NOTTINGHAM FOREST have been hit with a four-point deduction for breaching Profit and Sustainability Rules.
The sanction sees the club plummet into the relegation zone.
Forest were 17th with 25 points. But they will to fall to 18th on 21 points, one behind 17th-placed Luton.
Forest said they are “extremely disappointed” and “extremely dismayed” by the ruling.
They were charged in January for breaching the Premier League’s PSR rules in the 2022/23 campaign.
Under the Financial Fair Play regulations, clubs cannot lose more than £105million over three seasons.
This year is Forest’s second in the top-flight but they have not avoided punishment after being measured against both Prem and EFL regulations.
While in the Championship, clubs are not allowed to lose more than £61m-a-year and they were £34.5m above the threshold.
Since their promotion via the 2022 play-off final, they have splashed the cash on 42 players.
They have broke their transfer record three times for Taiwo Awoniyi, Morgan Gibbs-White and Ibrahim Sangare.
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In their case against the independent panel, Forest admitted the breach but have argued they only broke the rules for two months while filing their accounts between June 30 and September 1.
They had only received the first instalment of the £47.5m they are owed by Tottenham from the sale of Brennan Johnson in a deal completed on September 1.
Forest could’ve sold him to Brentford for £30m and complied with the regulations but held out for Spurs’ bigger bid.
The club issued a statement slamming the verdict, saying: “We were extremely dismayed by the tone and content of the Premier League’s submissions before the Commission.
“After months of engagement with the Premier League, and exceptional cooperation throughout, this was unexpected and has harmed the trust and confidence we had in the Premier League.”
They also claimed the verdict will lead to the “stagnation of the nation game” by restricting the transfer market.
Forest said: “Of wider concern for all aspirant clubs is the disturbing effect this decision will have on the operation of the player trading model.
“This is the only model by which clubs outside of the small group at the very top end of the Premier League can realistically advance up the football pyramid.
“The rationale of the commission is that clubs should only invest after they have realised a profit on their player development.
“This reasoning destroys mobility in the football pyramid and the effect of the decision will be to drastically reduce the room for manoeuvre for all such clubs, leading to the stagnation of our national game.”
Forest have two weeks to launch an appeal.
However, the Premier League have pencilled in May 24 as a backstop date for any appeal, which is after the season ends on May 19.
NOTTINGHAM FOREST have been deducted four points - but why? Can they appeal it? And could Everton be hit with more sanctions? Martin Lipton explains...
So Forest have been deducted four points – but why?
Forest admitted on December 31 when they filed their accounts for last season that they had breached the allowed Profitability and Sustainability limit. They finally admitted a breach of £34.536m
What is the limit?
Clubs who are in the Prem for three seasons are limited to “allowable losses” – after calculations including the “amortisation” of transfer fees, stadium building and Covid-related expenditure are taken out – of £105m over three seasons. As Forest only had one top flight campaign, their limit was £61m
Isn’t that unfair?
Forest spent those two years in the EFL, where clubs are restricted to losses of £13m. They were working under those regulations.
What did Forest admit?
Forest told the Prem on December 31 they were £25.8m over the limit, blaming it on an anticipated 12th-placed finish, £20m in promotion bonuses and a claim of more than £11m in Covid losses.
So how come the final figure?
Prem chiefs capped Covid-related losses at £2.5m
And what was the Brenn Johnson argument?
Forest said that because they had sold Johnson to Spurs for £47.5m on deadline day last summer that it was a “near miss” and “golden mitigation” – if they had sold him before the end of the financial year on June 30 they would have been fine.
Why was that rejected?
Forest revealed they had turned down an offer of £42.9m from Atletico Madrid on June 30 and then three offers – ranging from £32m to £40m – from Brentford between July 21 and August 28 before the Spurs deal went through. Johnson played in Forest’s first three Prem games of the season – including the win over Sheffield United – and so they gained a clear “sporting advantage”.
What did the Prem argue?
Prem financial chiefs warned Forest on June 6 that Johnson needed to be sold by the end of the month and that advice was ignored. This was a“significant breach” of the regulations and lawyers argued that the starting point should be an eight point deduction.
Forest disagreed, presumably?
Indeed so. Nick De Marco KC suggested that Forest should not have any points deducted at all. That the case was far less serious than Everton’s – they were initially deducted 10 points,m reduced to six on appeal – and that if points were lost the punishment should be suspended.
And the Commission ruled…?
That the significant breach deserved a six point deduction, with two points reduced for Forest’s guilty pleas and cooperation ensured the hearing took place five weeks ahead of the latest date.
What next – can Forest appeal?
Yes. They have seven days to lodge an appeal and that hearing would likely be scheduled for mid-April, allowing a final decision by the start of May, well ahead of the “backstop date” of May 24. Forest could then ask for an “Arbitration hearing” but would have to prove a “breach of natural justice”.
Okay – and when do we hear about Everton’s second breach?
It is understood that the hearing will be later this week, meaning a likely decision on April 2. Any appeal would take the case into the back half of May, potentially after the season has ended.
But aren’t Manchester City and Chelsea under investigation – why have we not heard anything?
City are vehemently denying the 115 allegations laid in February 2023. Their case is expected to be heard from October with a verdict next spring. Chelsea have yet to be charged despite admitting uncovering a breach of spending rules which took place under Roman Abramovich.
Nuno Espirito Santo’s side are the second team to be slapped by a deduction after Everton were docked six points.
They originally had ten taken from their total but it was reduced after a successful appeal.
Everton could be hit with a second deduction for another PSR breach.
The Toffees’ hearing must be completed by April 8, allowing any further points deduction to be imposed before the end of the season – although they would surely appeal any extra punishment.
2022/23:
2023/24:
