Nottingham Forest face a potential points deduction after being accused of breaching the Premier League’s profit and sustainability rules (PSR) and Everton could lose further points after being accused of a further breach of the same rules.
Clubs have 14 days to respond to the charges before a hearing is held by an independent panel to decide any punishment. Forest can expect to learn their fate in early April and will have the right to appeal. High-profile sports lawyer Nick De Marco KC has been appointed to handle their case.
Everton were deducted 10 points in November for £19.5 million overspending in the 2021-22 season and are awaiting the outcome of their appeal. This second charge relates to the 2022-23 accounts.
-
Download the Guardian app from the iOS App Store on iPhone or the Google Play store on Android by searching for ‘The Guardian’.
-
If you already have the Guardian app, make sure you’re on the latest version.
-
In the Guardian app, tap the Menu button at the bottom right, then go to Settings (gear icon) and then Notifications.
-
Turn on sports notifications.
Everton face the risk of being deducted points twice in the same season for financial breaches, but the outcome of the appeal will have a significant impact on the latest charge. The appeal date has not yet been confirmed.
If the appeal is decided in Everton’s favour, and the mitigating factors put forward by the club for its losses, such as interest on loans for a new stadium and the loss of commercial deals after UK government sanctions were imposed on oligarch Alisher Usmanov, are accepted, it would extend the breach only to 2022 It will decrease not only by 2023 but also by 2023.
If the appeals panel sticks to the original findings and rejects Everton’s claims, the club faces the possibility of a second points deduction for the 2023 window. According to Premier League rules, a solution must be found by the end of the season.
The league said Everton and Forest had “confirmed to the Premier League that they had breached the league’s profitability and sustainability rules”. “This is a result of sustaining losses above the permissible thresholds for the evaluation period at the end of the 2022-23 season.”
Clubs are allowed to lose £105 million over a three-year period (actually £35 million per season) but because Forest had two seasons in the Championship’s most recent cycle, their losses were capped at £61 million; This works out to £13 million each. £35 million for the 2020-21 and 2021-22 seasons and last season.
Forest’s defense is expected to hinge on their decision to delay the sale of Brennan Johnson to ensure they get the highest possible price for the academy graduate, whose fee would be pure profit in PSR terms. The striker was sold to Tottenham for £47.5m on deadline day last September, two months after the cut-off point for compliance with the PSR. If Forest had sold Johnson before June 30, the club believe they would have received a lower fee. Although this puts them on the right side of allowable losses, they are expected to argue that maximizing their profits and making them more sustainable is better for their long-term health.
After gaining promotion from the Championship to the play-offs in 2022, Forest have spent around £250 million on 43 players to build a squad capable of competing in the Premier League. Forty players arrived but the club had few marketable assets, making Johnson’s departure significant. At the start of last summer, Forest received a number of written offers for Johnson worth around £30 million but knew they could get more if they bided their time.
There will be no transfers to Forest yet this month as the club take a cautious approach to the market and need to sell before considering signing Nuno Espírito Santo, who sits three places and four points above the relegation zone.
“Nottingham Forest accepts the Premier League’s statement confirming that the club has been accused of breaching the league’s profitability and sustainability rules today,” Forest said. “The club intends to continue to co-operate fully with the Premier League on this matter and is confident that a swift and fair resolution will be reached.”
Everton, who sit one place and one point above the relegation zone, could be penalised again despite a 10-point deduction in three of the four years leading up to the latest charge. The club has raised concerns about double jeopardy in the Premier League but has been informed that this is a matter for the independent commission to consider the latest accusation. Unlike the EFL, the Premier League currently has no guidelines for capping losses in sanctioned years.
Everton criticized the league’s rules in a statement echoing Monday’s accusation: “This relates to a period covering the 2019-20, 2020-21, 2021-22 and 2022-23 seasons. It therefore includes the financial periods (2019-20, 2020-21 and 2021-22) for which the club has currently received a 10-point sanction. The club is currently appealing this sanction.
“The Premier League, unlike other governing bodies including the EFL, does not have guidelines preventing a club from being sanctioned for alleged breaches of financial periods that are already subject to penalties. As a result and the Premier League is committed to dealing with such matters ‘in-season’ Due to this, the club is in a position where it has no choice but to submit a PSR calculation which is subject to change depending on the outcome of the appeal.
“The club must now defend another Premier League complaint, involving the same financial periods previously sanctioned, before this appeal has even been heard. “The club is of the view that this is due to a clear flaw in the Premier League’s rules.”
Everton believe they have been unfairly penalized for losses associated with the construction of their new stadium at Bramley Moore pier and for ending sponsorship deals with companies linked to Usmanov after Russia invaded Ukraine in February 2022. USM agreed a £200 million naming rights deal. for example, the new stadium and the loss of these commercial deals have affected Everton’s calculations for 2022-23.
The club’s latest accounts have not been published, only submitted to the league, but it is understood that the losses were due to loss of commercial income and stadium costs rather than expenses in the transfer market. Of the current Premier League clubs, only Brighton and Luton have had a lower net spend on players over the past five years than Everton.
The finances of club owner Farhad Moshiri, who is no longer financing the club as he tries to sell a majority stake to 777 Partners, are in a precarious situation. The Premier League is yet to confirm the takeover of the controversial American investment firm. It remains to be seen whether the latest accusation will lead 777 to withdraw its interest.