What we know so far as Nottingham Forest set for key FFP date following Premier League charge

Nottingham Forest’s City Ground

The impact of being charged with breaching Profitability and Sustainability Rules (PSR) remains the great unknown for Nottingham Forest.

Nuno Espirito Santo’s side put further distance between themselves and the relegation zone with Saturday’s 2-0 win over West Ham United. But while the Reds look to do their bit on the pitch, there is still a sense of uncertainty over matters off it.

Forest are expected to discover the date for their PSR hearing this week, in what will be a significant moment for the club. Below, we take a look at what we know so far about the situation.

What have the Reds been charged with?

Little more than a month ago, on January 15, Forest were charged with breaching the Premier League’s Profitability and Sustainability rules. Everton were charged at the same time, having already been docked 10 points earlier in the season.

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: “Nottingham Forest acknowledges the statement from the Premier League confirming that the club has today been charged with a breach of the league’s Profitability and Sustainability Rules. 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 that 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 happened next?

Forest had two weeks to respond to the charge. According to the rules, following charges being levelled, a hearing by an independent commission has to be concluded by April 8.

The Reds are expected to discover the date for their hearing this week. The i report Forest will face a three-person independent commission within the first fortnight of March.

What then?

The club and the Premier League will be able to appeal the outcome of the hearing. Any appeals process must be concluded by May 24, five days after the final match day of the current season.

Any points deductions or sanctions must be applied to this season. The i report executives at other Premier League clubs believe Forest will be docked points.

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 recently said.

“We have to focus on things that we can control. As a squad that means our game preparation, the matches, and the 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 told i. “They were promoted with a squad that cost £12m up against billion-pound-costing squads. They only have a £61m allowable loss for FFP purposes 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.”

Mitigating factors

A key part of Forerst’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 has 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 for the club, with that £47.5m able to be booked straightaway.

“The issue for Forest is that 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 that any issue over the deal could be argued as requiring some leeway.

“It is claimed that 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, and especially Financial Fair Play, and represented Reds defender Harry Toffolo when he was 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, but a verdict has not yet been delivered.

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 the 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 that 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.”

What do you make of Forest’s PSR charge? Have your say in the comments below