Hibs reveal depth of Farmer's investment
THE full extent of what was claimed to be Sir Tom Farmer’s multi-million pound commitment to Hibs emerged today.
Ever since the former owner of Kwik-Fit rescued the club from receivership 12 years ago questions about just how much he has put into the Easter Road outfit have been asked.
This particular issue has been highlighted in the current debate over the controversial decision to investigate the advantages of sharing a stadium at Straiton with arch-rivals, Hearts, on around 40 acres of land in which Sir Tom has an interest.
While Hibs have stressed their first priority is to find a way in which to stay at Easter Road, they’ve embarked upon a detailed consultation process with supporters.
In a series of forums 400 fans were asked their opinion on the proposal, resulting in the setting up of a number of focus groups, the first of which met at the stadium last night, overseen by the head of the independent company appointed to conduct the process, Crystal Blue’s Colin McNeill.
The group, drawn from the Famous Five Stand Fans’ Forum, were given a detailed run-down of the club’s financial position in the last five years by managing director Rod Petrie.
As is well-known, Hibs have slipped 14.2 million into debt, with that accumulated loss expected to rise to almost 17m by the end of the current financial year in just two days.
However, a report set to be posted on the club’s official web-site today revealed questions from the floor included Sir Tom’s involvement with the club with, it was claimed, significant new facts given which clearly demonstrated his commitment.
In particular, it was said, the price paid by Sir Tom in 1991 equalled almost 3m, made up of 850,000 in shares, a loan of 240,000 for "funding of a player purchase" and 1.75m for the stadium and car park. This, it was said, countered "speculative claims" that he had paid only 300,000 for ownership of the club and related properties.
Since then, last night’s focus group was told, the full cost of developing the North (Famous Five) and South Stands amounted to around 8m, none of which was met by the club. The bill, they were told, was picked up by the property arm of the holding company, 90 per cent owned by Sir Tom with the remainder owned by Petrie.
At that time the club leased the stadium from the holding company for 125,000 a year. But in 1999 the board "persuaded" Sir Tom to sell it, plus an acre of the car park, to the club for 2.5m in cash, plus a further 3.5m in new shares in the club.
In effect, it was said, the club gained the ground with the new stands for "just" 2.5m cash. Since then, the group was told, Sir Tom had personally guaranteed a 4m mortgage with the Bank of Scotland to develop the new West Stand, and granted the club loans in excess of 3m to fund losses over the three years to July 31, 2002. Further loans have also been made in the current financial year when the drop in television revenues has had an adverse impact on revenues.
The debt, as of the end of the last financial year, was made up of 6.5m in Bank of Scotland mortgages, 1.8m bank overdraft, 4.1m owed to Sir Tom and the holding company and other bank loans and leases of 1.8m. Last night’s meeting was also told that in the past five years key factors incurring losses had been 2.7m in the season spent in Division One, the substantial increase in players’ wages thanks to Bosman and below-par footballing performances in season 2001/2002 under three separate managers, Alex McLeish, Franck Sauzee and Bobby Williamson.
The sale of Kenny Miller to Rangers reduced the loss in season 1999/2000 to just 200,000 and against that background, the fans were asked, said the web-site, to suggest ideas to help the board in their primary aim of staying at Easter Road. A number were put forward, including the issue of new shares; two-tier season tickets and two, three, four or five year season tickets.
McNeill described the forum as having been conducted in "an open and constructive manner," adding: "The first of the focus groups has gone very well, and again the supporters have shown their huge desire to work with the club to do whatever they can to stay at Easter Road. The financial overview helped a great many understand how the club’s debt has been arrived at, and we now look forward to equally positive meetings to come over the next few days."