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Tottenham set to spend big in January.

Posted on September 13, 2013 by Scraggs

I doubt that anybody in the football world does not by now know the name of Daniel Levy the Tottenham Chairman and one of the most powerful people in the game, many clubs have stated that he is a nightmare to do business with whether he is buying or selling. He managed to pull off a major coup this summer, not through want of selling Gareth Bale but by turning adversity into the most amazing transfer window in Tottenham history, setting the club up for financial stability for the foreseeable future and allowing the prospect of being able to buy more top quality in the next couple of transfer windows if need be. To explain this I have detailed below the nuts and bolts of the last transfer window with information on the subject taken from Forbes, a leading reliable source of financial information, this is what was extracted from their article on the transfer window involving both Tottenham and Real Madrid

Tottenham signed seven players at a cost of approx.£104m to replace seven of last season’s first team squad who were released, loaned or sold. Sales totaled approx. £107m. A transfer profit of £3m would come close to halving Spurs £6m loss from 2012 if everything else stayed constant.

On a straight money-in and money-out basis Tottenham might move into or close to deficit rather than profit but financial treatment differs for each type of transaction.

When paying a transfer fee to acquire a player the cost is not accounted for in the year of the transaction but rather it is amortized over the period of the player’s contract. It is assumed that the buying club will benefit from the player’s labours over the entire contract period and so the transfer fee is pro-rated over that length of time.

On the other hand when a club sells a player the fee is booked entirely in the year of the sale. The only adjustment is if the selling club had previously paid a fee to acquire a player and the sale was made before the end of the initial contract. In that case the selling club would “book” the fee minus any balance remaining from the first transaction.

There is no standard contract period but let’s say that for the purposes of this example all the players bought by Spurs during this transfer window have been given five year contracts and that none of the players sold had any residual balances from being purchased previously

This would be the net effect on Tottenham’ profit this season.

 

In Millions of Pounds Transfer Fees Transfer Fees Booked    Profit Increase                   2014
               In             Out                In                Out
Spurs £107 £104 £107 £21 £86

Give or take that is a potential £86m profit on this summers transfer dealings alone!

When you take into account that Tottenham and Daniel Levy did not even eat into a penny of their natural transfer fund for the season, generally about  £25m and they also have close to £60m extra in TV money then clearly the club are in rude health.

No doubt the money man in Daniel Levy will ensure that buying players and developing the new stadium project will take precedence over paying a huge tax bill, as on the strength of the above information the bottom line come the end of this financial period could break all records. I doubt very much that the wage bill has even increased by very much, if at all, bearing in mind the top earners sold or released.

When Tottenham do finally achieve Champions League football fairly regularly, when Tottenham finally bring home silverware and when the new stadium is built and operational then you will see just how big a club that Tottenham Hotspur FC really are. All those things will happen and when they do and it all comes together then, as we have said before, the giant will have risen.

3 to “Tottenham set to spend big in January.”

  1. Eric says:

    a back up striker please,dzeko what say ? Pato next summer anyone ?

  2. tom says:

    another big name striker I would think and that might see the end of JD

  3. Eric says:

    if we have to perennial title challengers,it will n should happen,sad but inevitable



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