The money matters behind the Bale deal

Gareth Bale. (Photo: Andy Brannan)
Bale's fee reportedly eclipses even the £80m Real Madrid paid for Cristiano Ronaldo in 2009 (Photo: Andy Brannan)
"He’s a very tough negotiator. It takes a long time to get a deal done because he is so shrewd. You’ve got to have nerve to try and be as good as he is" Peter Ridsdale on Daniel Levy
  • | by Graham Thomas

So, the horse-trading is finally over and Gareth Bale has signed for Real Madrid for a world record football transfer fee of £85.3m.

Bale is undoubtedly a thoroughbred. But that’s still an extremely expensive horse - like Pegasus crossed with Frankel.

It doesn’t even sound less if you say it quickly (and in Spanish). Cien millones euros (100m euros). And for those old enough to recall Britain’s first £1m footballer - Trevor Francis back in 1979 – 100 times as much seems quite a lot even allowing for inflation.

You might be wondering how Real Madrid can afford it. But you might also be pondering how they go about paying for it, too.

Do Tottenham Hotspur take a cheque?  Is the fee paid in instalments? Does it help the selling club to suggest others are in the market? After all, Spurs claimed a week ago that two other clubs had expressed interest in Bale.

You might also be contemplating the poker skills of Tottenham chairman Daniel Levy. He is the man who took the deal right to the penultimate day of the transfer window, whilst at the same time spending £105m of money he didn’t yet have on seven players to replace the one who was leaving.

Who better to give the inside track on all that smoke-and-mirror shenanigans than Peter Ridsdale, one-time chairman of Leeds United and Cardiff City, currently in that role at Preston North End.

It was Ridsdale who, in 2002, did the deal to sell Rio Ferdinand from Leeds United to Manchester United for a then world record fee of £30m. He says: "It doesn’t seem that long ago that I was involved in selling Rio Ferdinand for £30m to Manchester United.

"Today, there are deals going on all the time at that £30m level. The risks are getting higher, though, because a lot of these players haven’t played in the Premier League before and so you don’t really know how they will adapt.

"When I did the Rio deal I think I got £13m up front, £13m after 12 months, and £4m dependent on appearances.

"I have done the odd deal of £5m, which I did with Aaron Ramsey at Cardiff, which in the end Arsenal paid up front.  But it’s usual that it is staged payments.

"There are banks out there that are in the business of discounting transfer fees and paying you all the money up front. But they’ll take the view on the risk of the club, the bank guarantee, and add the discount for how many years the payments are over. You could argue in the current climate, that’s the way to go."

Neither Spurs nor Real Madrid have released details on how the payments are to be structured. But it has been suggested that the Spanish club offered two prices - one for £70m that would have been paid up front, another for the £85.3m that will be paid in instalments.

Ridsdale adds: "The issue one has with international transfers is to make sure that the subsequent payments over the years actually turn up on time.

"Obviously, you can get bank guarantees, and that depends on what club you’re dealing with in what country. In some countries the bank guarantees are more reliable than others.

"That’s part of the risk you take and I would have thought that’s part of what’s taken the time in the Bale deal because knowing Daniel, who is a very shrewd negotiator, he’ll want some assurances that he’s actually going to get his money.

Levy - long renowned as a formidable wheeler-dealer in the football fraternity - is widely acknowledged to have played a blinder during the Bale saga.

He has shopped around the world for replacements, squeezed as much out of Madrid as seemed possible, and pulled off the impressive trick of remaining popular with fans despite having sold the club’s best player.

"I’ve dealt with Daniel on a few transfers," says Ridsdale. "One was Robbie Keane from Leeds to Tottenham. Another was Chris Gunter from Cardiff to Tottenham. Daniel is somebody who I’ve got total respect for.

"He’s a very tough negotiator. It takes a long time to get a deal done because he is so shrewd. You’ve got to have nerve to try and be as good as he is."

Spurs’ tactic of claiming other clubs were at the table (Manchester United were rumoured to be very keen on Bale) is also one Ridsdale knows and admires.

"The first offer I got for Ramsey was £1m. By the time he went it was £5m cash up front and we had Liverpool, Arsenal, Manchester United and Everton in there.

"If you have a very talented player that there is a big market for, then it’s relatively easy. It’s a question of making sure you get the best price."

But for all the praise that has been heaped on Levy, Ridsdale says the real ball-breaking merchants, those who need the steeliest nerves, are the deal makers operating far below the Premier League - where a wrong move can mean extinction.

"If you’re in a situation where the deal isn’t a make or break on the future of the club then it’s like any negotiation, it’s time for cool heads and tough negotiators making sure that you don’t lose the deal.

"If you’re relying on £80 or £90m coming out of the Bale deal because you’ve spent the money, then you need the deal to go through, don’t you?

"But Tottenham are financially very sound and solid. There have been deals in the past where I walked into a club that had no cash and couldn’t pay the wage bill. You’re then negotiating deals where you want to play hardball, to get the best price, but if the deal doesn’t go through you know you can’t pay the wage bill.

"Now that becomes stressful. There are plenty of football clubs in the lower divisions where that does happen regularly. They need to sell just to stay alive, and that’s pressure."

As for accusations that Spurs are still, essentially, a selling club, then Ridsdale is sceptical of the criticism.

In fact, he says, the Bale deal could represent good business both on and off the field.

"Every club is a selling club, the only question is what you do with the money. You have to assume that if you bring four or five players in you will be stronger than just relying on one very good player.

"That player could be injured, suspended, or lose form. The concept of selling one very good player and bringing in half a dozen good ones seems very sound as a business practice. "