How to negotiate - Daniel Levy (Soldado) style
Good evening folks.
The Soldado affair has dragged on with fans after every scrap of Tottenham news. The series of articles I have produced for you have taken a different angle than the usual blogs, I have sought the views of the local press (who know everything, as you'll know if you have been reading these articles) and brough you what we have been up to as they tell it.
I hope you have found them a refreashing change from the norm and almost with regret I bring you, what is probably the last instalment, the Levy/Salvo negotiations.
Both parties can come out of this saga saying they got what they wanted but in truth there was only one winner, there was only ever going to be one winner.
Tottenham's tough guy negotiator Daniel Levy had his price and his top price, he'd pay the €30 million (£25.76m) Valencia wanted but, he would only pay it in the way he wanted.
Valencia president Amadeo Salvo though he was tough, I'll make him pay the way I want. The poor deluded man, this was Daniel Levy you were dealing with, a mere apprentice has got no chance.
So how did Levy out manouver the young upstart.
Well it wasn't that difficult in reality. Remember Valencia were in a financial mess if this deal didn't go through. They needed €14 million (£12.03m) for tax purposes by 3 August plus €3 million (2.62m) to buy a replacement, Helder Postiga from Real Zaragoza, so ideally Salvo wanted €17 million (£14.84m) by Friday 2 August.
Now our bid to meet their asking price was €26 million (£22.44m) + €4 million (3.45m) in easily achievable extras over the term of Soldado's contract, which included the €6 million (£5.18m) agents fees for Salvo's arch enemy, Alberto Toldrá.
Levy is giving the guy what he wants but he doesn't say yes, he makes doubting noises, says he'll ask his board and that he wants it in two payments, 2 x 15 or a 20 + 10.
Baldini informs Daniel Levy, so what does Levy do, he has Salvo back peddling faster in panic than you or I can run forwards.
Under Spanish tax law if you meet a release clause, in this case €30 million (£25.76m), you pay no tax and no VAT.
Under our initial offer Valencia would pay Toldra his €6 million (£5.18m) agents fee and pocket €24 million (£20.71m). That would leave Valencia €21 million (£18.33m) in profit having bought a replacement for €3 million (£2.62m) and reduced their wage bill by €0.5 million (£436,444).
Valencia get the €14 million for tax, balance their books and come out €7 million (£6.11m) in profit. Good business.
Levy wasn't going to wait for the following days board meeting so that night he changed our offer. You want to play tough with me, Daniel Levy, OK try this for size then junior, we'll pay you €24 million (£20.71m) + €2 million (1.73m) extras.
That would now mean a VAT bill of 21% and a tax bill of 30% for Valencia.
I'll use the whole amount (€26m) for some rough calculations, you accountants can figure out the exact amounts. The revised offer meant a VAT bill of €5.46 million (£4.71m) and tax bill of €6.16 million (£5.31m) after taking off the VAT, plus €6 million (£5.18m) agents fees to pay.
€26 less €5.46 less €6.16 less €6 = €8.38 million (£7.23m).
Now take off €3 million (£2.62m) for Postiga and you are left with €5.38 million (£4.70m).
Valencia needed €14 million (£12.03m) by 3 August to solve a tax crisis and balance their books remember, because if they don't they could be barred from European competition by the Spanish FA. They would be up the creek without a paddle if this deal didn't go through.
You can sort your tax, balance your books, pay for a striker and be €7 million (£6.11m) in profit or you can be €8.62 million (£7.52m) short.
It's your choice Mr Salvo, don't let me hurry you though.
Cue Salvo backtracking fast. Yes Mr Levy we'll get a deal done Mr Levy, right away Mr Levy.
Suddenly he wants to negotiate. His public bravado is just that, a show to save face. We go back to the original agreement and discuss how it is to be paid and this is how it ended.
The agreement reached is that Spurs pay an initial fee of €12 million (£10.47m) and €6 million (£5.31m) a year for 3 years, not the two payments the young pup was insisting upon.
Salvo can still claim he has got his €30 million (£25.76m) and save face but as I've said before, he wasn't going to get it how he wanted it, Levy would pay the way Levy wanted to pay.
Daniel Levy reputation intack, sees off another contender and walks off into the sunset, with a smile.
Don't mess with our Daniel.
The Soldado affair has dragged on with fans after every scrap of Tottenham news. The series of articles I have produced for you have taken a different angle than the usual blogs, I have sought the views of the local press (who know everything, as you'll know if you have been reading these articles) and brough you what we have been up to as they tell it.
I hope you have found them a refreashing change from the norm and almost with regret I bring you, what is probably the last instalment, the Levy/Salvo negotiations.
Both parties can come out of this saga saying they got what they wanted but in truth there was only one winner, there was only ever going to be one winner.
Tottenham's tough guy negotiator Daniel Levy had his price and his top price, he'd pay the €30 million (£25.76m) Valencia wanted but, he would only pay it in the way he wanted.
Valencia president Amadeo Salvo though he was tough, I'll make him pay the way I want. The poor deluded man, this was Daniel Levy you were dealing with, a mere apprentice has got no chance.
So how did Levy out manouver the young upstart.Well it wasn't that difficult in reality. Remember Valencia were in a financial mess if this deal didn't go through. They needed €14 million (£12.03m) for tax purposes by 3 August plus €3 million (2.62m) to buy a replacement, Helder Postiga from Real Zaragoza, so ideally Salvo wanted €17 million (£14.84m) by Friday 2 August.
Now our bid to meet their asking price was €26 million (£22.44m) + €4 million (3.45m) in easily achievable extras over the term of Soldado's contract, which included the €6 million (£5.18m) agents fees for Salvo's arch enemy, Alberto Toldrá.
Levy is giving the guy what he wants but he doesn't say yes, he makes doubting noises, says he'll ask his board and that he wants it in two payments, 2 x 15 or a 20 + 10.
Baldini informs Daniel Levy, so what does Levy do, he has Salvo back peddling faster in panic than you or I can run forwards.
Under Spanish tax law if you meet a release clause, in this case €30 million (£25.76m), you pay no tax and no VAT.
Under our initial offer Valencia would pay Toldra his €6 million (£5.18m) agents fee and pocket €24 million (£20.71m). That would leave Valencia €21 million (£18.33m) in profit having bought a replacement for €3 million (£2.62m) and reduced their wage bill by €0.5 million (£436,444).
Valencia get the €14 million for tax, balance their books and come out €7 million (£6.11m) in profit. Good business.
Levy wasn't going to wait for the following days board meeting so that night he changed our offer. You want to play tough with me, Daniel Levy, OK try this for size then junior, we'll pay you €24 million (£20.71m) + €2 million (1.73m) extras.
That would now mean a VAT bill of 21% and a tax bill of 30% for Valencia.
I'll use the whole amount (€26m) for some rough calculations, you accountants can figure out the exact amounts. The revised offer meant a VAT bill of €5.46 million (£4.71m) and tax bill of €6.16 million (£5.31m) after taking off the VAT, plus €6 million (£5.18m) agents fees to pay.
€26 less €5.46 less €6.16 less €6 = €8.38 million (£7.23m).
Now take off €3 million (£2.62m) for Postiga and you are left with €5.38 million (£4.70m).
Valencia needed €14 million (£12.03m) by 3 August to solve a tax crisis and balance their books remember, because if they don't they could be barred from European competition by the Spanish FA. They would be up the creek without a paddle if this deal didn't go through.
You can sort your tax, balance your books, pay for a striker and be €7 million (£6.11m) in profit or you can be €8.62 million (£7.52m) short.
It's your choice Mr Salvo, don't let me hurry you though.
Cue Salvo backtracking fast. Yes Mr Levy we'll get a deal done Mr Levy, right away Mr Levy.
Suddenly he wants to negotiate. His public bravado is just that, a show to save face. We go back to the original agreement and discuss how it is to be paid and this is how it ended.
The agreement reached is that Spurs pay an initial fee of €12 million (£10.47m) and €6 million (£5.31m) a year for 3 years, not the two payments the young pup was insisting upon.
Salvo can still claim he has got his €30 million (£25.76m) and save face but as I've said before, he wasn't going to get it how he wanted it, Levy would pay the way Levy wanted to pay.
Daniel Levy reputation intack, sees off another contender and walks off into the sunset, with a smile.
Don't mess with our Daniel.
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