Sorry to bring bad news, but i have just encountered this exact same bug in my FM 12 handheld game.
For the last nine years or so I have taken Basingstoke to the top of the Premier League and European Champions. However, after Roberto Mancini was sacked at Man Utd, the lure of my boyhood dream club was too much to resist. A retired Fergie would have been turning in his grave to see them so far down the league. So i left the Prem/European Champions to restore the dynasty at Old Trafford.
Safe to say Mancini left a mess and i'm quickly going about improving the squad. I've just sold 3 players and wanted to invest in this striker but i keep being met with the same 'they do not have enough space in their squad for the transfer to go through' message. It is a part exchance so its one player out one player in, but equally i have just sold three players from my existing squad so there must be room!
Help.
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