Nottingham Forest have splurged on transfers like no other promoted team has ever splurged in the history of the Premier League.
That is doubtlessly exciting for the supporters, who are delighted to see the manager and the team backed so much by the club's owner, Evangelos Marinakis. But it has also raised concerns about the club's ability to meet Financial Fair Play (FFP) requirements.
Premier League clubs are permitted to lose £105 million over a three-year accounting period. Forest have spent well in excess of that in the current summer transfer window alone.
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Steve Cooper has welcomed 16 new faces through the door at the City Ground, 15 of them on permanent deals. The total cost in transfer fees is believed to be just under £150m with even more deals on the table before deadline day on Thursday, 1 September.
It raises a couple of questions, namely how the club can afford to spend so much money on transfers and how can they fall under that FFP limit at the same time?
Kieran Maguire, football finance expert and lecturer at the University of Liverpool, has explained why their massive spending may not be as big a concern as many think. He points out that Forest had significant room on the wage bill after a number of players' contracts expired and loan players return to their parent clubs.
More pertinent, though, is the amortisation cost of the deals they have done. Amortisation refers to the cost of a player spread over the time of their contract, so a footballer that arrives for a transfer fee of £3m on a three-year contract costs £1m per year in the club's accounts.
Maguire also pointed out that that the money Forest have spent this summer is not necessarily all that much greater than the amounts spent by promoted in recent years, such as Aston Villa, Leeds United and Fulham.
"Where they are getting the money from, is two sources," Maguire explained on the Price of Football podcast. "First of all, the club owner, who is a Greek shipping magnate, has been very generous.
"Nottingham Forest have lost a lot of money whilst being in the Championship. He has underwritten those losses.
"When the club was promoted they had quite a few players out of contract and they also had quite a few loan players, so they were undercooked. They did not have a big enough squad, so there was room to substantially increase the wage budget.
"They've been able to pick up the slack because players have returned to their host clubs and quite a few contracts have not been renewed.
"Secondly, when we take a look at player recruitment from a financial point of view, you look at the total cost of employing a player over the course of the season it consists of two things: player wages and the amortisation fee.
"People might be wondering 'why is Jesse Lingard on a one-year contract earning more than £100,000 a week?' Well, that comes to about £6m a year total cost to Forest. They've not had to pay a transfer fee. So £6m in total for a player is actually pretty low.
"If you pay £30m for a player on a four-year contract, you've instantly got an amortisation fee of £7.5m per year and that's before you pay him a dime in wages. I think the investment has been an interesting one."
"I looked at other clubs who have been promoted in recent years. Look at Leeds, they spent £100m when they came up. If you take a look at Aston Villa, they spent over a £100m. Fulham famously spent over a £100m and were relegated.
"What we are seeing with Forest is not unique. I think what they have done is spread the cost of those purchases over a much wider range of players.
"Most of them were in that £7-15m bracket, until the Morgan Gibbs-White deal. But from what I've read, it's £25m plus up to £17m in add-ons and I think some of them are quite challenging to achieve. So, the amortisation cost, to which they are committed, is £5m a year.
"Yes, they have spent money, (but) they haven't necessarily spent a lot more money than some of their peer group who have been promoted in recent years. And if they are successful in retaining their Premier League status, that will be deemed to be money well spent."
Have Nottingham Forest spent their money well? Have your say in the comments!
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