Ann Budge, Hearts’ majority shareholder, admits returning to the Premiership at the first attempt would trigger significant financial dividends after revealing how being out of the top flight costs the club £1 million per season.
The importance of gaining promotion back to the highest tier, whether it be through a title success or the play-offs, was underlined at the club’s 108th Annual General Meeting yesterday.
Operations director Eric Hogg gave a presentation on the club’s cash projections for the current year. It is estimated that turnover for the period will be £5.1m, a drop from £6.5m for the previous 12 months, a spell when Hearts were in administration.
Hogg, however, pointed out that being detached from the Premiership was the main factor in their expected reduction in revenue streams.
Hearts are on course to return to the Premiership with Robbie Neilson’s side currently nine points clear of Rangers at the Championship summit.
Budge admits the financial disparity between the two divisions adds to the urgency when it comes to regaining their top-flight status.
She said: “What’s the biggest challenge facing Hearts? If I didn’t say getting promoted I would probably get slated for it.
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“I would have to say at the forefront of everybody’s mind is trying to ensure we do get promoted next year. It’s a minimum £1m drop in revenue for being out of the Premiership, depending on where you finish. It’s a big hole to fill and we do really need to get there.”
Budge noted, however, that she was not getting carried away with their current league position. She added: “I would certainly like to think we can get there this season but there is still half a season to go so there are no guarantees.”
During the Vladimir Romanov era, shareholders were often not given adequate responses to their queries at AGMs.
From the very beginning, Budge, who will hand over her shareholding to fans’ group the Foundation of Hearts within five years, stressed that the club would attempt to be as transparent as possible.
Conducted in a relaxed atmosphere, minute details of the club’s expenditure and cash projections were revealed.
Hogg elaborated on how the club’s football costs in comparison to the estimated turnover for the current financial year stood at 37 per cent. It was noted at one point during the meeting that during the Romanov era, the wage bill, at times, almost matched the turnover figures.
The importance of the continued financial support from the Foundation, who handed over an immediate £1m cash injection during the summer and will give the club £1.4m in each of the next two years, was also highlighted.
Without that input, Hearts would be looking at posting a loss of around £900,000 for the year ending June 2015. Budge admitted she inherited a club in a financial mess when Hearts finally emerged from administration. She explained: “We had estimates of liabilities when we came in and I think in every case they were underestimates. We said we could cope with a £1m injection to cover costs and football debt. In fact all these costs totalled £1.38m. We had a few financial challenges in the early days but the supporters were magnificent and that meant we were able to ride that particular storm.”
Making sure the club can stand on its own two feet remains Budge’s priority off the field following a turbulent period. But beyond that, she admitted there were plans to explore their long-term future at Tynecastle. Both a renovation of the current ground and moving to a new stadium will be considered.
Budge added: “The investigative stuff with the stadium is kicking off in earnest early next year. It will depend on what we find whether we may or may not move. It’s at the forefront of our mind in terms of something we have to plan for but I can’t give you a date, I just don’t know at the moment.”
It was also revealed at the AGM that a life-size bronze statue is to be erected at the stadium to commemorate the Hearts players that fought in McCrae’s Battalion during the First World War.
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