Hearts owner Ann Budge has written a letter to the club’s players telling them their wages will be suspended from March 31 if they do not accept a 50 per cent wage cut amid the ongoing coronavirus outbreak.
The Scottish Professional Football League (SPFL) advised clubs on Friday that they have the power to halt contracts through the use of Clause 12, which can be triggered if the Scottish Football Association suspends football.
Hearts are set to miss out on £1m of income next month following the suspension of Scottish football and Budge has warned the club will not survive a six-month shutdown without implementing cuts.
Hearts striker Steven Naismith has accepted the pay decrease, while manager Daniel Stendel agreed to work for free during the period, and Budge says she makes no apology for asking staff to take wage cuts.
In a statement on Thursday, she said: In line with most other Clubs, we aim to hold sufficient cash reserves to cover two to three months of normal trading operations.
The reason we are implementing cost control measures is because we could be facing up to six months of totally abnormal operations.
Given that we all know we have to plan for that eventuality, I see absolutely no reason for sitting back and waiting either on a miracle or for the Government to bail out every company in the country… in a timely enough manner.
Neither of these options is likely to happen and, therefore, I make no apology for putting immediate plans in place to mitigate the problems heading our way.
Nor do I make any apology for being open and transparent with staff, players and supporters about the potential scale of the issue.
Faced with this unprecedented set of circumstances, it is incumbent upon all employers to be totally upfront and open with their staff. They, too, have to be able to plan.
Budge added that most staff have agreed to wage cuts, but that a number of players are still reviewing their personal situations.
Hearts continue ‘open dialogue’ with players
On Friday evening, Hearts released a statement, stating: The club feels it is necessary to clarify, once again, that contrary to a report in the media, no ‘warning’ has been made to our players in regard to agreeing to wage cuts or Clause 12 being invoked.
A letter was sent to the squad, on the advice of the SPFL and its legal advisors, in order to protect the Club’s rights. The covering email that accompanied the letter very clearly stated that:
We have not, at this time, decided to exercise this right and are working diligently to find an alternative solution to the unprecedented financial problems facing the Club as a consequence of the suspension of the game.
As previously intimated we plan to pay full salaries as normal until the end of March, 2020. However, in doing so, we need to make it very clear that we do not waive our right to suspend Player agreements in the future, should we require to do so to safeguard the future of the Club.
Hearts continue to have regular open dialogue with players and are all working together to get through this incredibly difficult time.
‘This threatens serious rift inside Hearts dressing room’
Analysis from Sky Sports News reporter Charles Paterson
Ann Budge’s decision last week to impose 50 per cent wage cuts to all Hearts staff caused a seismic shock to all at Tynecastle, and was an early indicator of just how seriously Scottish football is being hit by the coronavirus crisis.
This latest move threatens to create a serious rift inside the Hearts dressing room – and could be the trigger for other clubs struggling to pay their players to follow suit.
Hearts captain Steven Naismith says he is happy to accept the pay cut, but there is a danger Budge’s ultimatum could alienate the club hierarchy from those players yet to sign up to wage reductions.
SPFL clubs have been given legal guidance that they can effectively suspend contracts in the event of the league going into a hiatus. One source close to the Hearts dressing room has told Sky Sports News that ‘player power’ could have a major effect ahead of Tuesday’s March 31 deadline.
With the prospect of no football and thus no income for months, the ramifications of Budge’s move could quickly ripple across the league if it becomes clear clubs hold the power in negotiations to manage wage restructuring.
(c) Sky Sports 2020: Hearts tell players their wages will be suspended if they refuse 50 per cent pay cut