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Cat 1 increases the budget to about £2.5m from £1M. All coaches must be Full Time and hold a UEFA A or a Pro licence whereas Cat2 only had to be some coaches. Also gives us priority access to PL and FA funding. Also think we are eligible to play in a higher junior league.
About 40- 50points would see them relegated so the PL could give them 500point deduction and it would make no difference other than PL bragging 'record punishment'. City's problem will be that it is unlikely that contracts have a relegation clause.
All their promotions were won by buying players from the league above but they can't afford to buy Prem players. Sure Parkinson would have been sacked ages ago but owners are concerned what effect this might have on their 'Mr Nice Guy' image.