James Traynor - The £500k question: Why did Hearts KO Ranger?

[ian1964 10,721]

WITH the Tynecastle club teetering on the precipice, it seems strange they felt they were in a position to bargain with Rangers who offered them £500,000.

 

 

 

HEARTS are in a dark place. Their situation is perilous and their manager, John McGlynn, fears that Saturdayâ??s draw in Inverness could have been the clubâ??s last match.

 

He worries if the £450,000 needed to satisfy HMRC for the time being isnâ??t paid by Saturday the tax man might wind Hearts up before the St Mirren game.

 

The position is he stressed â??drasticâ? and Vladimir Romanovâ??s man on the Tynecastle board, Sergejus Fedotovas, sanctioned a statement which warned: â??This isnâ??t a bluff, this isnâ??t scaremongering. This is reality.â?

 

Of course, rather bizarrely he also said Scottish football is like a frog in boiling water but most caught his drift. The game appears powerless to leap in any direction never mind the correct one.

 

But while there are other clubs close to the same precipice on which Hearts now stand swaying and desperate â?? St Johnstone chairman Steve Brown said on radio he suspected other clubs were in trouble â?? there are still many who believe the game is thriving. Dolts.

 

Dunfermline are in serious financial bother and have 11 days to raise £81,000 to deal with two tax bills and this clubâ??s chairman John Yorkston believes radical league reconstruction is the only way out of trouble for most clubs.

 

Unfortunately by the time our moribund administrators get around to doing something about the gameâ??s structure clubs could be dead and buried or suffering insolvency traumas.

 

Hearts are one of several on the brink yet Romanov was able to reject Rangersâ?? offer to pay £500,000 of the money due for Lee Wallace, who went to Ibrox for £1.5million in July 2011.

 

Rangers owe £800,000 and are supposed to be paying £300,000 of that amount next month with the balance (500k) due next year.

 

Rangers chief executive Charles Green was quick to make the offer thinking he could also save his own club £300,000 but Hearts rejected the offer by text on Saturday morning.

 

You could say Green was being opportunistic but heâ??s a businessman and insists he did want to help Hearts and his own club. But we shouldnâ??t be taxing ourselves trying to work out why he made the offer.

 

The real issue is why Hearts rejected it.

 

If they are sliding towards insolvency or even closure why would they dismiss the chance to pay off the tax man and then concentrate on selling the shares?

 

Surely, if the need for money is as desperate as Hearts say theyâ??d have grabbed Rangersâ?? offer. Or it just the case that Romanov doesnâ??t trust Hearts fans to keep buying tickets and shares if they knew the immediate tax bill had been covered?

 

He must be pretty certain Hearts will survive to get their money in full from Rangers and if thatâ??s the case why has he had Fedotovas ringing the alarm bell?

 

Every day in the business world, owners of good companies suffering cash-flow problems because the banks wonâ??t lend them our money, which was given by the Government to save the banks in the first place, have to accept cash from entrepreneurs in return for disproportionate chunks of shares.

 

A friend of mine has had to do exactly that recently and no longer controls his company but it

was the only way to keep going through this recession.

 

Hearts, however, prefer to take even more from their fans instead.

 

Thatâ??s fine provided the support can afford to give enough to cover the tax bill which threatens them with closure and also buy into the share issue.

 

Hearts hope to raise almost £2m, claiming thatâ??s the amount required to get them to the end of the season, but their fans might want to ask why Romanov didnâ??t want to take £500,000 right now.

 

His man Fedotovas didnâ??t even enter into any kind of negotiation which might have secured a better deal. Green might have been willing to cover Heartsâ?? tax bill right now and pay £100,000, perhaps even £200,000 next year, but there was no attempt to barter. The rejection was terse and final.

 

You could understand that attitude from a club with a healthy balance sheet but we are talking about a club crying out for help.

 

Someone close to Tynecastle actually said the offer was rejected simply because it came from Rangers and if that is the case people are just not thinking straight in that Gorgie bunker.

 

But then an awful lot of club directors and their fans havenâ??t been applying robust logic to Rangers for some time.

 

Theyâ??ve allowed their delight at this clubâ??s plight to cloud judgment, always hiding behind that wafer- thin curtain of â??sporting integrityâ?.

 

And now that Rangers are dragging themselves back to their feet there are still many who refuse to give credit to them or the fans who continue to have come out in massive numbers to ensure their clubâ??s survival.

 

Although they insist Rangers are dead, killed by liquidation, these people continue to shout that the club owe more than £90m in tax, conveniently forgetting the final verdict on the EBT case has still to be announced.

 

It also suits their agenda to link all debts run up by the previous regime to the club in the Third Division. Yet the same folk are determined to make sure Rangers arenâ??t linked with all of the league titles won in the past.

 

Incidentally, the SPL independent commission set up to rule on allegations Rangers used a dual-contract system, wonâ??t be able to complete their work for months.

 

The SPLâ??s main lawyer Rod McKenzie, of Harper MacLeod, is recovering from injuries sustained in a serious car crash and the case canâ??t be closed until he is back on his feet.

 

That could be some time but we wish him a full recovery and also Hearts whose fans, it must be said, have reacted fantastically well to their clubâ??s problems.

[Tannochsidebear 2,405]

Thats an excellant piece by Traynor. Not his biggest fan but he is spot on with this, as he has been with most of the Rangers stories the last few months.

[Davie P 4]

''And now that Rangers are dragging themselves back to their feet there are still many who refuse to give credit to them or the fans who continue to have come out in massive numbers to ensure their clubâ??s survival.

 

Although they insist Rangers are dead, killed by liquidation, these people continue to shout that the club owe more than £90m in tax, conveniently forgetting the final verdict on the EBT case has still to be announced.

 

It also suits their agenda to link all debts run up by the previous regime to the club in the Third Division. Yet the same folk are determined to make sure Rangers arenâ??t linked with all of the league titles won in the past."

 

Comments are spot on!

 

I haven't been a fan in the past, but he has been fairly even handed in his reporting of late.

[26th of foot 6,082]

Of course, Stuart Cosgrove, Jim Spence, Rheinhart Gordon, Des McKeown, ............................................. et al say the above is a figment of Jim's feverished imagination. I note Cosgrove pulled out of Traynor's 'Your Call' on Saturday evening. Although he took time on Saturday afternoon's On the Ball and Sunday morning's Off the Ball to articulate his new position. Wait for it!

 

Stuart Cosgrove is anti-debt and promulgating this stance has led many to perceive him as anti-Rangers.

 

Over the two shows, he spouted this pysh on several occasions. Here's me thinking that Stuart's anti-Rangers credentials emanate from 40 years of, eh .... sheer hatred of the club and support.

 

Big Rheinhart was at pains to emphasise Hearts principled stand on the payment offer and congratulated them on letting it be known that it was the club making the offer that led to refusal. I suspect Traynor must be actively watching his back at the wonderfully objective BBC Radio Scotland.

[Scott7 6,002]

"

Big Rheinhart was at pains to emphasise Hearts principled stand on the payment offer and congratulated them on letting it be known that it was the club making the offer that led to refusal."

 

Hearts said that and RG congratulated them? That's it, then. Doon wi' the Hertz an' doon wi' Gordon.

[GovanAllan 0]

"

Big Rheinhart was at pains to emphasise Hearts principled stand on the payment offer and congratulated them on letting it be known that it was the club making the offer that led to refusal."

 

Hearts said that and RG congratulated them? That's it, then. Doon wi' the Hertz an' doon wi' Gordon.

 

If ever a statement in the last 6 months has proved this whole lynch mob has about their hatred for us and nothing else its that one by RG.

 

Utterly scandalous they won't be happy until Scottish Football is no more, but it will be ok because they will still have their hatred to keep them warm on a Saturday.

[stewarty 2,025]

Compare and contrast with Michael Grant's piece in today's Herald:

 

Romanov's rebuff to Rangers shows Hearts are not at death's door yet

 

Michael Grant

Chief football writer

 

HEARTS supporters have been in the confusing position of finding comfort in something that infuriated them.

 

Michael Grant on Monday

 

There was plenty of outrage and resentment around when they learned that Rangers had offered to pay £500,000 of the money owed for signing Lee Wallace and David Templeton.

 

On one hand, the move might have been embraced as a generous offer which would instantly stave off the threat of Hearts being wound-up by Her Majesty's Revenue & Customs over an unpaid £450,000 bill on Thursday.

 

Hearts took it another way: Rangers in general and chief executive Charles Green in particular were being callous chancers, cynically trying to get out of the full amount they owed for the two players – £800,000 – by making a take-it-or-leave-it offer to a desperate club in no position to refuse.

 

Every penny is a prisoner for Hearts these days and here they were being asked to kiss goodbye to £300,000. Rangers will argue there was generosity of spirit in the offer and that it was a show of solidarity from one stricken club to another. Hearts saw it as cold and opportunistic, an attempt by Rangers to save some dough by capitalising on their vulnerability.

 

Suspicion over Rangers' motives resulted in Hearts letting off some steam at the weekend but the episode did serve another purpose. When a man is drowning he doesn't turn down the chance of a lifebelt because it's not big enough. Why would Vladimir Romanov refuse a £500,000 handout from Rangers if the alternative was Hearts immediately going out of business?

 

Maybe the refusal surprised Rangers. Maybe Green thought their years of grotesque mismanagement had painted Hearts into a corner to such an extent they were in no position to look a gift horse in the mouth.

 

Instead, by telling them to get lost Romanov showed that his club is not at death's door quite yet. Either he is prepared to stump up the money himself to see them over the line this week, or else he's banking on supporters raising enough to get close to the £450,000 and he'll make up any shortfall. Either of those options would remove the most immediate threat from Hearts, HMRC's winding-up order, and allow them to continue playing in the short-to-medium term.

 

Even if Romanov felt Rangers's motives were objectionable, there would be no sense in him rejecting their money only for Hearts to be liquidated and the £24m owed to him to be flushed down the pan. Clearly, he thinks they can pay off the £450,000 and still hold Rangers accountable for the full £800,000 they owe. The alternative, saying no to Rangers without a Plan B, would amount to utter madness, even by his well-established standards.

 

A combination of the fans' money and any shortfall being met by Romanov would amount to an emergency bail out. It would do nothing to address the chronic underlying issues Hearts have to address. There is a shortfall between income and expenditure which is touching £2m and must be met before the end of the season. If the share issue raises £1.7m will that go towards this shortfall, or will it be used for the separate (and disputed) £1.7m tax bill also hanging over the place? What if the full £3.7m has to be found?

 

When the team runs out in Gorgie on Saturday the supporters will turn out in real force and provide a reminder that not only Celtic and Rangers fans can make big, impressive gestures. The game against St Mirren will be played in front of a packed, emotional Tynecastle and it promises to be quite a celebration of Hearts.

 

Romanov will not have the nerve to show face. He's been neither seen nor heard now that supporters are having to perform their resuscitation act.

 

Many fans clung to a loyalty towards Romanov for sparing the club from a £20m debt and the probable sale of Tynecastle seven years ago. Now their fear is combined with a sense of betrayal.

 

Romanov, with his maroon scarf and anti-Glasgow rhetoric, presented himself as the uber-Jambo. Instead, the club is on a life support machine because of him, likely to survive the coming days and weeks thanks to the real supporters yet locked into financial commitments which cannot be met and a potentially ruinous disregard for paying taxes. They are heading for unequivocal confirmation of Romanov's failure: administration.

 

The benefits of Scotland's trip to Luxembourg tomorrow may not be immediately apparent to those unmoved by a November friendly against UEFA plankton, but it can serve a purpose for some useful work off the park. SFA board members on the trip should prepare to busy themselves speaking to the squad's senior players.

 

The SFA's cack-handed handling of Craig Levein's dismissal will have irritated many of those players, who liked Levein even while repeatedly letting him down. The SFA has nothing to apologise to them for, but some explanations would be welcome if one of the few successes of the Levein era – the return of a disciplined, focused and committed mentality throughout the squad – is to be preserved for his successor.

 

Hearts took it another way: Rangers in general and chief executive Charles Green in particular were being callous chancers, cynically trying to get out of the full amount they owed for the two players – £800,000 – by making a take-it-or-leave-it offer to a desperate club in no position to refuse.

 

Every penny is a prisoner for Hearts these days and here they were being asked to kiss goodbye to £300,000. Rangers will argue there was generosity of spirit in the offer and that it was a show of solidarity from one stricken club to another. Hearts saw it as cold and opportunistic, an attempt by Rangers to save some dough by capitalising on their vulnerability.

 

Suspicion over Rangers' motives resulted in Hearts letting off some steam at the weekend but the episode did serve another purpose. When a man is drowning he doesn't turn down the chance of a lifebelt because it's not big enough. Why would Vladimir Romanov refuse a £500,000 handout from Rangers if the alternative was Hearts immediately going out of business?

 

Maybe the refusal surprised Rangers. Maybe Green thought their years of grotesque mismanagement had painted Hearts into a corner to such an extent they were in no position to look a gift horse in the mouth.

 

Instead, by telling them to get lost Romanov showed that his club is not at death's door quite yet. Either he is prepared to stump up the money himself to see them over the line this week, or else he's banking on supporters raising enough to get close to the £450,000 and he'll make up any shortfall. Either of those options would remove the most immediate threat from Hearts, HMRC's winding-up order, and allow them to continue playing in the short-to-medium term.

 

Even if Romanov felt Rangers's motives were objectionable, there would be no sense in him rejecting their money only for Hearts to be liquidated and the £24m owed to him to be flushed down the pan. Clearly, he thinks they can pay off the £450,000 and still hold Rangers accountable for the full £800,000 they owe. The alternative, saying no to Rangers without a Plan B, would amount to utter madness, even by his well-established standards.

 

A combination of the fans' money and any shortfall being met by Romanov would amount to an emergency bail out. It would do nothing to address the chronic underlying issues Hearts have to address. There is a shortfall between income and expenditure which is touching £2m and must be met before the end of the season. If the share issue raises £1.7m will that go towards this shortfall, or will it be used for the separate (and disputed) £1.7m tax bill also hanging over the place? What if the full £3.7m has to be found?

 

When the team runs out in Gorgie on Saturday the supporters will turn out in real force and provide a reminder that not only Celtic and Rangers fans can make big, impressive gestures. The game against St Mirren will be played in front of a packed, emotional Tynecastle and it promises to be quite a celebration of Hearts.

 

Romanov will not have the nerve to show face. He's been neither seen nor heard now that supporters are having to perform their resuscitation act.

 

Many fans clung to a loyalty towards Romanov for sparing the club from a £20m debt and the probable sale of Tynecastle seven years ago. Now their fear is combined with a sense of betrayal.

 

Romanov, with his maroon scarf and anti-Glasgow rhetoric, presented himself as the uber-Jambo. Instead, the club is on a life support machine because of him, likely to survive the coming days and weeks thanks to the real supporters yet locked into financial commitments which cannot be met and a potentially ruinous disregard for paying taxes. They are heading for unequivocal confirmation of Romanov's failure: administration.

 

The benefits of Scotland's trip to Luxembourg tomorrow may not be immediately apparent to those unmoved by a November friendly against UEFA plankton, but it can serve a purpose for some useful work off the park. SFA board members on the trip should prepare to busy themselves speaking to the squad's senior players.

 

The SFA's cack-handed handling of Craig Levein's dismissal will have irritated many of those players, who liked Levein even while repeatedly letting him down. The SFA has nothing to apologise to them for, but some explanations would be welcome if one of the few successes of the Levein era – the return of a disciplined, focused and committed mentality throughout the squad – is to be preserved for his successor.

Edited November 12, 2012 by stewarty