Hearts have come a long way since the club was placed into administration in 2013, when they were deducted 15 points and then relegated to the Scottish Championship. Much of the credit is due to Ann Budge, who took ownership in June 2014 in partnership with the Foundation of Hearts, following the misguided Romanov regime.
In August 2021 Budge signed over 75% of her shareholding to the Foundation, making Hearts the largest fan-owned club in the UK. The club described this as “Heart & Soul Day”. This approach has served the club well, though the model going forward is likely to still require the support of benefactors.
Hearts once again posted a pre-tax profit, though this dropped from £1.7m to £0.3m. Revenue rose £6.2m (42%) from £14.6m to a new club record of £20.8m, but this was more than offset by £7.4m (38%) growth in operating expenses.
Hearts’ record turnover was driven by their involvement in the Europa Conference League group phase. This led to increases in both broadcasting, which more than doubled from £3.5m to £7.8m, and gate receipts, up £1.0m (20%) from £5.2m to £6.2m.
However, the club was at pains to emphasise that commercial income also rose £0.8m (14%) from £6.0m to £6.8m, thanks to growing commercial operations – hospitality, retail, sponsorship and advertising.
Not all clubs have published accounts for 2022/23, but Hearts’ £0.3m profit is the third best financial result in Scotland to date, albeit miles below Celtic’s record-breaking £33m profit. That said, Hearts’ performance was only made possible thanks to “very generous” donations of £6.2m.
In general, Scottish clubs usually aim to break-even, so even the largest losses are relatively small, with Rangers’s £4.1m deficit being the only one in the league above £2m.
Player sales
Hearts’ profit from player sales decreased from £0.5m to £0.4m. There were no major sales with most of the departures being either on free transfers or loan deals.
Hearts have made very little money from player sales with only £4.6m profit from this activity in the last 10 years. In this period they have only generated more than a million pounds on one occasion (and that was only just broke through that barrier). On the one hand, this is a good sign, as it shows that Hearts will keep hold of their playing talent, unless a deal makes sense. That said, Ann Budge has admitted that this is an area for potential improvement: “Another thing ourselves and other clubs must do better, and it’s hard, is player trading. That’s where you can make so much money.”
Donations
Hearts figures have significantly benefited from exceptional items, especially £31.2m donations in the last seven years, including £6.2m in 2022/23 (benefactors £4.5m, the Foundation of Hearts £1.6m). Since its inception, the FOH has contributed over £16m of funding, which the club described as “a truly amazing achievement”.
However, the lion’s share of donations still comes from individual benefactors, including James Anderson, who put in £4.5m last season. The Edinburgh philanthropist was appointed to Hearts’ board in July 2021. These donations clearly give Hearts a financial advantage over other Scottish clubs, but whether they should still be considered as an exceptional item is debatable, given that they have noe been provided seven years in a row.
Hearts’ £20.8m revenue is now the third highest in Scotland, £5.0m ahead of Aberdeen’s £15.8m. However, the magnitude of their challenge is illustrated by the massive gap to the big two Glasgow clubs. This means that they are around £100m below Celtic’s £120m, while Rangers’ £84m is more than four times as much.
Hearts benefited from an estimated €5.6m UEFA TV money last season from the Europa Conference, though this was much lower than Scotland’s two representatives in the Champions League, Celtic €29.9m and Rangers €20.9m.
Hearts’ stadium development in recent years has cost more than £20m, increasing Tynecastle’s capacity to around 20,000 and improving other facilities (hybrid pitch, undersoil heating and supporters bar). Budge says that this should help generate an additional £3m in a normal season.
Wages
Hearts’ wage bill increased by £4.2m (37%) from £11.2m to £15.4m, easily a club record. The club said that this demonstrated its “ongoing and essential investment”. Headcount shot up from 237 to 276 with players, coaching and football support staff rising from 117 to 130, while administrative and commercial staff increased from 120 to 146. This means that wages have more than doubled since promotion from the Scottish Championship in 2021 from just £7.5m.
Despite the steep increase, Hearts’ £15.4m wage bill is still only around a quarter of Rangers £64.0m and Celtic £60.9m. However, they are now well ahead of Aberdeen £11.9m, though it will be interesting to see if their wages fall this season when they are not competing in a European group stage.
The club’s view that it can “look forward with confidence to the future” does not seem unreasonable, though the major challenge of competing with Celtic and Rangers remains.
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