SPL Heart Of Midlothian FC Faces 'Drastic' Cost-Cutting Measures
Scottish Premier League club Heart of Midlothian FC Dir Sergejus Fedotovas described slow sale of shares in the team as "an alarm," according to Paul Forsyth of the SCOTSMAN. Fedotovas continued that "all previous efforts to raise revenue had been exhausted, and that the only other option in a difficult economic climate would be 'dramatic' cuts." Hearts’ financial predicament "could be exacerbated by a tax demand for £1.75M ($2.8M), which may have major consequences for the future of the club." The case, which Hearts reveal in their share issue brochure, "will go to a tax tribunal next month, where the Scottish Cup winners have vowed to 'robustly defend' their stance against" U.K. tax authority HMRC. The share offer "allows fans to own up to 10% of the club." Fedotovas "admitted that the scheme was first and foremost a cry for financial help." He said, "We are doing this as a solution to the financial challenges that are facing the club and are affecting all clubs in Scotland. If you want to maintain a squad that is capable of playing in Europe then the budget should be according to that." Fedotovas added: "For more than a year, we have extensively cut costs across the board, whether that was the playing squad, administration, facilities. We cannot live like this all the time." Prospective shareholders "are being asked to invest a minimum of £110 ($177)" by the club’s Dec. 19 deadline. Fedotovas said that, "if fully subscribed, the £0.11 ($0.17) shares would raise around £1.7M ($2.7M)" (SCOTSMAN, 10/28). In Glasgow, Darren Johnstone reported that since Owner Vladimir Romanov "bought the club in '05, an estimated 19 players have featured for Hearts as part of a loan agreement" with Lithuanian club Kanuas. Hearts captain Marius Zaliukas "was initially on a temporary deal before making his stay permanent, while former players such as Bruno Aguiar and Marian Kello also moved to Edinburgh as part of loan agreements." Privately, Hearts "are keen to play down any comparison with the benefit trust scheme at Rangers, which is still being probed by the SPL" (HERALD SCOTLAND, 10/27).