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Forest given four points deduction for breaching Premier League financial rules

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Nottingham Forest were penalized four points following a breach of premier leaguethe profitability and sustainability rules (PSR) of .

Forest was referred to an independent commission in January after the club reported losses in excess of the allowable amount during the three-year reporting cycle ending with the 2022-23 season.

Under the guidelines, they could have been fined or deducted points for this offense, and their four-point deduction now takes them down to 18th in the Premier League.

The new Premier League rankings

They are the second Premier League team this season to have points taken away following a PSR breach. after Everton lost 10 points in November. This figure was later reduced to six points after a three-day appeal. Everton could face a second points deduction this season after being charged alongside Forest for another breach of PSR rules in January.

Forest now have seven days to indicate whether they intend to appeal the sanction. The Premier League itself can also appeal the decision taken by the independent commission in order to increase the sanction. This will be decided by the league’s board of directors, in consultation with its legal team.

The Premier League has set May 24 as the deadline for any appeal. which comes after the end of the season on May 19. This date precedes the league’s annual general meeting.


What did the Premier League say?

A statement read: “An independent commission has imposed an immediate four-point deduction on Nottingham Forest FC for breaching the Premier League’s Profitability and Sustainability Rules (PSR) for the period ending the 2022/23 season.

“Nottingham Forest were referred to an independent commission on January 15, following an admission by the club that it had exceeded the relevant PSR threshold of £61 million by £34.5 million.

“The threshold was below £105m as the club spent two seasons of the assessment period in the EFL Championship. The case was heard under the Premier League’s new rules, which provide for an accelerated timetable for PSR cases to be resolved in the same season in which the complaint is made.

“The independent commission determined the sanction following a two-day hearing this month, during which the club had the opportunity to detail a range of mitigating factors.

“The committee found that the club had demonstrated ‘exceptional cooperation’ in its dealings with the Premier League throughout the process.”

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What did Forest say?

A club statement said: “Nottingham Forest are extremely disappointed with the committee’s decision to impose a four-point penalty on the club, to be implemented with immediate effect.”

“We were extremely dismayed by the tone and content of the arguments presented by the Premier League to the committee,” the statement added. “After months of engagement with the Premier League and exceptional cooperation throughout, this was unexpected and damaged the confidence we had in the Premier League.”

The club also called the Premier League’s initial starting point for an eight-point penalty “totally disproportionate” and highlighted a number of “unique circumstances” involved and proposed mitigation measures.

They also said that the commission’s decision “raises issues of concern for all candidate clubs” and that the reasoning that clubs should only invest after making a profit on the development of their players “destroys mobility in the football pyramid” and will lead to “stagnation”. of our national game.

“We believe that the high levels of cooperation shown by the club during this process, and which are confirmed and recorded in the committee’s decision, have not been reciprocated by the Premier League.” the press release.


How did we get here?

Forest were referred to the committee by the Premier League in January over the alleged breach, which relates to the calculation of PSR for the three-year reference period ending with the 2022-23 season.

Forest said they would “continue to cooperate fully with the Premier League on this matter and were confident of a speedy and fair resolution”.

Forest have signed more than 40 players since securing promotion in May 2022, with owner Evangelos Marinakis sanctioning a transfer spend of around £250 million ($318 million) to help the club establish themselves in the elite.

Forest believed they had complied with the regulations regarding allowable losses, with much of the problem centered on Sale of Brennan Johnson to Tottenham Hotspur.


Johnson’s sale to Tottenham was key to Forest’s pitch (Michael Regan/Getty Images)

The club’s argument – ​​which they put forward in conversations with the Premier League – was that they could have sold Johnson earlier in the window, but doing so at that stage would have meant accepting a significantly lower price. Its sale only took place on September 1, well after the end of the financial year, for £47.5 million.

New guidelines aimed at speeding up PSR decisions have been introduced to ensure that any fundamental breaches of the regulations are dealt with in time for sanctions, such as points deductions, to be imposed in the same season as the charge is scope.

All clubs were required to submit their accounts for 2022-23 by December 31 – rather than in March as they previously did – with any subsequent breaches and charges being confirmed 14 days later.

What are the rules for profitability and sustainability?

All Premier League clubs are assessed annually for their compliance with the competition’s profitability and sustainability rules.

Their compliance with these rules is assessed by reference to the calculation of the club’s DPS, which is the sum of its adjusted profit before tax for the relevant tax period.

Under the PSR, clubs are allowed to lose a maximum of £105 million over three seasons (or £35 million per season), but certain costs can be deducted, such as investment in youth development, infrastructure, community and women’s football.

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There were also specific COVID-related allowances and, to help clubs, the league combined the two pandemic-affected seasons into one, turning the three-year accounting period into four years.

Forest’s permitted losses are below the £105 million limit because the club was in the Football League for part of the accounting period. Their highest figure instead stands at £61m, which breaks down to £13m for the 2020-21 and 2021-22 seasons when they were in the Championship, plus £35m for the last season, their first return to the elite.

Have there been other cases like this?

Forest are only the third club to face action like this, after Evertontwo separate violations and subsequent point deductions this season, while Manchester City faced more than 100 charges last February.

The outcome of City’s trial has not yet been announced, Athleticism reporting that a verdict – which would be subject to appeal – would likely take a considerable amount of time to reach.

Last year, ChelseaThe new owners of self-reported incomplete financial information related to transactions that took place during the leadership of the previous owner, Roman Abramovich, between 2012 and 2019.

Abramovich-Chelsea


Transactions made under Abramovich remain under investigation (Paul Gilham/Getty Images)

European governing body UEFA fined them €10 million for the historic breach in July. while the Premier League and the English FA continue their investigation.

There have been several precedents in the English Football League in recent years, but a sanction relating to PSR breaches in the top flight of English football was unprecedented before Everton.

In fact, on only two other occasions has a club been handed a points penalty in the history of the Premier League.

Middlesbrough were deprived of three points for failing to play a match in the 1996-97 season while Portsmouth were hit with a nine-point penalty in January of the 2009–10 campaign after being placed into administration.

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“Frustration and disappointment for Forest”

Analysis by Nottingham Forest correspondent Paul Taylor

There is frustration and disappointment at Nottingham Forest as they find themselves plunged into the Premier League relegation zone by a four-point deduction for breaching profit and sustainability regulations.

And, over the weekend, the suggestion within the club was that four points was the level of punishment they would consider calling for. They have 14 days to appeal, giving them time to digest the verdict before rushing to make a decision. But it is likely that they will.

Him dropping them in the final three will add a little extra salt to the wound.

The Nottingham Forest race

Team Date Far from home

March 30

Home

April 2

Home

April 8

Far

April 13

Home

April 20

Far

April 27

Home

May 4

Far

May 11

Home

May 19

Far

As is the fact that, throughout the process, Forest feel like they have gone out of their way to work with the Premier League – to accept that they have broken the regulations, but to explain what they consider to be extenuating circumstances – largely surrounding the sale. of Brennan Johnsonlate in the window.

But, amid the frustration – at a time when Forest feel hit hard by a number of controversial refereeing decisions – it will also be understood that the punishment could have been harsher.

And, even amid the possibility of an appeal, Forest at least now know what they are facing, as they look to secure a third season of top-flight football, under Nuno Espirito Santo.

(Top photo: Jon Hobley/MI News/NurPhoto via Getty Images)



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