By Andrew Warshaw
June 20 – In the same month that Scottish football agreed on a ground-breaking strategy to preserve the future of lower-league clubs, one of its most iconic, Heart of Midlothian, has ironically been forced to go into administration and has been docked 15 points for the start of the season.
Ever since Romanian businessman Vladimir Romanov took over in 2005, the Edinburgh club have been embroiled in controversy and instability and administrator Bryan Jackson has revealed the so-called Jam Tarts have “no funds at all to meet costs” with debts of about £25m.
“We need to cut costs as quickly as we can,” he said. “”I think there will be losses on the footballing side, although that has already been pared down quite a bit. The next week or two are really crucial because we don’t have any funds at all to pay any cost.”
“It’s as bad a situation as I’ve ever come across and it’s not helped by the timing. We are desperately looking at ways of bringing in some income. Unfortunately, probably the only real way of doing it is to make the usual plea to supporters. There is nowhere else to go really, apart from trying to sell players.”
Hearts fans raised close to £1m in a share issue last season as the club battled to find money owed to the tax authorities. The bulk of Hearts’ debt is owed to Ukio Bankas and UBIG, Lithuanian companies formerly owned by Romanov, who established a controlling interest in the club in 2005. His business empire has since collapsed, with Ukio Bankas also in the hands of administrators, while UBIG’s assets have been frozen.
“The biggest problem at the moment is cashflow and keeping the doors open,” said Jackson. “There are obviously potential buyers out there, whether they come good is out of our control. We will be meeting the interested parties as quickly as we can.”
Hearts are due to pay a six-figure sum to the Inland Revenue on Friday but have insufficient funds available.
The 2012 Scottish Cup winners, who finished 10th last season in the SPL, avoided a points deduction and possible relegation last month after the SPL decided the club’s financial problems had not breached its rules before the end of the season.
But falling into administration has triggered an automatic points penalty which seems bound to threaten their SPL status – provided they survive.
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