Interview: Gareth Bale's accountant talks transfers

FOOTBALL TRANSFERS are one of sport’s – and business’s – great oddities.

Lucrative, unreliable, unpredictable, frequently left until the last possible moment and undoubtedly a dependable source of stress, few would begrudge those organising the moves their roles.

Yet BSG Valentine founding partner Melvyn Gandz does not seem like a man under stress. Actually, he’s rather enthusiastic. As well he might be given that only weeks ago, he helped facilitate the biggest transfer in football history.

Gareth Bale (pictured) is now Real Madrid’s most valuable Galáctico after his £85.3m move from Tottenham Hotspur on 1 September – the day before transfer deadline day – eclipsed new team-mate Cristiano Ronaldo’s £80m deal from Manchester United in 2009.

The deal sees the 24-year-old Welshman reportedly earn £300,000 per week basic over the next six years, along with further monies derived from performance-related incentives, image rights and product endorsements.

The main task for Gandz, as far as he is concerned, is to ensure the players and athletes he acts for have all their tax concerns up-to-date, manage their investment rights, and above all else ensure that, come retirement, all their affairs are in order.

Stellar success

It’s a service line that forms a “significant” portion of the London-based firm’s £5m fee income, in part thanks to a relationship with sports agency Stellar stretching back close to 20 years. It’s an arrangement that has seen Gandz and fellow partner Nilesh Patel act for Premier League stars including Ashley Cole and Glen Johnson, along with Olympians such as Perry Shakes-Drayton.

Despite the complexities of his clients’ personal finances, Gandz assures Accountancy Age that the “principles in any transfer are the same”.

“What was complicated was that it was a transfer out of the UK,” explains Gandz, who has acted for Bale for seven years.

“The main thing is tax issues and dealing with Spanish professionals – lawyers and accountants. There’s always the language barrier, even though you have good translators with you.”

As far as the mechanics of managing the former Southampton man’s finances goes now, Gandz says he will oversee Bale’s affairs, although he will also employ a local accountant in Madrid to ensure he complies with Spanish obligations.

Bale’s move was a protracted one, and was arguably one the cards ever since he famously hit a scintillating hat-trick for Tottenham in a Champions League game against Italian giants Internazionale in October 2010, but activity began in earnest in May this year. Indeed, Spurs spent a huge portion of the summer signing no less than seven players in order to mitigate the impact of his departure, along with six other fringe players.

Gandz left for Spain late in August with Spanish lawyer Iñigo Landa hoping to complete the transaction, but as a result of hold-ups between the clubs, the pair, despite their best efforts, were waiting for “over a week” before the deal was concluded.

“It was only last-minute that everything was finalised”, says Gandz. “The agreement was reached as far as the player [Bale] was concerned, but other factors that affect a transfer are other player transfers. The transfer window is like a jigsaw puzzle, and when one player moves out another has to be put in place, and that doesn’t just affect Real Madrid and Spurs, it affects other clubs as well.”

A significant element of the deal involved arranging the treatment of Bale’s image rights – the use of the player’s name, likeness or other identifiable features; such has his famous love-heart goal celebration in advertising.

“As far as football and image rights are concerned, the double tax treaty between the UK and Spain [which prevents the same earnings being taxed in both countries] will come into play,” Gandz says. “Gareth is clearly an international athlete, and therefore there will be layers of complexity on image rights, and what takes a lot of time in structuring the transaction is ensuring all the local tax jurisdictions are dealt with correctly. Any income sourced in the UK will still be taxed in the UK.”

Lots to lose

Despite how incredibly well-rewarded footballers famously are, the list of players who have gone through bankruptcy is surprisingly long. Tottenham goalkeeper Brad Friedel, Fulham and ex-Liverpool defender John Arne Riise, former Chelsea and Newcastle player Celestine Babayaro, ex-Aston Villa midfielder Lee Hendrie and ex-Manchester United winger Keith Gillespie have all suffered deep financial troubles.

While Gandz is pleased to say he never acted for any of those unfortunate souls, it’s a real problem he’s keen to guard against.

“It’s fair to say sports stars are used to earning a lot of money when they’re young and can be far too extravagant.

“Many gear up too much in their investments and when they come to retire, if they can’t realise their investments then they have cashflow problems which ultimately can lead to bankruptcy.”

“Historically, there were a lot of financial advisers pushing overseas pensions structures,” he explains. “In our experience there were very few who entered them. The main areas that the Revenue’s been looking at are agents’ fees and image rights.”

Pre-nup preparation

Another – potentially incendiary – issue some fall foul of is failure to be ‘prudent’ in their personal lives, something Gandz notes has led to “very unfair settlements” in the past.

“All top-earning people, and particularly footballers, should have proper pre-nuptial or co-habitation agreements in place, so their other halves are financially secure if there’s a problem, but also so that the athlete themselves does not lose too much money,” he warns.

Those issues, though, will be far, far away from Gareth Bale’s mind, and after a goal-scoring debut, Gandz takes a moment to consider how far the Cardiff boy has come.

“From off the field as well as on the field, you could just tell there was something special,” he recalls.

“I met Gareth when he’d just signed for Spurs [from Southampton] and he was staying in a local hotel. He was a very young, shy boy, but very articulate at that age. He was absolutely focused on his sport and he had complete dedication to his football. Financially, though, he had acumen. He knew that if he was successful on the field, he’d be successful off the field.”

And so – for now at least – it has proved. All that’s left is for Bale to make his move to Real an on-the-pitch success.

Pictured above: Melvyn Gandz and Gareth Bale

BSG Valentine in numbers:
Offices: One, in Tavistock Square
Staff: 50, with 13 partners
Service lines: Sports, public companies, property, legal, audit,
Specialisms: Sports
Fee income: £5m
Miscellaneous: Also act for England stars Ashley Cole and Glen Johnson, as well as Olympian Perry Shakes-Drayton