Nottingham Forest ‘are hit with FOUR-POINT deduction’ for breaking Premier League financial rules, dropping them into the relegation zone with just nine games remaining | Only Sports And Health

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Nottingham Forest have reportedly been hit with a four-point deduction after breaching the Premier League’s Profit and Sustainability rules.

The punishment, reported by The Guardian, sees Forest drop into the relegation zone as they now sit 18th in the Premier League table on 21 points, a point behind Luton in 17th. An appeal will likely follow.

Forest were charged with breaching spending regulations in January 2024 alongside fellow Premier League side Everton, the Toffees receiving a 10-point deduction earlier in the season.

That penalty was reduced to six points later on but Forest have now suffered a similar fate at a crucial point in the campaign.

The six-point hit handed out to the Toffees is believed to be viewed as something of a benchmark punishment but Forest have been docked two points less.

Nottingham Forest have been hit by a points deduction for breaching Premier League spending rules

Forest move into the relegation zone after picking up the penalty and drop behind Luton Town

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Prior to the announcement, Forest had sat just three points clear of Luton in 18th place, the Hatters earning a late 1-1 draw with Nuno Espirito Santo’s side on Saturday to stay within striking distance.

A hearing took place to decide what punishment the club would face on Thursday and Friday last week, ahead of Saturday’s game.

Forest’s spending since returning to the English top-flight at the start of 2022-23 has been lavish in the extreme.

From that summer, as many as 43 players have arrived at the City Ground for more than £250million.

Asked about the impending verdict after Saturday’s clash with Luton, Espirito Santo said that the club would ‘keep on going and fighting’ in a bid to beat the drop.

‘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),’ the Premier League said in a statement in January when the charges were announced.

‘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.’

Meanwhile, Mail Sport reported in January that part of Forest’s defence may involve the sale of Brennan Johnson to Tottenham for £47.5million in August.

Nuno Espirito Santo’s side now face an uphill battle to remain in the Premier League for another year

The deduction leaves Forest at greater risk of relegation as they drop into the drop zone

As FFP calculations are made over a three-year period ending on June 30, the Johnson deal will count towards the reckoning for 2021-2024 rather than 2020-23.

Clubs are permitted to make financial losses of £105m over a three-year period, with Forest reporting an annual loss of £45.6m in their last accounts.

Another complication comes as Forest were only a Premier League team for one of those three seasons; Championship club’s have losses capped at £13m per season, meaning their cap was in fact £61m.

Forest say they could have sold Johnson to Brentford in June for about £30m, which would have put them in a healthier financial state for the 2020-23 period, but nearly £20m out of pocket overall.

Q&A

WHO IS SUBJECT TO FFP RULES & HOW MUCH CAN THEY LOSE?

In England, all Premier League clubs have to comply with Profit and Sustainability Regulations (PSR) which state they cannot lose more than £105m in a three-year period. In the EFL, rules differ depending on the division a club is in. In the Championship, Profit and Sustainability (P&S) rules dictate clubs are permitted to lose up to £39m over three years. In Leagues One and Two clubs follow the Salary Cost Management Protocol (SCMP) which states each club can only spend a fixed percentage of its revenue on wages. That limit can also be impacted by equity injections or net transfer spend.

IS ALL CLUB SPENDING AND INCOME PART OF FFP CALCULATIONS?

Income yes. Spending no – and this is where complications come in. Clubs are allowed to spend money on infrastructure, women’s teams and academy costs and not see it go towards their figure. In Everton’s previous 10-point sanction, which they saw reduced to six after appeal, a contentious area was over interest due on loans the club said were related to their new stadium, which the Premier League disputed.

WHAT HAVE FOREST DONE WRONG?

Given their promotion from the Championship, Forest had to play by different rules and their permitted losses were at a lower level of £61m. Effectively their top-flight campaign had an allowance of £35m, with £13m for each of the two seasons in the second-tier. Forest have, famously, signed 43 players since they won the play-off final in May 2022.

WHY HAS THERE BEEN A RECENT SPIKE IN CHARGES?

P&S came into play during the 2015-16 season. The simple answer is that the ‘spike’ has happened now because the three clubs involved – if you include Manchester City – have only recently been found to have allegedly broken the rules.

WHAT IS THE APPEALS PROCESS, WILL THE DEDUCTIONS APPLY THIS SEASON AND WHAT DEFENCE CAN CLUBS HAVE?

A club has a fortnight to respond and a hearing must be completed by early April – before any appeal is heard. Should an appeal be forthcoming the process could run to late May – beyond the end of the season. Because of the subjectivity involved, clubs can appeal on any one of a number of areas. With Forest, it is expected they will claim they sold Brennan Johnson to Tottenham on deadline day in August for a higher fee (a club-record £47.5m) than they would have received in June – prior to the end of the financial year, although whether that would wash remains to be seen.

WHAT IS THE BIGGEST PUNISHMENT A CLUB COULD BE HIT WITH IF FOUND GUILTY?

There is no sanctioning policy or set range of punishments. Instead, any punishment is in the hands of the Premier League-appointed independent commission, and the rule book is ‘open’. It is likely that the harshest punishment would come in the form of a heavy points deduction that could make relegation for an offender a formality.

By Mike Keegan

For the club’s sustainability they argue that accepting nearly £50m for Johnson in August was better than accepting £30m earlier in the summer.

A Forest spokesman 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 charges levelled against Manchester City in February for 115 alleged breaches is a case that remains ongoing.

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