Big month ahead on and off pitch as Nuno and Reds ‘hope for the best’
SAYS BOSS, AS FOREST LOOK TO PULL THEMSELVES AWAY FROM TROUBLE - BUT SWEAT ON PSR CHARGE DECISION
MARCH is a big month on and off the pitch in Nottingham Forest’s battle to retain their Premier League status.
Nuno Espirito Santo’s side have important upcoming fixtures as they look to climb the table. But the impact of being charged with breaching Profitability and Sustainability Rules (PSR) remains a great unknown for the club.
The Reds began their defence against the charge levelled against them when they faced an independent commission last week. With that in mind, we take a look at the situation so far.
WHAT HAPPENED LAST WEEK?
Forest faced a three-person independent commission on March 7 and 8 as they began their defence against the charge. The Reds are being dealt with by a separate independent commission to the one which acted in the case against Everton earlier this season.
WHAT HAPPENED WITH EVERTON?
The Toffees had previously been docked 10 points for a PSR breach. They appealed that verdict and their penalty was reduced from 10 points to six last month, although they are still facing a second charge.
After the revised sanction was confirmed, Everton said in a statement: “We are satisfied our appeal has resulted in a reduction in the points sanction. We understand the appeal board considered the 10-point deduction originally imposed to be inappropriate when assessed against the available benchmarks of which the club made the commission aware, including the position under the relevant EFL regulations, and the ninepoint deduction that is imposed under the Premier League’s own rules in the event of insolvency.
“The club is also particularly pleased with the appeal board’s decision to overturn the original commission’s finding the club failed to act in utmost good faith. That decision, along with reducing the points deduction, was an incredibly important point of principle for the club on appeal. The club, therefore, feels vindicated in pursuing its appeal.”
WHAT HAVE THE REDS BEEN CHARGED WITH?
On January 15, Forest were charged with breaching Premier League Profitability and Sustainability rules. On the same day, Everton were charged for a second time.
Financial regulations state Premier League clubs are only allowed to make a maximum loss of £105 million across a rolling three-year period, or £35m each season. For promoted teams that is reduced, meaning the Reds have been restricted to losses of £61m for the last three campaigns £13m for the two seasons in the
Championship prior to promotion, plus £35m last season. The extent to which the club have breached the limit is not yet known.
At the time, a Forest statement said: “The club intends to continue to cooperate fully with the Premier League on this matter and are confident of a speedy and fair resolution.”
The Premier League said: “Everton FC and Nottingham Forest FC have each confirmed to the Premier League they are in breach of the League’s Profitability and Sustainability Rules (PSR). This is as a result of sustaining losses above the permitted thresholds for the assessment period ending Season 2022/23.
“In accordance with Premier League Rules, both cases have now been referred to the chair of the Judicial Panel, who will appoint separate Commissions to determine the appropriate sanction. Commissions are independent of the Premier League and member clubs. The proceedings are heard in private with the Commissions’ final decisions made public on the Premier League’s website. The League will make no further comment until that time.”
WHAT HAPPENS NEXT?
The club and the Premier League will be able to appeal the outcome of the hearing. Premier League rules state any appeals process should “conclude no later than and if possible some time before 24 May” – five days after the final match day of the current season. Any points deductions or sanctions must be applied this season.
WHAT HAS BEEN SAID?
Nuno has made clear his focus is on matters on the pitch. He is keen for his players to concentrate on what they are in control of - picking up points.
“We are dealing with it in the right way. We try to ignore it, respect the decision and then deal with it,” he has said. “We have to focus on things that we can control. As a squad that means our game preparation, the matches, and health and fitness of the players. This is what we can control and then we hope for the best.”
Football finance expert Kieran Maguire believes the Reds have been given a “raw deal” over Financial Fair Play. He suggested the club could be in danger of breaching the limits before the charge was levied.
“In my view Forest have got a fairly raw deal in respect of Financial Fair Play,” Maguire has said. “They were promoted with a squad that cost £12m up against billion-pound-costing squads. They only have a £61m allowable loss for FFP pur poses compared to £105m for the established clubs of the Premier League.
“But having said that it does look as though they’ve exceeded the limits. They were pretty close to them in the EFL.
“They signed an awful lot of players for big fees, and others on smaller fees but with big wages. So certainly when I did my sums - I called them out a couple of weeks before the announcement was made as being very high risk - and it’s come as no surprise.”
Former Forest chief executive Paul Faulkner voted against implementing PSR when he held the same role at Aston Villa. Faulkner believes the process needs to be overhauled by the Premier League.
“There is an amnesty needed. The authorities need to stop and ask themselves how they can do things in the right way. Is there an approach that will benefit the game?” Faulkner told The Athletic. “You just wait for things to be made more simple.
“They have cocked this up and they need to accept that and deal with it. There should not be any punishment because it is such a mess.
There should be no punishment for Everton or Forest, they should tear up the rules and start again next summer
WE CAN ONLY FOCUS ON THINGS WE CAN CONTROL,
AND THREAT OF POINTS BEING DEDUCTED
and find a way of doing things that is much, much clearer, where there is a structure in place.
“They are probably hoping (fellow strugglers) Luton do not win many more games, so all of this just becomes academic – there is a fundamental problem to be solved here, in how PSR is regulated in the first place.”
MITIGATING FACTORS
A key part of Forest’s defence will revolve around the club-record sale of Brennan Johnson to Tottenham Hotspur for £47.5m on transfer deadline day last summer. The sale of the Nigel Doughty Academy graduate fell outside of the accounting timeframe assessed by the Premier League. However, the Reds argue that by waiting until late in the window, they got a bigger transfer fee for Johnson, having rejected smaller offers made by Brentford earlier in the summer.
Football finance journalist Dave Powell explained: “The sale was important for Forest in terms of what they were able to spend. As a graduate of Forest’s academy, the sale of Johnson was one that was pure profit, with that £47.5m able to be booked straightaway.
“The issue for Forest is the deal to sell Johnson happened outside the allotted time period that is assessed, up to June 30. However, with Forest having rejected bids of around £30m for his services during the period of assessment, there is the hope any issue over the deal could be argued as requiring some leeway.
“It is claimed Forest were in dialogue with the Premier League over the matter during the period, but in terms of how the League would view the deal should they come under scrutiny remains to be seen, with Everton having also been in regular dialogue with the Premier League over transfer business and cost management before they were hit with a charge last year.”
The club brought in leading sports lawyer Nick De Marco to help argue their case. A KC with Blackstone Chambers in London, he has an established record dealing with football, especially Financial Fair Play, and represented Reds defender Harry Toffolo when charged with breaching FA betting rules.
THE EVERTON PRECEDENT
Everton were hit with a 10-point deduction in November for breaching financial regulations with a £19.5m overspend. They lodged an appeal and this has been cut to six.
Football finance expert Dr Dan Plumley has said it is difficult to compare the situations of Everton and Forest. He explained: “If we start to get into comparisons of the Everton verdict and Forest case, it does become problematic. The only way you put that to bed is you have a note in the regulations that says it (points deduction) is based on the financial number (over the limit).
“Because that’s not been in there, we’re now looking at individual cases and it gets really tricky. People will look to the Everton verdict and say ‘so what for Forest,’ but it’s much more nuanced than that ....
“It does very much feel the Forest case is more simply about the amount of player transfers and associated costs, whereas with Everton there’s issues around the way the stadium has been financed. It’ll hinge on the Brennan Johnson timing and how the Premier League and any potential independent commission on appeal views that.”
Dave Powell, chief business of football writer for Reach, believes Forest cannot read too much into Everton’s appeal. He said: “Having been hit with a rather draconian 10-point penalty for breaching the Premier League’s profit and sustainability regulations, reducing the punishment to six points following appeal represents something of a win for Everton.
“The reduction in severity will also be of significant interest to other clubs, notably Nottingham Forest, charged with a PSR breach for 2022/23, as well as clubs skirting the PSR regulations at present and who may have been concerned about just how strong a punishment they would have faced.
“It is hard to read too much into the six-point deduction and what happens with the PSR breach for which Everton were charged with for 2022/23, with the club facing another hearing.
“Nottingham Forest chiefs, also, cannot read too much into the decision as a pre-cursor as to their own fate. The cases don’t have uniform punishments, hence the reason why the rather arbitrary 10-point deduction was so fiercely contested.”