And the Winner of Friday Night’s Rollover Lottery Draw is..


Ok not really but let's pretend for a moment you have scooped Friday nights big rollover prize and are an overnight multi millionaire Charlton fan with money to burn, who is crazy enough to want to invest it in a football club.

You've managed to buy the club but still have vast pile of cash left and want to get us into the Premiership as quickly as possible, staying up there is a for a different conversation..

You are going to need a fair bit of investment to get the playing squad in shape, probably a considerable amount of your recently acquired wedge to get us up there. We do have some decent players and a burgeoning academy, but that’s not enough to ensure success - the academy probably isn't ready yet to fill the gaps in the squad.

Now here's the bad news for you, and good news for your new bank manager. Those lovely people in Football have invented something called Financial Fair Play (FFP) that limits club losses year on year to bring about a 'break even' situation in a few years.

The new rules will limit how much of your own cash you can spend on your Labour of Love

Although academy expenditure, promotion bonuses, and depreciation of a £1m a year on the Valley are exempt.

Making it a simple as possible: The FFP rules stipulate that CAFC can lose £8M (which includes a loss of £3m and equity of £5m) this coming season. CAFC have lost £7M per season, but taking into account the exemptions that figure comes down to about £4M. So that means you can only spend £4m extra this year on the squad - on wages and  transfer fees.

So what to do with £4M

First of all you should really get your talented young manager on board with a new deal and promotion bonus, then you have just a few million left which might equate to just five top players when you think top strikers might want £10k + per week or £500K per year. Yes 1/2M per year but that might come down as fewer clubs can afford that? Add a couple of million in wages to strengthen central midfield and defence and there is not much left for transfer fees.

Things change during the season so perhaps a couple of loan players and then there is the January window… Imagine CAFC are fourth just a few points off the top two so what to do? Rely on the squad or perhaps add one or two. Perhaps go shopping in eastern Europe for players?

Its's still a tidy sum, this year at least. But next year that will come down, eventually in 2015 to zero. Spending will need to be slashed if income cannot be increased somehow.

Can clubs bend the rules a little?

If a club got promoted and had exceeded the limits laid out, they'd get perhaps a couple of million in penalties – small change from the £120M of TV and parachute monies. But if promotion doesn’t happen then money will be tight and accounts have to be filed by December 1st 2014. Breaking the rules also leads to a freeze on registrations so no new players and no new contracts for existing squad nor academy players coming through - if you don’t find some creative extra sponsorship or sell a top player before we close the books on the season.

Perhaps a better plan is to work within a decent budget and increase the revenues but that might take a little longer? The loss limits reduce each year so any players whose contracts expire end 2014 need to do well – no guarantees that they will all get renewed. Perhaps some will be offered reduced terms or nothing at all so that costs come down while looking to increase revenues. It makes sense to run a tight ship and perhaps get some bargain players as other clubs really struggle to stay within the limits and have to let far more players go – clubs like Leicester and Forest, Ipswich and Boro who play good football but are paying out a fortune to do this.

Our little fantasy here is over, but even so its going to be an interesting few years for all clubs.