Clubs post profit, and a boutique hotel plan
Scottish Football Finances final day: Hibs and Hearts. Report By Brian Donnelly
HIBERNIAN and Hearts have both powered to profit in the wake of an unprecedented lockdown, and both have robust support of backing that has come from benefactors and fan shareholders.
In the final day of our three-part series on Scottish football finances, the great Edinburgh rivals share a common strong point, according to the former chairman of one of the clubs who has also championed the development of football more widely through his political position.
Lord Foulkes, who stood down over actions by Hearts’ then owner Vladimir Romanov when he was at the Tynecastle club, pointed to the importance of local investors such as fund manager and philanthropist James Anderson but also of the involvement of fans in the running of clubs, and a connection with communities.
Hearts reported that it had become the largest fan-owned football club in the UK after the 8,500 strong Foundation of Hearts met the balance Ann Budge provided to save it from administration. It has plans to develop a boutique hotel.
Across the Scottish capital at Easter Road, Hibernian Supporters Limited, with 4,000 members, has pumped £583,000 into the club in the last three years and now owns 15.4 per cent of the shares.
Former Labour MP and UK Government minister
Lord Foulkes, who has compiled a report on club ownership for the Council of Europe, said both Hibs and Hearts owe their core strength to their supporters and outreach links.
In 2019, Hibs reported a £10.8m turnover, and a £2m profit before tax, with 2020 bringing an £8.9 turnover and a £1.2m loss, Hibs earlier this year posted a near £1m profit before tax for 2021 from a turnover of £8.6m.
Hibs finished eighth last year against third place the year before.
Clubs still face headwinds including high energy costs and inflationary bills for food and drink, as well as a potential alcohol sponsorship ban, which the SPFL said would bring “grave consequences”.
Ronald Gordon, the US businessman who took over the Sir Tom Farmer Hibs interest in 2019, said: “The state of the economy affects the ability of supporters to attend matches.”
However, he added that the club offers “flexible and cost-effective ways to purchase tickets on a seasonal ad match to match basis and seeks to provide value for money”.
Mr Gordon also said: “Revenues from attendances at matches and other income, including prize money depend on continuing sporting success, a dependency which affects all professional football clubs.” Hearts posted a significant £6.9m year-on-year increase in turnover to £14.6m last year, which compares to a 20% rise from £12.1m to £15.1m in pre-pandemic 2019. It posted a profit before tax of £2.9m that year, against £1.8m in 2018.
In 2022, profit before tax was £1.7m, against £2m the year before.
Hearts’ third place in the league got them group stage European football.
Baron Foulkes of Cumnock said: “Hearts are in a better state than I think they have ever been, financially well-off in a
Scottish context and with people like James Anderson and others putting in finance, and also being a model in terms of fan ownership.”
Lord Foulkes added: “The foundation, of which I’m a member, has put a substantial amount of money in, and we’ve also got a lot of fundraising things which have been successful, and community activity.”
He also said: “I think government should take a greater interest in the running of football and the development of football generally. We need to make sure that the ownership of football clubs remains with reputable people and preferably people with an interest in the area.
“We are lucky in Scotland that the clubs are very much part of the community and that is a good thing.” Professor Graeme Roy, of the Adam Smith Business School at the
University of Glasgow, said clubs face cost-of-living pressures but have the advantage of investor loyalty.
“You only have to look over the 150 years of Scottish football and, yes, there have been the high-profile administrations and clubs entering into financial difficulties, but it remains remarkably resilient if you compare it to other businesses or other entertainment industries.
“We’ve still pretty much got the same group of clubs in that context, so a lot of that is because people have pride in their local clubs, local communities and that’s what they prioritise. “So, it is not to diminish any challenges that they face, but, equally, they are resilient, they have got through big challenges in the past, and clubs will get through this challenge as well.”