Vladimir Romanov's ownership of Heart of Midlothian F.C.

Vladimir Romanov, a Russian born Lithuanian businessman, initially acquired 19.6% stake at Heart of Midlothian F.C. back in 2004-2005. After Romanov made financial guarantees his stake increased additionally by 29.9%. Romanov's takeover was welcomed by a fans representatives. Romanov eventually increased his majority share in Hearts to 82%.

Background and takeover

Hearts, like many other Scottish Premier League clubs, ran into severe financial difficulties during the early part of the 2000s. An assessment by PWC in the autumn of 2003 found that Hearts, along with four other SPL clubs, were technically insolvent. [ [http://news.bbc.co.uk/1/hi/scotland/3133218.stm SPL posts record losses] , BBC News, 23 September 2003. ] Dundee and Livingston subsequently went into administration, [ [http://news.bbc.co.uk/sport1/hi/football/teams/d/dundee/3228046.stm Dundee 'a one-off sideshow'] , BBC Sport, 21 November 2003. ] [ [http://news.bbc.co.uk/sport1/hi/football/teams/l/livingston/3449367.stm Livi in administration] , BBC Sport, 3 February 2004. ] while Hibs and Dunfermline both took drastic measures to balance their finances, cutting their player budgets severely [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/hibernian/3213825.stm Williamson to accept pay cut] , BBC Sport, 27 October 2003. ] [Grahame, Ewing. [http://www.telegraph.co.uk/sport/main.jhtml?xml=/sport/2004/02/10/sfndun10.xml Dunfermline players stall over pay cut] , "Daily Telegraph", February 9 2004. ] and selling assets. [ [http://www.hibs.co.uk/news/more.php?id=A53_0_1_0_M Hibernian Comment on Land Sale] , Hibernian F.C. official site. ] Hearts also cut their player budgetPhilip, Calum. [http://www.independent.co.uk/sport/football/scottish/dark-days-ahead-for-debtridden-scottish-clubs-569858.html Dark days ahead for debt-ridden Scottish clubs] , "The Independent", 13 February 2004. ] and, more significantly, proposed to sell Tynecastle to eradicate the club's debt. The fans protested against the latter course of action, [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/3658009.stm Levein welcomes delay] , BBC Sport, April 26 2004. ] forming a group called "Save Our Hearts". [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/3680321.stm Hearts stay at Tynecastle] , BBC Sport, May 3 2004. ]

Hearts made a deal with the Scottish Rugby Union to use Murrayfield Stadium in order that they could sell Tynecastle. Originally this was meant to happen during the summer of 2004, [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/3472727.stm Murrayfield share agreed] , BBC Sport, February 9 2004. ] but was then delayed for a season. During this period, Hearts were a public limited company. Ownership of the club was very fractured, with no individual shareholder owning more than 20% of the club. This meant that minority shareholders, including supporters' groups [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/3480919.stm Hearts consult on move] , BBC Sport, February 13 2004. ] and the McGrail brothers, [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/3382817.stm 'Save Tynecastle' plans revealed] , BBC Sport, January 9 2004. ] could realistically hope to acquire other minority stakes in order to block the proposals to sell Tynecastle. In August 2004, Hearts made a deal to sell Tynecastle to Cala Homes (a housing developer), but the deal had an escape clause which meant that Hearts could withdraw from the deal before January 31 2005 if a viable alternative could be found. [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/3579190.stm Hearts fans vent their fury] , BBC Sport, 13 September 2004. ]

Vladimir Romanov had shown interest in investing in Scottish football for some time because he wanted to see whether Lithuanian footballers could prosper abroad. [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/3614112.stm Hearts in takeover talks] , BBC Sport, August 31 2004. ] Scottish football clubs were particularly ripe for takeover due to their weak finances and corporate structures. [Conn, David. [http://www.guardian.co.uk/football/2005/nov/09/newsstory.hearts1 The problem at Hearts is the trouble with British football] , "The Guardian", November 9 2005. ] He made approaches to Dundee United, [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4396338.stm Who is Vladimir Romanov?] , BBC Sport, November 1 2005. ] Dundee and Dunfermline, but these were all rejected. He opened negotiations with the board of directors to invest in Hearts during August 2004. Romanov offered the prospect of the club staying at a redeveloped Tynecastle, [Campbell, Alan. [http://findarticles.com/p/articles/mi_qn4156/is_20041003/ai_n12592176 Romanov confirms he aims to stay at Tynecastle] , "Sunday Herald", October 3 2004. ] which was very attractive to Hearts supporters. [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4210675.stm Consortium aims to gazump Romanov] , BBC Sport, January 26 2005. ] Board chairman George Foulkes pleaded that the shareholders should not scare Romanov away by demanding too much for their shares. [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/3680526.stm Foulkes' plea for Hearts] , BBC Sport, September 22 2004. ]

Chief executive Chris Robinson, who had been the chief proponent of the necessity of selling Tynecastle, agreed at the end of September 2004 to sell his 19.6% stake to Romanov. [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/3696726.stm Robinson sells Hearts stake] , BBC Sport, September 30 2004. ] Romanov called an extraordinary general meeting in January 2005 so that the club could pass a motion to exercise the escape clause in the deal with Cala Homes. [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4152305.stm Hearts edge closer to home stay] , BBC Sport, January 7 2005. ] The backing of Leslie Deans and the McGrail brothers meant that the motion was passed with over 70% support. [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4161605.stm Hearts warn ground could still go] , BBC Sport, January 11 2005. ] The sale of Robinson's shares was completed on February 2 2005 [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4228629.stm Romanov takes control at Hearts] , BBC Sport, February 2 2005. ] after Romanov made financial guarantees that the club could continue to trade without selling Tynecastle. [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4218645.stm Hearts give takeover green light] , BBC Sport, January 29 2005. ] This sale increased Romanov's stake to 29.9%, giving him effective control of the club. Romanov's takeover was welcomed by a fans representative.

George Burley

Chris Robinson resigned as Hearts chief executive after selling his shares to Romanov.Ferguson, David and Halliday, Stephen. [http://news.scotsman.com/heartofmidlothianfc/Hearts-turn-to-Anderton.2604108.jp Hearts turn to Anderton] , "The Scotsman", February 18 2005. ] To replace him, Romanov hired Phil Anderton, who had just resigned from a similar position with the Scottish Rugby Union. Anderton appointed George Burley as Hearts manager during the 2005 close season. [ [http://www.rte.ie/sport/2005/0630/burley.html Hearts appoint Burley] , RTE, June 30 2005. ] During this period, Romanov started the practice of signing players through FBK Kaunas, including Edgaras Jankauskas [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4712485.stm Jankauskas completes Hearts move] , BBC Sport, July 25 2005. ] and Roman Bednář. [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4721539.stm Czech strikers join up at Hearts] , BBC Sport, July 27 2005. ] The club signed other high-profile players such as Takis Fyssas [ [http://www.cnn.com/2005/SPORT/08/09/scotland.hearts/ Hearts complete signing of Fyssas] , CNN, August 9 2005. ] and Rudi Skácel. [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4694147.stm Hearts complete capture of Skacel] , BBC Sport, July 19 2005. ]

With their new manager and signings, Hearts got off to a tremendous start in the 2005–06 season. The team won their first eight league matches, [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4278320.stm Happy Burley avoids talk of title] , BBC Sport, September 24 2005. ] equaling a club record set in 1914. Romanov increased his shareholding in Hearts to 55.5% on October 21 2005, and offered to buy the rest of the shares. [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4363098.stm Romanov aims for Hearts ownership] , BBC Sport, October 21 2005. ] Chairman George Foulkes sold his shares to Romanov and encouraged others to do likewise. Romanov eventually increased his majority share in Hearts to 82%. [ [http://www.eufootball.biz/Clubs/281206-Romanov-ownership-could-cost-him-millions.html Romanov's extra ownership could cost him millions] , euFootball.biz, 28 December 2006. ]

In a move that shocked Scottish football, Romanov sacked George Burley on the following day. Hearts fans were led to expect a "top class manager" [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4367202.stm Burley in shock exit from Hearts] , BBC Sport, October 22 2005. ] would replace Burley. Kevin Keegan, [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4378328.stm Hearts keen to talk with Keegan] , BBC Sport, October 30 2005. ] Bobby Robson, [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4368502.stm Hearts hope for talks with Robson] , BBC Sport, October 24 2005. ] Claudio Ranieri [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4392426.stm Ranieri explains Hearts decision] , BBC Sport, October 31 2005. ] and Ottmar Hitzfeld [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4406072.stm Hitzfeld says he rejected Hearts] , BBC Sport, November 4 2005. ] were all linked with the vacancy. Anderton, who had been making the approaches for these coaches, was sacked by Romanov on 31 October 2005. [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4394338.stm Hearts in turmoil as duo depart] , BBC Sport, October 31 2005. ] Foulkes, who had helped to bring Romanov to the club in the first place, [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4395230.stm Foulkes brands Romanov a dictator] , BBC Sport, November 1 2005. ] resigned in protest at Anderton's dismissal. Romanov replaced both of them with his son, Roman Romanov.

Rix and Ivanauskas

Romanov appointed Graham Rix as Hearts head coach on 8 November 2005 to replace George Burley. This appointment was not well received by the fans [Forsyth, Roddy. [http://www.telegraph.co.uk/sport/main.jhtml?xml=/sport/2005/11/08/sfnhea08.xml Rix given angry reception] , "Daily Telegraph", November 8 2005. ] [Kiddie, Paul. [http://sport.scotsman.com/heartofmidlothianfc/Mercer-slams-hypocrites-over-Rix.2676719.jp Mercer slams 'hypocrites' over Rix appointment] , "Edinburgh Evening News", November 9 2005. ] because Rix was a convicted sex offender [ [http://news.bbc.co.uk/1/hi/uk/282421.stm Football star admits sex charge] , BBC News, February 19 1999. ] who had not coached at a high level since a brief, unsuccessful spell at Portsmouth in 2002. Hearts' results deteriorated under Rix. [ [http://news.bbc.co.uk/sport1/hi/football/scot_prem/4534458.stm Rangers 1–0 Hearts] , BBC Sport, December 17 2005. ] It became apparent during February 2006 that Romanov was interfering in team selection. [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4690068.stm Players to wait for Romanov talks] , BBC Sport, February 9 2006. ] He agreed to meet a delegation of players to hear their grievances. As a result of these grievances, Andy Webster refused to extend his contract with the club, [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4691106.stm Webster stalls on contract talks] , BBC Sport, February 7 2006. ] for which he was dropped from the team. Romanov suspected Webster of wanting to move to Rangers. [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4944890.stm Webster on the way out at Hearts] , BBC Sport, April 26 2006. ] In the summer of 2006, Webster exercised his right under new legislation to buy out the remainder of his contract. He signed for Premier League club Wigan, before being loaned [http://news.bbc.co.uk/sport1/hi/football/teams/r/rangers/7443909.stm Webster completes Rangers switch] , BBC Sport, June 9 2008. ] and eventually sold to Rangers.

Rix was sacked by Romanov on March 22 2006, [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4832716.stm Rix sacked as Hearts head coach] , BBC Sport, March 22 2006. ] who replaced him with former FBK Kaunas coach Valdas Ivanauskas. [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/4834874.stm Ivanauskas promises few changes] , BBC Sport, March 22 2006. ] Despite the upheaval of two managerial changes, Hearts managed to finish second in the league, which meant that the club qualified for the qualifying rounds of the Champions League. It also marked the first time a club outside the Old Firm had finished in the top two positions since the 1994–95 season. Hearts also won the Scottish Cup by beating Gretna on penalties in the final. Following these achievements, Ivanauskas was appointed as head coach on a permanent basis in the summer of 2006. [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/5132394.stm Ivanauskas named new Hearts boss] , BBC Sport, June 30 2006. ]

Player unrest

Following a 2–0 home defeat by Kilmarnock in October 2006, Valdas Ivanauskas went on a leave of absence due to unspecified health reasons, [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/6075332.stm Ivanauskas to take two-week break] , BBC Sport, October 23 2006. ] and was replaced by Eduard Malofeyev on a caretaker basis. Romanov declared that he would put all his players up for sale to "whatever club would take them" if they did not win their next game, against Dunfermline. [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/6091336.stm Romanov issues player ultimatum] , BBC Sport, October 27 2006. ]

Captain Steven Pressley, flanked by fellow Scotland internationals Craig Gordon and Paul Hartley, announced to the media that there was "significant unrest" as a result of this continued upheaval. The Hearts fans showed that they backed the players in their dispute during the game against Dunfermline,McLean, Euan. [http://www.sundaymail.co.uk/sport-news/scottish-football/tm_headline=hearts-1-1-dunfermline&method=full&objectid=18008867&siteid=64736-name_page.html Hearts 1–1 Dunfermline] , Sunday Mail, 29 October 2006. ] which ended in a 1–1 draw. Pressley was then dropped from the team [http://edition.cnn.com/2006/SPORT/football/12/29/scotland.pressley/index.html Pressley completes Celtic transfer] , CNN, 29 December 2006. ] and was then given a free transfer. He signed for Celtic, where he was soon joined by Hartley. [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/6312529.stm Celtic complete Hartley capture] , BBC Sport, 31 January 2007. ] Gordon was sold to Sunderland in August 2007. [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/6932931.stm Gordon completes Sunderland move] , BBC Sport, August 8 2007. ]

2008 manager search

After a disastrous run of results during the 2007-08 season, [Anderson, Barry. [http://sport.scotsman.com/heartofmidlothianfc/-Fallen-Angel-back-as.4238672.jp Fallen Angel back as Hearts coach] , "Edinburgh Evening News", July 1 2008. ] Hearts issued a statement on January 1 2008 that said they would look to appoint a "British-style" manager in the near future. [http://www.fifa.com/worldfootball/clubfootball/news/newsid=818628.html?cid=rssfeed&att= Rober says no to Hearts job] , FIFA, June 29 2008. ] Romanov placed Stevie Frail in charge for the rest of the season, but Hearts disappointingly finished eighth in the league. Immediately after the end of the season, Hearts approached Motherwell for permission to speak to Mark McGhee with the intention of appointing him as their new manager.Saunders, Steven. [http://thescotsman.scotsman.com/heartofmidlothianfc/Hearts-fans-should-be-glad.4140466.jp Hearts fans should be glad of Romanov, says McGhee] , "The Scotsman", June 2 2008. ] McGhee appeared to be on the verge of accepting Romanov's offer, but he eventually decided to stay at Motherwell. Hearts subsequently made approaches to Jürgen Röber and Vladimír Weiss, who both also turned down the job. George Foulkes commented that Romanov was "reaping what he had sown". [Wright, Angus. [http://sport.scotsman.com/heartofmidlothianfc/Romanov-39reaping-what-he-has.4234383.jp Romanov 'reaping what he has sown' as Rober turns down post] , "The Scotsman", June 29 2008. ] Foulkes believes that Romanov has made the Hearts job unattractive to managers due to his record of interfering in team matters. [ [http://www.dailyrecord.co.uk/sport/football-news/scottish-football/2008/06/30/i-m-not-surprised-at-hearts-manager-snubs-says-george-foulkes-86908-20626249/ I'm not surprised at Hearts manager snubs, says George Foulkes] , "Daily Record", June 30 2008. ] Nonetheless, a head coach was eventually made on July 11 when Hungarian coach Csaba László was appointed to the position.

Finances

Romanov's management of Hearts' finances have become a source of concern.Gibbons, Glenn. [http://sport.scotsman.com/spl/Gretna-parallels-should-strike-most.3936678.jp Gretna parallels should strike most concern among followers of Hearts] , "The Scotsman", April 2 2008. ] Before he completed his takeover of the club, Romanov had pledged to eradicate the club's debt. Soon after the takeover was completed, the debt was transferred from HBOS and SMG to the financial institutions controlled by Romanov, Ūkio bankas and UBIG. Romanov permitted Hearts to greatly increase their spending on players, which explains why the club have signed experienced internationals like Takis Fyssas, Edgaras Jankauskas and Laryea Kingston.

Hearts' income has also grown during the last few years, but not by as much as their expenditure. The club was over £36M in debt at 31 July 2007, although Craig Gordon was sold for an initial fee of £7M days after that financial report was prepared. This, however, does not allow for the likelihood of further trading losses since the last accounting date.

Despite these losses and the consequent increase in debt, Romanov has pledged to construct a £51M new main stand at Tynecastle, which would increase its capacity to 23,000. [http://soccernet.espn.go.com/news/story?id=498868&campaign=rss&source=soccernet&&cc=5739 Hearts submit £51m Tynecastle plans] , ESPN, January 16 2008. ] Pedro Lopez, Hearts deputy chief executive, said that the proposals show Romanov's long term commitment to the club and that the increased capacity and revenue potential would allow them to reduce the debt in the long run. On July 7 2008, Hearts issued a statement that stated the club would issue debt for equity in order to reduce the debt by £12M. [ [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/7493075.stm Hearts plan to cut debt by £12m] , BBC Sport, July 7 2008. ]

Controversial comments

Romanov has been widely noted for causing controversies in football in Scotland. [ [http://www.news.com.au/perthnow/story/0,21598,21235549-23215,00.html Romanov denies Old Firm corruption] , www.news.com.au, February 16 2007. ] [ [http://www.metro.co.uk/sport/football/article.html?in_article_id=37491&in_page_id=43 Old Firm 'buy off' refs - Romanov] , Metro, February 15 2007. ] The first such controversy arose during the 2004-05 season when referee Hugh Dallas awarded a decisive penalty kick to Rangers in a Scottish Premier League match against Hearts. After the game, Hearts asked the SFA to investigate the "integrity of the decision". [http://edition.cnn.com/2005/SPORT/football/03/05/scotland.hearts/ Hearts ask FA for penalty inquiry] , CNN, March 5 2005. ]

Hearts were fined £10,000 by the SFA in October 2006 for bringing the game into disrepute. Romanov had said that "Last season, you didn't manage to protect the Scottish Cup and gave it to Hearts, despite all the referees' efforts and intrigues". [http://news.bbc.co.uk/sport1/hi/football/teams/h/heart_of_midlothian/6084480.stm Hearts fined for Romanov comments] , BBC Sport, 25 October 2006. ]

During February 2007 it was reported that Romanov had accused the Old Firm clubs of "buying off" [http://news.bbc.co.uk/solpda/ukfs_sport/hi/newsid_6364000/6364051.stm Romanov denies corruption claims] , BBC Sport, 15 February 2007. ] match officials and opposing players in the Scottish Premier League. The chairman of Celtic and the chief executive of Rangers both said they would seek legal advice if the comments were confirmed. Romanov then insisted that he had been misquoted.

ee Also

*Roman Romanov

References