As English extend suspension...
Budge’s pay ultimatum to Hearts players and staff
Crisis: Ann Budge (pic: SNS Group)
UPDATED 19 MARCH: Football fans across Scotland will be asking ‘who’s next?’ after Hearts owner Ann Budge stunned staff and players by asking them to take a 50% pay cut or face redundancy.
The Jambos owner has made the shock proposal in a bid to keep the club going amid a financial meltdown after the season was put on hold due to the coronavirus pandemic, a move she said would cost the club £1 million.
The indefinite shutdown is expected to cause lasting damage to a number of clubs starved of revenue but the stark message from Tynecastle came out of the blue.
Not since the chaotic reign of Vladimir Romanov has there been such talk of financial crisis in Gorgie and the mere thought of revisiting administration would send shivers down the spines of supporters.
To assist struggling clubs, the Scottish FA has brought forward an agreed £1.5m payments package which was to be distributed later in the year. But that may not be enough to save jobs in these uncertain times.
In a blunt statement, Budge said: “In order to try to prevent a staff redundancy programme and to protect as many jobs as possible, I am proposing to implement a club-wide salary reduction programme.
“We have asked all full-time employees, managers, coaches, players and player back-room staff, with effect from the beginning of April, to accept a 50% cut in their monthly salary.
“Staff and players alike, who feel unable or unwilling to accept this revision to their contracts, will, of course, be offered the option of contract termination.
“No-one’s full-time salary will fall below the living wage. In other words, if the 50% reduction would take anyone’s salary below this threshold, the full-time salary will be set at £18,135.
“Given the uncertainty of the whole situation with which we have been presented, we cannot say how long these measures will be in place. We will, of course, be continuously reviewing the situation.”
It’s unclear whether the club can force the players to accept such changes to their contracts, with the squad in urgent dialogue with their union, PFA Scotland.
The stark message will have shocked supporters, particularly as the club had seemed on safer footing thanks to around £10m of pledges from fans group the Foundation of Hearts.
“If I was not absolutely convinced that this is necessary for the future sustainability of our business, I would not be asking our employees to face these cuts,” said Budge.
“Never has it been more important that we stand together as colleagues, and I’d like to thank the staff for their understanding. Similarly, we would ask our fans and our FOH pledgers to continue to support us in any way they can, during this very difficult time.
“I thank you all and give you my personal assurance that I will do everything in my power to try to guide us safely through the next few months.”
Questions will now be asked about the actual running of the club, with the spiralling costs of building the new main stand – currently sitting in excess of £20m with further work scheduled for later this year at a cost of £1.5m – a prime concern.
Craig Levein: remains on payroll (pic: SNS Group)
Fans have also been perplexed that Craig Levein, the former manager and director of football, who was paid around £170,000 for his dual role, remains on the payroll despite his sacking last year.
In November, the club reported an operating profit of £1.6m to the financial year end of 30 June, largely due to donations in excess of £3m from unnamed benefactors. That took the total amount handed over by the mystery philanthropists to £9m in the past three years.
Budge owns over 90% of the club , although has an agreement in place to transfer 75.1% of those shares to the Foundation. The formal transfer was scheduled to take place in May after the season ended, although she has indicated that could be delayed by the COVID-19 crisis.
She will retain around 15% as a ‘legacy’ payment to herself.
Addressing the early release of the payments to clubs, SFA president Rod Petrie said: “I am pleased to announce the immediate cash payments to members of Club Licensing and Club Academy Scotland amounts which were budgeted to be paid later this year.
“Given the financial uncertainty faced by clubs, we have looked at areas of distribution where we can accelerate and pay now, rather than wait to pay on the usual distribution dates.”
English league extended
The English Premier League, English Football League and Football Association have announced that the suspension of play will be extended until 30 April at the earliest.
They also said they are committed to ensuring the 2019-20 season is completed, ruling out any prospect of competitions being declared null and void.
The extension has been agreed after scrapping a rule that previously said “the season shall terminate not later than June 1”.
It has probably helped decide the fate of Scottish competitions which are now likely to pursue a similar path.
Football supports NHS
Former England and Manchester United player Gary Neville has closed his hotels and said he will hand them over to the NHS. Not a single member of staff will face redundancy and all will receive full pay.
Chelsea Football Club has also dedicated its hotel to NHS staff. The club said the Millennium Hotel at Stamford Bridge will be made available to medics in north-west London.