Levy holds out for the pot at the end of the rainbow
Wednesday, August 5, 2009 at 8:22PM From the Tottenham website:
LATEST NEWS
Bent transfer - Stock Exchange Announcement
The following statement has been released to the Stock Exchange:
5 August 2009
Tottenham Hotspur plcPlayer Transfer
Tottenham Hotspur plc announces that agreement has been reached for the transfer of the player registration of Darren Bent to Sunderland AFC for a total consideration of up to £16.5 million.
Daniel Levy, this time there will be no melted bagels thrown at your car windows. Neither will there be effigies burning outside on your front lawn at 3am in the morning with your guard dog peacefully asleep by my feet with a tranquiliser dart in its arse. No sir. For this one-off occasion, I am placing aside all the politics we disagree on and would simply like to say...well done for holding out and getting what you wanted rather than giving them something they want for far less. I guess Sunderland’s demands for £20M for Kenwyne Jones has come back to playfully slap them in the face. Not a penny less is quite obviously a winning strategy.
They got their man. We get our money back. Well sort of. Close enough anyway. Have to laugh how Sky Sports News are reporting it as £10M (is this what Sunderland are telling the world?) Since when do those extra clauses (consisting of further payments based on performance and appearances) get left out of the transfer fee when made public? If Bent manages to trigger those clauses, it's more money our way.
I didn’t expect us to get £10M+ to be perfectly honest. He's not worth that much.
And here’s the magic.
We don’t tend to ever look this deep into a transfer; we simply take what a player is sold or bought for. Thanks to Intrepid over at GG for the explanation, something unlikely to be discussed or understood out in the stands:
The Charlton deal was a total of £16.5 million with £1 million as add-ons. The profit of £5.5 million will be shown in the audited accounts if we receive the full consideration of £16.5 million from Sunderland as Bent’s value to the club’s accounts was £11 million when we sold him - £16.5 million divided by 6 (length of contract) multiplied by years he spent with us (2) - that figure taken from original total fee of £16.5 million.
This deal highlights again how football player trading is a complete nonsense – we have paid Charlton £16.5 million and if Sunderland pay us £16.5 million then in monetary terms (actual money in the bank)we have broken even but in accounting terms we have made a “profit” of £5.5 million. That “profit” attracts taxation so we get taxed on money we have not really received.
In accounting terms every asset has to have a value to be accounted for – player’s values are accounted for by amortising their costs to the club (transfer fees and/or signing on fees) over the length of their original contract.
e.g. Bent signed a 6 year contract for a total consideration of £16.5 million (£15.5 million plus £1 million add-ons) – the way the accounts work is that when hejoined he was worth £16.5 million and for each year he is with us his value drops by £2.75 million p.a. - £16.5 million divided by 6 (the number of years of his contract). He has been with us for 2 years so his “value” to the accounts is £16.5 million minus £5.5 million (2 years @ £2.75 million) therefore as of today his “value” to the club was £11 million and anything we get from a transfer fee over and above £11 million is accounted for as a profit.
However, the above numbers may need a little adjusting because according to Charlton’s AGM, due to their financial struggles, an agreement was made for the money to be paid up earlier and Spurs got a discount (so to speak) for agreeing to do so. Meaning the final fee that was paid to them was in the region of £12.5M.
Daniel, my knickers are in the post.
XxX
P.S. Daniel, if Bent scores 25 goals and they pip us to Europe by a point and we lose out on millions as a consequence then you will be held unequivocally accountable.
Reader Comments (38)
Who'd have thought it? Two clubs stupid enough to pay £16.5 million for Bent.
Bent was a stupid buy for Tottenham, but a wise one for Sunderland I think, even if they did have to pay a bit more than they should have.
So when is £16.5M, £16.5M?
*scratches head*
My head is SPINNING
Well done Levy, Now give the cash to Harry for reinforcements.
Word is that Bassong has all but signed on the dotted line and that we still retain an interest in KJH, Personally I like Spooky's idea of Gago and Negredo if KJH doesn't join
Sadly, we may need to ignore the £12.5M bit in my article. Intrepid had this to add relating to 'discount':
They had to take less money for getting the money sooner but unfortunately we did not receive that discount as according to Charlton’s Annual Report they went to a financial institution for the money who gave Charlton the reduced amount but we had to pay the full amount to the financial institution – it also included the fee for Luke Young.
Which means we are not quite in profit just yet.
Need money? Learn how to get a loan even with bad credit.
KJH is signing for AC tomorrow
Well wasting all that time on Bent, Looking more and more likely that we have lost out on Huntleaar....
For me I would have prefered to let bent go cheap last weak and buy Huntleaar than waste a whole week for what was i bet only a very little more money.......
the signing of crouch signaled the end of talk of huntlaar. despite of what harry has said.
In response to 232331, let's be honest, even if we had sold Bent quicker, if you were in KJH's shoes, where would you go? To the team that has Pirlo and Gattusso behind you or the one that has Palacios and Jenas?
Know what decision I would make in his situation.
I've always said that Levy is the best negotiator in the Premier League - Huge profits from Keane, Berbatov, Carrick, Defoe, money back from Bent, Kaboul and Zokora. If he can get £10m for Jenas, I'll put a picture of him on my bedroom wall!
To date, what has let him down is his football-related decision making and that is why he initially employed Comolli - to take that burden away from him.
Now thankfully having seen the error of his ways, he's brought in an experienced manager, who might not be the most clean cut character, but seems to have a more all-round understanding of what it takes to build a decent squad and win football matches.
Still another 4 or 5 players away from the top 4 but definitely heading in the right direction.
COYS.
cashing in nicely here mr.levy. berbatov £30mill, zakora £8mill, carrick £20mill or there abouts, and now bent £15mill. its alot of money. i think spurs trick every year is to get rumoured intrest in every top player around (huntelaar for example) just so as they can make sure they sell lots of season tickets, then be too tight to pay the sort of money we get for our players, thinking every player will jump at the chance to sign for spurs last minute instead of a champions league club. when all the top names we have been linked with all window have gone to other clubs, we finish up with average players for half the price (eg.peter crouch)
seems like we are not in the market for top players any more. we are too tight to get them. if we would just up with the asking price ocassionaly, we could be starting with asharvin and huntelaar up front. but because we dont its portsmouths old crouch and defoe. . . . . great.
mid table at best, our boards transfer policies are seriously hurting us now!
in harry we trust
in response to some of the posts on here;
whoopie, well done levy for making so much money on our average players. cant you iddiots see he isnt buying anyone any better??????
i wont be putting a picture of him on my wall, he should put a picture of me on his wall, for believing half the stories about top players coming in and buying my season ticket every year!!
what amug i am and you lot arnt much better!!
Good gravy, I just read the three page thread on GG and I must say, although it makes sense, the whole thing is a headache!
Thank you Darren Bent for your services, enjoy Sunderland and the football club.
The depreciation of the £2.75m per year is offset against our profit each year to reduce our tax liability, hence we having to pay tax on any amount made on the remaining balance.
Nice breakdown. I get the gist I think even if the numbers need to be massaged. Well done to Mr. Levy if these monies go towards getting in another Chevy (or something a bit classier eh?).
you lost me at "Daniel....."
Hahaha
Feck me just on teletext Spurs have agreed a fee with Blackburn for Samba and a deal is in place which is fully expetecd to go through for the left sided Bassong.
Beevers from Sheffield Wednesday also linked. Three centre-backs?
why can't swaps be player(s) for player(s) like they are 99% of the time in US sports instead of player(s) for cash...i thought I had football transfer logistics down but this post proves i'm slightly mistaken haha...oh well, as long as you guys say Levy is doing a good job with the $$ (sorry, don't have a pound or euro key here lol), I believe you!
Great post!
no matter how the numbers stack up, the issue is that the club still needs to run itself as a viable business. Our profits are small, and so the whole 'lets lose a few more million on Bent so we can get KJH quicker doesn't financially stack up'.
And in case people don't think that's an important part of the equation:
Leeds?
Southampton?
And don't think the barcodes problems have gone away just yet.
The Hammers position looks precarious after their icelandic investor looked more like a damp squib than a white knight.
And pompey look set to start the season with a dozen players and an 'interim manager' currently.
Money is tight, and considering we will have to invest to redevelop WHL, it's more important than ever that we don't shoot ourselves in the foot chasing the 'impossible dream'.
I'd personally rather have a sensible business model that allows us to survive even if mid-table is all we can muster , than go for the shit or bust speculative spending £50 mill getting in 'top players' on the off chance we will be in with a shout of CL. Nope, do it the everton way, build firm foundations first, then progress steadily is the order of the next few seasons for me.
So for me, I say 'well done Levy on getting you money back' and if you are going to invest it, spend it wisely in the current market.
Tricky - my thoughts exactly. The money for transfers will dry up as more of our revenue is set aside for the stadium development. That's why players like Jenas won't be sold and why we have bought up a lot of 'youth talent' in recent years.
The 5 year plan to get CL hasn't worked. Now we move into the next 5 year plan a bit early, whihc is the stadium, etc.
Then, with more revenue, we should be better placed to go for it again.
doing it the Everton way , you are in fact spot on Tricky but it just sounds so awful that we have to take lessons from them. The only thing i have to add is that they also are realising that with sensible management and cheaper players they can't get it to the top 4 ... So they are getting nervous and spent like 20 mil € on a average belgian player with elbow issues ...
I guess becoming top 6 is doable with a sensible business model , intense scouting and a bit of luck with new arrivals but getting in to the top 4 requires money ...
A top management makes a top club and before that was sometimes enough to get a cup/title every now and then , but nowadays you need the top players 2 ... F.ex. you guys talk a lot about Torres being a gamble for Liverpool but the rest of europe already knew him as a world class striker ... Same goes for his replacement Aguro , but that type of player can only be attracted if the money is present.
It's a shame really what football has become , and i can tell you it hurts even more for the little countries (and the italians who are almost broke)
But as you said , rather mid table with hopes then a bankrupt club with a brief span of titles ...
But look at the gooners , they have set aside a lot of money for their new ground but are suffering when it comes to signing and keeping players (to our amusement). Wenger is an biased , anti charismatic **** but he does manage to stay top four with a smaller budget then the other 3 and a squad of well scouted kids...
They do not buy a lot of big names but have a better track record when it comes to finding the potential at a very young age
mmm i feel a bit ashamed of myself for having to admit that ...
In reponse to Aug 6, 2009 at 9:33 AM | Tricky
How fantastic it is to hear someone articulate a thoughtful and intelligent point of view. I completely agree with you. Lets keep building, slow and steady progress, a smaller squad and belief in youth.
When all these billionaire owners decide to walk away, there will be several clubs in trouble financially. Its interesting that if you're a big club, you get bought out by 'billionaires' who then loan the money to get the club (i.e. Glazers). If you're a small club (Chelsea, City) you get bought out by playboy billionaires who go about it differently by using their personal fortune to lavish the team with players. The latter are the ones who will suffer gravely. Interestingly, the likes of the Glazers also have obvious problems. Utd dominate in England yet still made a massive loss with finances.
A club like Spurs remains 'untouched' in that we can't be bought out by any cocky billionaire unless Levy wants us to be sold. And the fact we look to keep everything in order actually puts us in a good strong position.
At some point, all this money in the game will come crashing back down to earth and it will burn some clubs to the ground.
We'll be safe.
Belgian, the gooners are an interesting case in point.
They attract players for four reasons:
- recent history (in last 10 years) of success in league and cup.
- they still have their current myopic manager who is rated and known accross europe
- champions league football on a continuous basis
- wage structure that allows 100K a week
Their decision to build the new stadium was at a time when they were top 2 in the league consistently and the cost of the new ground could be offset by the income from redeveolping the old ground to residential property.
Plus the revenus stream from CL and the new stadium would allow for investment once the development had effectively 'paid for the new stadium'.
It was a great idea and at the time the rising house prices meant that whilst cash would be tight for a while they would come through the other side With zero debt and a strong balance sheet. As I said, good idea 'at the time'.
It was however inconceivable the rate of decline of the development market, at a point whereby the properties were starting to be due for completion. It was also inconceivable that they would not be in the top 4 min and so have the revenue from the CL.
What we have been seeing for the last two years is people walking away from their minial deposits and a surplus of developments in the vicinity, with a knock on effect of the fact that the value they have places upon their asset had been steadily depreciating. A small two bed flat in north london for 400K just doesn't make sense.
So they have had to refinance their short-term debt, and if it weren't for the net profit on player transfers thatthey had made they would really be in the brown stuff. BUt they are not out of the woods either. They have had to increase the value of the debt (greater even that the 'net profit' they made last year if you look close enough at the annual report.) and the longer they continue to not be able to sell their development properties the more the debt will cost them, therefore restricting their purchase power. And anyone who has been in debt will know that debt costs more money the longer you have it for. So try £300mill pounds worth of it!
Don't get me wrong, they did nothing wrong a the timing of the decision and have always (and unfortuantely) been financially a well run club. But as the song goes 'what a difference a day makes' , well try a couple of years!
I suspect that their revenue from the new stadium will keep them afloat until things pick up. And clearly they have been cautious in player acquisition But if they don't qualify for CL, when then they could yet end up with a 60,000 seat white elephant. As they are not completely out of the woods just yet.
Why do you think they haven't bought any players this season? could it be that perhaps if they don't through the preliminary round of CL to get into the group stages, they simply don't have the money? A goon would deny this, but a realist knows there is perhaps more than an element of truth.
So for us, I would urge caution rather than extravegance. We have our players who will do enough to keep top 10, without breaking the bank. And just ask a saints fan if they are looking forward to their first game of the season: two former FA cup finaists from recent years both suffering. Yep, Saints are hosting Millwall (another club to suffer a spiralling decline due to over extravagent spending in the past). So I would avoid southampton this weekend if you were thinking of a trip to the south coast!
thanks for the tip :-) and my point was exactly what you are describing above (be it mine was a bit shorter) , they suffer because of a lack of money (for the reasons states above )
I hope you did not think i was trying to disagree , the only credit i want to give them was the discovery of a lot of young potential at low prices. I knew Van persie when he was just a hard to manage player in Holland that no one wanted ... they have an impressive scouting system.
As i stated before , i would choose mid table healty over bankrupt champion every day ...
Spurs Muaythai.....you are a bit cynical aren't you??
Levy isn't selling our gold on the cheap and nor is he making huge profits on it and then sticking it in his pocket. Yes we sold Berba & Keane last summer and made £50m or so but we have then gone out and spent much the same on Defoe, Pavlyuchenko, Palacios and Keane. This summer Bent and Zokora have moved on (£20m) and Crouch and the young Kyles have come in for a similar sum and we will also see the arrival of bassong and definitely a CM. Again we will be spending more than we have made.
Those of you who think Huntelaar would join us over AC Milan and view our failure here as some fault of Levy are rather stupid. Huntelaar has the choice of any team he wants....already turned down Stuggart (3rd last season, in the CL pre qualification, like Arsenal), its not a matter of how much we bid for him, the price was set, its what we can offer. Regardless of our wage structure, we cannot offer Champions League, the pedigree of AC Milan or challenging for the title...in a straight fight we will always lose that battle unless a players motivation is to come to England or go where big dollar is being offered (Man City).
Tricky: Are you GilzeanIsKing in disguise? lol. Thanks for the goon explanation. I hope the same doesn't happen to us as we clearly don't have the scouting network they do or the stability in terms of the manager.
From what Levy said earlier in the year though, he seems to have a way of going about it that won't land us in too much debt.
sorry to shift the subject a bit here but has anyone else caught that bassong (if he ultimately does sign which it seems he will) is going to miss our first 2 games because of a RC? Doesn't really help our defense out early...
and bent saying that the tweet post helped the move is a joke. it was going to get done regardless. the fact that we could get 16.5 mil is evidence that the post did nothing...if sunderland used the tweet post for leverage/to expedite the process, we would not have gotten that much
Bassong got a 2 game ban for his second red card of the season. He missed the barcodes laast game of last season and will miss the fist ofthis.
If we sign him on Sunday, after NUFC's first game from which he is banned, he will have served his sentence and will be free to play for us vs L'pool. Simples!
thanks for that desonshire...espn made it seem like it was a surefire thing that he'd miss the first 2 games...espn also tried to advertise the barca v. seattle game yesterday saying it was gonna feature eto'o...whoops...i'll stop trusting espn now.
wtf. Thats 10 minutes of my life i'll never get back. Thanks a lot
Run along now. I'm sure there's a decent little piece on 606 for you to read.
I CAN`T BELIEVE HE REPLACED BENT WITH CROUCH I`M PISSED ,ONE AVERAGE PLAYER FOR BENT WHO WASN`T THE BEST ,BUT AT LEAST HE STILL KNOCKED A FEW IN ,I CAN SEE ,IT KEANE & CROUCH TOGETHER .TWO USELESS STRIKERS HITTING THE CORNER FLAG ,PLEASE DEFOE DON`T GET INJURED I COULDN`T BARE IT