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I know there are other stories you’d rather read about, but I think the Gareth Bale Saga and Spurs chairman Daniel Levy’s refusal to sell the club’s star Welsh winger provides an illustrative example of how complex club finances don’t always make it into broadsheet coverage.

Most of us see the transfer market this way: X club wants to buy a player under contract from Y club, so they propose a transfer fee. Y club can either choose to sell on the first bid, holdout for a higher price, or refuse the offer. Should they sell, X club gets the player they want and the Y club gets money they can use to buy other players in order to help the club win. The system works!

This of course leaves out some fairly important details, as we’ll see with the Spurs’ situation. When the press began reporting the numbers purportedly on “unofficial” offer from Real Madrid for Bale—the actual figure is £85m and does not include any player swaps—many pointed out that Bale was almost certainly at peak value (overvalued, in fact) and that therefore Levy should sell immediately. Others believed it would only be a matter of time before Levy would sell, and was only proving his worth as the highest paid chairman in the Premier League.

It may come to pass that Bale might leave White Hart Lane for the Bernebeu for that figure or one even higher, but there is, believe it or not, a plausible financial explanation for Levy’s refusal to accept a wildly-inflated world record fee for the player.

For one, we don’t know yet that the fee will be a lump sum or amortized over the course of Bale’s Real Madrid contract, although there have been rumours it may be the former. Most player transfers are paid in yearly installments over the course of their contract, and even with Real Madrid’s considerable windfall from TV rights in La Liga and generous commercial revenue, it’s difficult to see Perez dropping that kind of money in a single go. But if I were Levy, I would insist on it.

Let’s consider Spurs’ financial situation. The club is not bankrolled by a wealthy benefactor, but has instead taken careful advantage of their location in North London to maximize gate sales at WHL while at the same time being careful to cap player wages. That isn’t enough to compete however with their rivals at Arsenal and United, so the club is in the midst of a vital stadium construction plan in the Northumberland Development Project. It’s still a long way off from completion, so in the meantime the club needs to generate revenue wherever it can to continue to pay for it whilst competing in the Premier League.

A look at the Spurs’ figures, compiled by the great Swiss Ramble, from the 2011-12 Premier League season gives us a good idea of the importance of the Champions League, for example:

At the moment Spurs are investing almost all their surplus cash in fixed assets, having spent £42 million last season on plans for a new stadium (Northumberland Development Project) and the new training centre in Enfield. This was more than any other Premier League club spent on infrastructure in 2011/12. In addition, they paid £4.5 million interest, as debt climbed to £86 million, made up of bank loans and securitisation funds.

After the significant investment off the pitch Tottenham’s cash flow before financing was a negative £13 million, partly financed by £8 million additional bank loans, leading to negative net cash flow of £5 million.

As SR goes on to note, the difference between qualification for the Europa League instead of the Champions League cost Spurs £31 million in revenue that season. While Spurs are a very well-coached team under Andre Villas-Boas, the fact is Bale scored 21 of the club’s 66 Premier League goals last season, helping to put the club within a point of the final CL spot. Moreover, Bale also represents a vital asset in shoring up Spurs’ commercial revenue as well, which in 2011-12 was a relatively modest £18 million and likely grew along with Bale’s improved stature.

Tally up those costs and the ability of Spurs to attract a similar player and it’s easy to see Bale’s potential future value to the club exceeding even Real Madrid’s record offer. Even with that considerable amount on the table, it’s very difficult to see Spurs acquiring a player of Bale’s ability within the final month of the transfer window. There are moments when players become truly priceless, and this may be one of them…