Andrew Smith: The price to be paid for Hearts

HEALTH scares are the recognised catalysts for ending risky behaviours.

Picture: SNS
Picture: SNS

There is nothing more sobering than receiving a sign that your way of life could be a death sentence. Hearts have ignored such warnings for almost five years now. September 2008 was the first time that players’ wages were not paid on time.

The fiscal irresponsibility of those in Lithuania who run the club is utterly exposed by the fact that, in the four sets of accounts published between then and now, the wage bill at the Tynecastle side was reduced by a paltry £1.1 million.

Hearts have been a financial basket case for close on a decade and really, until this season, there has been no serious attempt to seek treatment or take the necessary medicine. Each one of the Vladimir Romanov seasons, the wages-to-turnover ratio has sat at more than 100 per cent – almost double what financial analysts agree is a level that allows for running a football club in sustainable fashion.

It may be that, come 1 July, Hearts’ wage bill will be closer to the £4.5m Romanov inherited when he assumed full control of the club in late 2005. Too little, too late. That £4.5m wage bill was achieved through unpopular cost-cutting in the era of Chris Robinson. He made hard decisions and in the process reduced the wages-to-turnover ratio to 54 per cent, when four years before it had approached 90 per cent. They knew they had put themselves in a pickle with lavish wages, and in recognising the error of their ways attempted to embark on the proper economic path.


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That process should have been repeated in 2008. Instead, the spending continued. It was good fun while Romanov ramped up the wages and had the capacity to pay them. He trippled the wage bill he inherited in 2005 inside three years – the £12.5m peak coming when turnover had stuck at £10.3m – but post-financial-crash it became unsustainable to the point of being utter madness.

Yet, the craziest figure was still ahead. Having reduced the wages by 12 per cent between 2009-10 and 2010-11 in scaling them back to £8m from £9.1m, it is astonishing that one year later, 2011-12, they were back up to £9.4m. If this sort of reckless decision-making is typical of the Romanov empire, it is no wonder his banking and investment business has gone belly up.

Hearts will say they required to balance cutting costs with an ability to sell season tickets but it was more arrogance and conceit that appeared to underpin a ruinous business strategy. They refused to listen; refused to change course; always thought they knew better. It is extraordinary that in 2009-10 and 2010-11 they posted trading losses of £5m and £6m.

In effect, the precise sums by which they were overspending on wages. No-one with any clout inside the club was willing, or able, to join the dots, and now, when they finally have, the only picture that forms is a horribly bleak one.