Fan ownership becomes reality next spring when chairwoman Ann Budge transfers her 75.1 per cent shareholding to Foundation of Hearts – the fan-led organisation who will then become the club’s guardians on behalf of the paying public.
Funds exceeding £8.2million have been injected into Hearts via FoH thanks to fans’ monthly contributions, which began in 2013. That figure will reach £9.55m by the time Budge relinquishes control next year. It remains a staggering story and one of the enduring positives within Scottish football.
The Foundation are also repaying £2.5m of Budge’s money used to get the Edinburgh club out of administration in 2014. That loan from her BIDCO 1874 Limited company matures 12 months from now, triggering the handover thousands of supporters have waited for since Hearts’ financial collapse six years ago.
In an exclusive two-part interview with the Evening News, Foundation of Hearts chairman Stuart Wallace explained how the transfer of ownership will work and the technicalities of it.
It has always been stressed that Hearts will be fan-owned but not fan-run. That means there is little prospect of random supporters jumping from Section N to the boardroom to make key decisions. The main point of it all is to ensure the public retain authority of the club they support.
In short, never again will a dubious owner take charge at Tynecastle Park unless supporters give their blessing.
“We are repaying the BIDCO 1874 loan at the moment,” said Wallace. “Approximately one year from now, we expect that loan will be extinguished. Then we can execute the deal to transfer the majority shareholding to Foundation of Hearts.”
Transferring ownership during the football season, particularly at a time when Hearts could be challenging for Europe and/or a cup final, might not be the most sensible move. FoH and Budge are already fully aware that they must get the timing of their exchange correct.
“The debate we are having is when exactly to do it,” continued Wallace. “Do we do it in May next year to ensure it’s outside the football season and therefore not a distraction? There will be an official handover and a celebration so we’re just deciding when exactly it will happen. It is a big moment off the pitch, if not a particularly big moment on the pitch.”
In fact, it is a seismic moment for all concerned. And not only the suits upstairs. Hearts captain Christophe Berra and striker Steven Naismith are two of a number of first-team players who pledge money to the Foundation each month. Club ambassador Gary Locke is a pledger, as are Budge and her boardroom executives. They and around 8,000 other subscribers have donated £3m which helped to build Tynecastle’s new main stand, with other monies contributing to day-to-day operating costs.
It all puts Hearts on a sound financial footing for the future. Wallace and fellow FoH director Donald Cumming sit on the club board alongside Budge and director of football/manager Craig Levein to ensure a crossover between all parties when it comes to budgets, signings, infrastructure and everything else.
The legal process to give Hearts to the fans in 2020 should therefore be very straightforward. Paperwork will be signed off and passed over as Budge sticks to her promise to give 75.1 per cent control to fans.
That is intended to be the only real change. The board, as it stands, will not be replaced as FoH want a seamless transition and continuity thereafter.
“That’s certainly the intention. We’re going into this with the view that it will be continue to be business as usual,” said Wallace. “There is a legal change of ownership to Foundation of Hearts on behalf of the supporters.
“We would love Ann to stay on for as long as she wants to. We certainly all want that period of stability after the handover where everything remains business as usual. There will be a legal exchange of 75.1 per cent of the shares into the hands of the Foundation. Otherwise, things will stay very much as they are.”
FoH’s reputation for financial prudence appeals in an era of wanton waste in football. Small print in the agreement between BIDCO 1874 and the Foundation states that FoH can spend £50,000 a year on their own running costs. Except Wallace and his colleagues are reluctant to spend a penny in reality. It also states a minimum of 95 per cent of the funds FoH collect must be deposited in Hearts’ bank account. There is very little left over. If it’s a hard-earned £10 pledge, the Foundation board believe they should be equally strict in how they use that pledge.
“We can’t ring-fence the money we hand over, nor should we,” explained Wallace.
“We just want to do things which are going to engage the supporters. In our Foundation board meetings, we are debating what we should do that delivers the best return on the investment for the club and the supporters. That will continue into the future because there is an inevitability that this will carry on.”
Most Hearts fans wouldn’t have it any other way.