Summary:

As the dust settles on 2011′s biggest deal-that-never-was, it’s worth taking a closer look at the exit payout that makes Tiger Woods $100 mi…

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As the dust settles on 2011′s biggest deal-that-never-was, it’s worth taking a closer look at the exit payout that makes Tiger Woods $100 million divorce look cheap by comparison.

Let’s begin with the actual $4 billion, the “biggest break up fee ever” that AT&T (NYSE: T) will have to pay to the parent of T-Mobile, Deutsche Telekom (NYSE: DT), due to the failure of the would-be merger:

To put the number in perspective, consider that the $3 billion cash portion of the payout is equal to:

If we also include the $1 billion in spectrum assets that AT&T must hand over, the break-up fee is almost equal to:

Another remarkable feature about the pay-out is that, unlike Tiger Woods, neither partner really did anything wrong. According to Christopher Flanagan, a corporate tax law specialist, break-up fees are typically included in negotiation contracts to ensure one side doesn’t walk away leaving the other high and dry. In this case, the deal came apart because of the government — not because AT&T ran off with some other phone company. Yet AT&T is still paying full alimony.

But then there is the question of how much AT&T will actually pay out. The company’s CEO reportedly tried to downplay the massive charge with investors by saying that it would be “fully tax deductible.” UBS analysts who crunched the numbers estimated the total cash-hit would be between $1.5 – $1.8 billion.

Flanagan said the flopped deal is indeed tax-deductible and that the UBS amounts are likely correct. He said this would mean the overall deduction for the $4 billion payout would be $1.2 – $1.5 billion, and that assessing the write-down value of the assets is harder to calculate than it is with cash.

As for those assets, the NYT’s Dealbook today reported that Deutsche Telekom today placed the value of the spectrum at $3 billion in market value, meaning the actual value of the payout may be $6 billion.

Yuck. Shareholders better hope AT&T starts choosing cheaper dates.

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