Players and staff asked to take 50% drop in salary

Hearts chief executive Ann Budge. Picture: SNS

Hearts may be about to lose some key players, with the entire squad weighing up their options following the club’s decision to implement a 50 per cent wage reduction for all full-time members of staff, including manager Daniel Stendel.

The extreme decision was taken by owner Ann Budge in an attempt to guide the relegation-threatened Tynecastle outfit through the financial uncertainty caused by coronavirus and was conveyed to shocked employees yesterday.

Budge offered caveats, stating that no-one would be allowed to slip below the minimum wage and adding that anyone who felt “unable or unwilling to accept this revision to their contracts, will, of course, be offered the option of contract termination”.

That may lead to the club slashing the sizeable squad but it could also free the way for highly sought-after stars, such as Aaron Hickey, to leave without a bumper payday for Hearts, provided those other options remain alive in the current climate.

Fears had been growing that a number of Scottish clubs would find themselves struggling to survive the current open-ended footballing hiatus, but there has been surprise that the Gorgie club is the first to take such severe measures and, with no end in sight to the lull in matchday action, there are now major concerns that others will follow suit.

It is not the first time wages have caused unrest at the capital side, with Budge’s predecessor Vladimir Romanov failing to make payments as Hearts fell into administration.

But Budge is keen to avoid the redundancies and financial instability which followed then and believes that drastic measures are called for now.

It is understood that a number of players have been in touch with the players’ union and, while some of their contracts are due to expire in three months, others are on longer-term deals and are unhappy that the terms of those contracts are set to be changed.

“We have been contacted by our members at Hearts,” said Fraser Wishart, chief executive of PFA Scotland. “It would be inappropriate to comment further until we have spoken to them in more detail and spoken with the club.”

It is believed that they are anxious to open dialogue with the Hearts board as soon as possible but the general feeling of players and their representatives is that their contracts are protected and that any change would rely on their goodwill.

That amenability has been tested by yesterday’s shock announcement, with staff angry at the lack of consultation and worried by the severity of the cuts.

But in a statement, Budge, who days earlier revealed that the season shutdown had cost the club in the region of £1m in lost footballing revenue, has given assurances that “these decisions have not been taken lightly”.

“If I was not absolutely convinced that this is necessary for the future sustainability of our business, I would not be asking our employees to face these cuts. Never has it been more important that we stand together as colleagues, and I’d like to thank the staff for their understanding. Similarly, we would ask our fans and our FOH pledgers to continue to support us in any way they can, during this very difficult time.

“I thank you all and give you my personal assurance that I will do everything in my power to try to guide us safely through the next few months.”

The fear that the shutdown could stretch beyond the end of the current season and into next is a major factor in the decision, with the Budge claiming that “we are living through unprecedented and challenging times at the moment”, claiming that the impact of lost matchday revenue streams had been exacerbated by the call for greater social distancing, and the blow that has struck to non-matchday earning opportunities, due to the closure of the bars and the cancellation of events.

“As you will appreciate my priority is the health and well-being of our people and in addition to this, as Chairman and CEO of the Club, I must also do everything in my power to ensure that we keep our Club safe and financially sound.

“The Scottish FA has now suspended football for the foreseeable future and, whilst there is no specified end date to this, it is most likely that the game will not resume until July/early August at the earliest. In addition, the latest Government measures regarding social distancing and restrictions on large gatherings, mean that the impacts of this will be felt across our entire business.

“This reduction in income is not sustainable without taking immediate action to cut staff costs and overheads. As such, I need to act swiftly and take steps now to ensure that we, as a Club, can weather this storm while trying to ensure we are ready to resume operations as and when we move into calmer waters and football restarts. I cannot achieve this without the full cooperation and support of all of our key stakeholders, namely staff, coaches, players and supporters. I cannot stress strongly enough that we need everyone to get behind the Club to help us through this.

“In order to try to prevent a staff redundancy programme and to protect as many jobs as possible, I am proposing to implement a Club-wide salary reduction programme.

“We have asked all full-time employees, managers, coaches, players and player back-room staff, with effect from the beginning of April, to accept a 50% cut in their monthly salary, with the following caveats: No-one’s full-time salary will fall below the Living Wage. In other words, if the 50% reduction would take anyone’s salary below this threshold, the full-time salary will be set at £18,135.

“Given the uncertainty of the whole situation with which we have been presented, we cannot say how long these measures will be in place. We will, of course, be continuously reviewing the situation.

“Staff and players alike, who feel unable or unwilling to accept this revision to their contracts, will, of course, be offered the option of contract termination.”