Essential reading is this very good summary by the Sky News reporter:
www.skysports.com
These very detailed notes and explanations show we are dealing with very high level planning and strategy by the elite of European football, and fully backed by the Cartel of clubs who will do anything to preserve their competitive advantage.
A cap of 70% for wages, transfer payments and agents' fees, as far as I can see, is the most ruthless way legally possible to prevent and disrupt any attempt by an ambitious club to assemble and retain a squad capable of making a challenge to the Cartel. The evil genius of the plan is to institutionalise a huge differential in what players are paid, and in how much can be used in making transfers.
(Whether or not these highly restrictive regulations are in fact legal may well be tested in the course of the next two years).
In reality, this has always occurred to a lesser degree, particularly since the rise of Man.City demonstrated how a club with rich backers could undermine the pecking order. The previous iteration of FFP was primarily concerned in closing that particular door. But this is the full Monty. Welcome to the Super League.
Wolves, of course, are one of the clubs targetted by these moves, with Fosun having enough clout to make use of every last possibility under the existing framework, indeed one of the principal targets.
However, the period of transition that has been allowed by UEFA over the next two seasons, allows for a last round of investment prior to the full implemenation of the monopolistic regulations. And this may well go a long way to explaining why Fosun have chose to act so dramatically in the transfer market at this point.
For this season, Wolves are allowed to spend up to 90% of turnover on wages and transfers, (with an 80% limit applied next season).
In addition, permissible losses have been doubled over any 3 year period to 60m euros, or £50million.
If Wolves have made a profit of say £40 million over the last two seasons, as a rough estimate, they would then have a pool of £90 million over and above this season's turnover to invest this season, coupled with the allowance of being allowed to increase the wage and transfer bill up to 90% of turnover. This represents a serious room to manoeuvre, which may not be available again.
(There remains a contradiction in the rules, which has yet to be clarified, that is to say how can a club make use of the losses allowance or of previous years' profits without breaking the 90% rule)
In other words, this season and next are probably Fosun's best chance to to make a run at the top 6, in terms of squad strength.
Fosun do have a back up insurance policy, it should be noted. Their transfer strategy of the last few years has left them with a astoundingly large amount of players with a tremendous asset value: ie younger players signed on longterm contracts who are amongst the best of their age group. Think Kilman, RAN, Collins, Neves, Nunes if he signs, MGW, Fabio, Neto, Guedes, all potentially worth major sums. Wolves have cleverly positioned themselves financially as being able to sell one or two players each year to renew the squad, when the full scope of the restrictions come into force. Its far from a solution, but at least gives some chance of challenging, even under these shameful anti-competitive measures.
UEFA's new financial sustainability regulations to replace FFP: All you need to know
What are UEFAS new financial sustainability rules? What are the punishments for breaking the rules? When do the new rules start? Is everyone in favour of the new rules? Heres everything you need to know....
These very detailed notes and explanations show we are dealing with very high level planning and strategy by the elite of European football, and fully backed by the Cartel of clubs who will do anything to preserve their competitive advantage.
A cap of 70% for wages, transfer payments and agents' fees, as far as I can see, is the most ruthless way legally possible to prevent and disrupt any attempt by an ambitious club to assemble and retain a squad capable of making a challenge to the Cartel. The evil genius of the plan is to institutionalise a huge differential in what players are paid, and in how much can be used in making transfers.
(Whether or not these highly restrictive regulations are in fact legal may well be tested in the course of the next two years).
In reality, this has always occurred to a lesser degree, particularly since the rise of Man.City demonstrated how a club with rich backers could undermine the pecking order. The previous iteration of FFP was primarily concerned in closing that particular door. But this is the full Monty. Welcome to the Super League.
Wolves, of course, are one of the clubs targetted by these moves, with Fosun having enough clout to make use of every last possibility under the existing framework, indeed one of the principal targets.
However, the period of transition that has been allowed by UEFA over the next two seasons, allows for a last round of investment prior to the full implemenation of the monopolistic regulations. And this may well go a long way to explaining why Fosun have chose to act so dramatically in the transfer market at this point.
For this season, Wolves are allowed to spend up to 90% of turnover on wages and transfers, (with an 80% limit applied next season).
In addition, permissible losses have been doubled over any 3 year period to 60m euros, or £50million.
If Wolves have made a profit of say £40 million over the last two seasons, as a rough estimate, they would then have a pool of £90 million over and above this season's turnover to invest this season, coupled with the allowance of being allowed to increase the wage and transfer bill up to 90% of turnover. This represents a serious room to manoeuvre, which may not be available again.
(There remains a contradiction in the rules, which has yet to be clarified, that is to say how can a club make use of the losses allowance or of previous years' profits without breaking the 90% rule)
In other words, this season and next are probably Fosun's best chance to to make a run at the top 6, in terms of squad strength.
Fosun do have a back up insurance policy, it should be noted. Their transfer strategy of the last few years has left them with a astoundingly large amount of players with a tremendous asset value: ie younger players signed on longterm contracts who are amongst the best of their age group. Think Kilman, RAN, Collins, Neves, Nunes if he signs, MGW, Fabio, Neto, Guedes, all potentially worth major sums. Wolves have cleverly positioned themselves financially as being able to sell one or two players each year to renew the squad, when the full scope of the restrictions come into force. Its far from a solution, but at least gives some chance of challenging, even under these shameful anti-competitive measures.
