Levy holds out for the pot at the end of the rainbow
From the Tottenham website:
Bent transfer - Stock Exchange Announcement
The following statement has been released to the Stock Exchange:
5 August 2009
Tottenham Hotspur plc
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.
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.