Tottenham rejected £40m for Modric!? Ridiculous for Chelsea to offer that; even more ridiculous for Tottenham to reject.
I think it's more pure stubbornness and fear of the ego taking a dent on Levy's part rather than genuinely sticking to his principles - Modric is probably worth half that, you don't know how much this summer will affect his form and his desire to play for the club (I'd imagine he's angrier with the chairman more than ever right now), and he'll probably want to go again in January. I suppose in the end the biggest fool of all was Modric, in signing that six-year deal and then trusting Levy to uphold that "gentleman's agreement".
Chelsea will still be the team to rival Manchester without Modric or any back-up to that deal like Moutinho (though loaning out Yossi would be completely absurd without replacing him), and I suppose the fact they've caused Tottenham such a hassle this summer will be some consolation, but that position is the obvious one they should've strengthened this window. They just have to hope now that Lampard gets back to some kind of form, or you could see another Torres-esque panic buy from them in January.