The generic Hearts thread

[007]

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Not necessarily - this is what the FoH letter says; Paragraph 5.3 is quite interesting (for Hearts as well as other fan owned clubs like Well).



Dear Member

We have decided to revisit an important aspect of our future governance arrangements, and we would like your views. We attach a short Q&A with this email, the background to which is set out below.

1. What’s this all about?
Our future governance arrangements contain a restriction on any disposal of the Foundation’s shares in the Club acquired from Bidco. Before such a disposal to a third party can proceed, it must be put to a vote of Foundation members (including Affiliate Members) and sanctioned by a majority of not less than 90% of the votes cast.
The issue is: Is this 90% requirement too high? Should the requirement be reduced to 75%?

2. Why is the board re-opening this topic now?
The review is prompted by two factors. Firstly, feedback at the AGM in December. At that meeting, we were urged to look again at the issue, with views being expressed that 90% was too high. Secondly, awareness of investment trends in Scottish football (see 5.3 below).

We have a window in which to address the topic. At present, if we decide to change the majority requirement, we need a 75% vote in favour at a general meeting of members. However, once the ownership of the Club passes to the Foundation (an event scheduled for April), we would need a 90% vote in favour at a general meeting and the logistics of organising that meeting become more complicated. It therefore makes sense to review the issue over the next few weeks.

3. Was the 90% requirement discussed in the governance consultation?
Yes. The 90% requirement was part of our governance proposals throughout the consultation process which ran from April 2017 to November 2018. At that time, this particular point generated little, if any, comment.
At the end of the consultation period, the members overwhelmingly approved the final proposals. This approval related to the proposals in their totality, and there were no separate votes on any constituent elements of the proposals. The request raised at the AGM is effectively that the 90% requirement should now be considered separately.

4. What are the arguments in favour of a 90% requirement?
[Note: the discussion in 4 and 5 below is framed in terms of the Foundation transferring majority ownership to a new owner. An alternative scenario of the Foundation transferring a minority interest is, however, also possible. The 90% approval requirement would extend to that latter scenario.]

4.1 Transferring majority ownership of the Club to a new owner would undoubtedly be the biggest collective decision the Foundation members would ever take.
We would be deciding who the new owner should be, with all the responsibility that places on us. We would have to decide - are they the right people to own the Club? Will they have the best interests of the Club at heart, and do they have the financial backing to sustain the Club financially?
A decision of this importance should only be taken with the support of a substantial majority of the voting members.

4.2 A meeting to consider a proposed transfer would be organised so as to maximise the voter turnout. Early voting (electronically or by mail) would be possible, as well as voting at the meeting in person or by proxy. A good turnout of members would reduce the risk of a small unrepresentative group of dissident members being able to block the sale. See 5.1 below.

5. What are the arguments against a 90% requirement?
5.1 A 90% majority requirement increases the risk of a small and unrepresentative minority being able to block a sale which might be supported by a large majority of members. Depending on the overall size of the Foundation membership at the time and the proportion of that membership which participates in the vote, the fate of the Club could be decided by a small number of people. This risk would be reduced if the majority requirement was 75%.

5.2 Football regulation has mechanisms to protect clubs against unscrupulous or untrustworthy individuals acquiring ownership. A prospective owner or director must be a fit and proper person, and financial regulations are designed to stop clubs careering into financial turmoil. It is an exaggeration, therefore, to say that a supermajority is required to provide this protection.

[Note: Having said this, it has been suggested at times that the regulatory protections are insufficient in practice, in that prospective owners are not effectively vetted by the football authorities, while financial regulations are subject to numerous caveats and are not strictly enforced. The shortcomings were highlighted by Bury FC, which was expelled from the English Football League in 2019 as a direct result of poor ownership and longstanding financial problems.]

5.3 The Scottish football scene has changed in the past 12-18 months. There has been an increase in external investment into our clubs. A lot of this investment has come from overseas, particularly the US. Scottish clubs are currently seen as viable assets to attract long-term investment. The Scottish Premiership is a very competitive league and the pressure on owners to maintain investment and keep pace with their rivals is intense. If a need for unplanned capital expenditure arises at a club, the fan ownership model is generally not regarded as well-suited to deliver funding.
Approaches to the Club by potential investors have already been made (through Bidco). If this current climate in Scottish football continues, it is possible that such approaches might start to arrive with even greater frequency.
Against that background, it is arguable that a 75% majority requirement would be more appropriate and more in keeping with normal business practice. It provides greater flexibility and room for manoeuvre, while nevertheless still requiring a substantial majority in favour of a sale.

6. How will the views of members on this issue be sought?
We are going to conduct an online survey of our members over a one-week period. Members will be asked to indicate which majority requirement – 90% or 75% - they favour. There is also space in the survey to tell us about any comments, questions or concerns you may have. We will anonymise the identities of respondents.

Don't think much of the argument in favour of the 90% (no. 4). There is nothing in there that is an argument in favour of it and it doesn't appear to be a very balanced piece of writing. Thought the whole point was to prevent a Romanov type character killing the club but there's no reference to the risk of that possible scenario.

[The 90+2]

Tomorrow Stendel will be bottom with his current club and the team he built and was sacked from this season may also be bottom. Yet for some reason both set of fans both love the guy. Imagine Jack had done as poorly as the guy? It’s absolute madness.

[Hibeesmad]

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Tomorrow Stendel will be bottom with his current club and the team he built and was sacked from this season may also be bottom. Yet for some reason both set of fans both love the guy. Imagine Jack had done as poorly as the guy? It’s absolute madness.

Am I right thinking that they are still bottom of the form table since his arrival?

[Haymaker]

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Am I right thinking that they are still bottom of the form table since his arrival?

Heroic draw against the sheep and a fluke win against the Huns. Doesn't matter the rest.

[Hibeesmad]

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Heroic draw against the sheep and a fluke win against the Huns. Doesn't matter the rest.

Stendel is a diamond.

[I'm_cabbaged]

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Righteous Individual?

Rabid inbred??

[Since452]

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Tomorrow Stendel will be bottom with his current club and the team he built and was sacked from this season may also be bottom. Yet for some reason both set of fans both love the guy. Imagine Jack had done as poorly as the guy? It’s absolute madness.

Two small clubs just happy to be in the league they're in

[Waxy]

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Hamilton are not very good but they faced a team with a lot more quality tonight. Saturday will be a game more to their level. I'm calling a score draw this weekend.

Hamilton look pretty rotten. The battle of the rottens this weekend though.

[green day]

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Don't think much of the argument in favour of the 90% (no. 4). There is nothing in there that is an argument in favour of it and it doesn't appear to be a very balanced piece of writing. Thought the whole point was to prevent a Romanov type character killing the club but there's no reference to the risk of that possible scenario.

Its an odd one, isnt it?

It shouldnt really be a surprise to them that raising capital as (a) a club recently in admin and (b) fan owned, was always going to be a challenge.

Hearts fans were correctly told that owning 90% of the club means a Romanov II situation is impossible.

On the cusp of fan ownership they are being asked if they want to "move the goalposts a bit". I have no idea the reaction over there, but it would be meltdown on here if the tables were turned.

n.b. This is exactly the same problem that will face Motherwell, debt free or not.

I saw a post from a Motherwell fan elsewhere saying that, although their administration was 20 years ago, they were told at the AGM that they will still find raising money from traditional sources almost impossible (no idea if thats 100% true).

[jacomo]

I believe FOH have received an email from a Nigerian prince who is experiencing a few short term difficulties but is keen to invest much of their £200m fortune into Hearts.

They don’t want any voting technicalities getting in the way.

[Jack]

So if there was a change of ownership, like what happened at Hibs, the new majority shareholder would pay bidco/foh?

Who would get that money? bidco/foh? Would there be a pay out to the members?

How much have they collected? ... and paid in so far?

[Not In The Know]

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Its an odd one, isnt it?

It shouldnt really be a surprise to them that raising capital as (a) a club recently in admin and (b) fan owned, was always going to be a challenge.

Hearts fans were correctly told that owning 90% of the club means a Romanov II situation is impossible.

On the cusp of fan ownership they are being asked if they want to "move the goalposts a bit". I have no idea the reaction over there, but it would be meltdown on here if the tables were turned.

n.b. This is exactly the same problem that will face Motherwell, debt free or not.

I saw a post from a Motherwell fan elsewhere saying that, although their administration was 20 years ago, they were told at the AGM that they will still find raising money from traditional sources almost impossible (no idea if thats 100% true).

They’ll go for it. All this self righteous crap about fan ownership was a necessity. They don’t give a dam if they went through another Romanov scenario. Just as long as they had 10 years of overspending (two doped cups) and a few charities robbed, councils and students all thrown in for good measure.

[green day]

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So if there was a change of ownership, like what happened at Hibs, the new majority shareholder would pay bidco/foh?

Who would get that money? bidco/foh? Would there be a pay out to the members?

How much have they collected? ... and paid in so far?

Again, this is one of the grey areas of "fan / community ownership" that those fans of it dont mention.

Bidco have an agreement to sell to FoH, that is about to happen.

If a transfer of ownership were to happen, FoH would need a membership vote on it, and clearly the "who gets the cash" question will be front and centre.........not the same but similar to the HSL question about buying up nominee shares currently not in the hands of Ron Gordon.

Their current poll on % of votes cast to dispose of shares will seem like a walk in the park compared to any bunfight if there was a serious bid for Hearts.

As things stand, Hearts cant source outside income, but they have raised £9m from FoH and god knows how much from anonymous people.

They would be right down the crapper without these.............

[FilipinoHibs]

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Its an odd one, isnt it?

It shouldnt really be a surprise to them that raising capital as (a) a club recently in admin and (b) fan owned, was always going to be a challenge.

Hearts fans were correctly told that owning 90% of the club means a Romanov II situation is impossible.

On the cusp of fan ownership they are being asked if they want to "move the goalposts a bit". I have no idea the reaction over there, but it would be meltdown on here if the tables were turned.

n.b. This is exactly the same problem that will face Motherwell, debt free or not.

I saw a post from a Motherwell fan elsewhere saying that, although their administration was 20 years ago, they were told at the AGM that they will still find raising money from traditional sources almost impossible (no idea if thats 100% true).

For 30 years Hearts ran their football club by ever mounting overdrafts to banks. That avenue is firmly closed as they essentially defaulted on £70+ million of debt, bankrupting one bank in the process. Since then they have been unable to live within their normal football income. They have relied on monthly contributions from fans; loans from budge and "mysterious" donations. All are likely to dry up. At the same time they have miss managed badly: 100%+ on a new stand; millions wasted on relaying their pitch; poor team manager appointment;: and a bloated squad of over paid mediocre talent. No bank or investor will touch them. They are truly a basket case.

[Greenworld]

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So if there was a change of ownership, like what happened at Hibs, the new majority shareholder would pay bidco/foh?

Who would get that money? bidco/foh? Would there be a pay out to the members?

How much have they collected? ... and paid in so far?

I'm not 100% on this but I dont think any monies would got to the fans I think a bit similar to Hibs a few million would be put aside for further refurbishment of the stadiam act.
Remember the three old stands are in very poor condition done on the cheap .

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[007]

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So if there was a change of ownership, like what happened at Hibs, the new majority shareholder would pay bidco/foh?

Who would get that money? bidco/foh? Would there be a pay out to the members?

How much have they collected? ... and paid in so far?

Good question. Does foh divvy the money up between the 8000 "donators"? Jambos I know make out they're philanthropists of Bill Gates proportions so surely the "donators" aren't expecting anything back.

Newspaper articles from 2014 say Bidco acquired 78.97% and are now saying 75.1% is transferring to the fans.
Is that Budge retaining a 3.87% shareholding for herself? If that is the case then selling the club for £5m would net her approx. £200k which on top of the interest on £2.5m at (6%?) is a tidy sum, even if she has waived interest for a year or 2.

Wonder if it is Budge that is trying to push this change through. It seems to be at very short notice which is a classic scam artist technique i.e. you need to decide now or it is too late. Who brought it up at the agm in December, a Budge stooge perhaps?

[FilipinoHibs]

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Good question. Does foh divvy the money up between the 8000 "donators"? Jambos I know make out they're philanthropists of Bill Gates proportions so surely the "donators" aren't expecting anything back.

Newspaper articles from 2014 say Bidco acquired 78.97% and are now saying 75.1% is transferring to the fans.
Is that Budge retaining a 3.87% shareholding for herself? If that is the case then selling the club for £5m would net her approx. £200k which on top of the interest on £2.5m at (6%?) is a tidy sum, even if she has waived interest for a year or 2.

Wonder if it is Budge that is trying to push this change through. It seems to be at very short notice which is a classic scam artist technique i.e. you need to decide now or it is too late. Who brought it up at the agm in December, a Budge stooge perhaps?

Any takeover would have to buy out FOH's 75% stake. FOH maybe through an AGM would decide what to do with money. Players pool or refurbish one of the stands.

[Cataplana]

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Any takeover would have to buy out FOH's 75% stake. FOH maybe through an AGM would decide what to do with money. Players pool or refurbish one of the stands.

More likely they would spend it on a big shiny thing which would confirm their world status.

[WhileTheChief..]

An awful lot of wishful thinking here that Budge is trying to scam them.

[Steven79]

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An awful lot of wishful thinking here that Budge is trying to scam them.

She already has if they think that stand really cost around £20 million...

[Bostonhibby]

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An awful lot of wishful thinking here that Budge is trying to scam them.

I agree, She's not, it just that the mismanagement of all that extra cash we keep hearing about is a real hoot, long may it continue. Look where it's got them so far.

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[jacomo]

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She already has if they think that stand really cost around £20 million...

[007]

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An awful lot of wishful thinking here that Budge is trying to scam them.

Maybe scammed them by accident rather than by design. Hired Levein to waste their money on dud players. Paid double for a new stand.

Leave the deliberate scamming to the next owner.

[jacomo]

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Maybe scammed them by accident rather than by design. Hired Levein to waste their money on dud players. Paid double for a new stand.

Leave the deliberate scamming to the next owner.

It’s a great defence... if the heat gets too much, Budgie will just fall back on her ‘stupid old biddy’ defence.

“Me, funnelling cash to my brother? Och no I just forgot to order the seats, measure the dressing rooms or have any plan whatsoever for the rooms behind the glass curtain. All these wee things add up. Now, where did I put my keys?”

[cocteautwin]

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I agree, She's not, it just that the mismanagement of all that extra cash we keep hearing about is a real hoot, long may it continue. Look where it's got them so far.

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Yup, just incompetence as far as I’m concerned. It’s just fun to keep score on how much they’ve thrown at their Bottom Of The League project. Might be £30m by the end of the season.

[Jack]

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Any takeover would have to buy out FOH's 75% stake. FOH maybe through an AGM would decide what to do with money. Players pool or refurbish one of the stands.

That was my original thought but it would mean the new majority shareholder would in fact only pay for half the club as what (s)he's paid to FoH is (immediately) reinvested into the club thereby increasing it's value.

New owner pays £5m for the club. FoH receive the money then reinvest it in the club. The jambos are now worth around £10m.

We've seen from Ron Gordon majority shareholders are keen to have a controlling interest so as a by product FoH basically become toothless.

To be honest I know they were gullible enough to pay Mad Vlad a million for non-existent shares but I doubt even they'd be daft enough to get bitten again.

[AltheHibby]

I see they have started a thread on our finances. It appears that they know as much about finance as I do about brain surgery.

https://www.hmfckickback.co.uk/index...rofit-or-loss/

[Since452]

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I see they have started a thread on our finances. It appears that they know as much about finance as I do about brain surgery.

https://www.hmfckickback.co.uk/index...rofit-or-loss/

Hearts fans dissecting Hibs finances. Hibs fans dissecting Hearts finances. It's all the same. The reality is both Hibs and Hearts are looking pretty healthy financially. Especially Hibs.

[Hibeesmad]

How's the table looking?

[Since452]

When will they stop blaming Levein and the keeper and realise Stendel is a donkey?