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*FFP is there to allow clubs to grow naturally and stop rich business men buying lower league clubs, spending £1bn on their team and getting them promoted to the premier league. It is also to stop things like Wimbledon happening again, as well as Portsmouth and a few others.
We basically have to balance our books - as a club we need to cover our outgoings with our incoming. Outgoings include player transfers, wages and general costs of running the club. IMPORTANT: Stadium investment, training ground investment, youth system and women's football is NOT included in FFP calculations. That will be important later.
"What is stopping Tony or the Mittals sponsoring the clubs for £100m" - the rules are stopping it. In basic terms, if our owners want to use their companies (or any company they have a direct connection with) to sponsor us, it has to be in line with a normal sponsorship deal for a club our size at our level. ANY sponsorship deal that involves any of our owners WILL be investigated to make sure it is fair and reflects the "fair market value" for that kind of deal. Basically, we can't have a shirt sponsor that is 10x that of other clubs in the league.
ALSO, any sponsorship or money injected into the club CANNOT amount to more than 30% of our overall earnings, so if we got an AirAsia sponsorship again at say £1m, we would need to be making at least £2.5m from other sources, otherwise we breach FFP.
"How can Wolves etc spend and we can't" - the way FFP is calculated is based on your usual and potential income balancing it. So you can spend millions as long as that is balanced out soon. According to the rules, a club can be up to €30m in debt and still be within the rules of FFP as long as that is balanced out later. They are basically gambling that they will get promoted, and they need to, otherwise they are screwed.
As many will know, we are already in quite a bit of debt, so any sizeable purchase of a player would push us over our FFP limit again.
And just so people are clear, the punishments for FFP range from warnings to complete banishment from the league. The next punishment down from a fine is points deductions.
Remember not too long ago all those teams starting the season on -10 points?
In summary, our lack of spending in this transfer market is directly linked back to our old players that we brought in on stupid contract deals and long wage packages. Only this year have we managed to clear the cast majority of those*.
How do Man Shiteh and PSG flout these rules then? They are quite obviously spending way beyond their income levels thanks to their gazillionaire owner....
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