Nottingham Forest have decided to appeal against the four-point deduction for breaching the Premier League’s profitability and sustainability rules (PSR).
The club’s legal team, led by Nick De Marco QC, believe the punishment is excessive and will put forward a new case outlining their grievances with the initial judgement.
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Forest had admitted a breach of PSR, having overspent by £34.5million over a three-year period, and would have been hit with a six-point deduction but for what the independent commission described as their “excellent co-operation”.
A Forest statement read: “Nottingham Forest can confirm that it has today lodged an appeal against the four-point sanction imposed by the commission in relation to the club’s breach of the Premier League’s Profit & Sustainability Rules (PSR). The club will not be making any further statement at this time.”
The four-point sanction imposed last week meant Nuno Espirito Santo’s side dropped below Luton Town into the Premier League’s relegation places, with nine games to save themselves from falling into the Championship.
Forest said they were “extremely disappointed” with the punishment and, a week on, the club have concluded there a number of issues that warrant the case being taken to an appeal.
The club’s statement last week described themselves as “extremely dismayed by the tone and content of the Premier League’s submissions”, adding they were “also surprised that the Premier League gave no consideration at all to the unique circumstances of the club and its mitigation”.
Forest argued that they were placed at a serious disadvantage to the other Premier League clubs, who had a significantly higher spending limit and that the rules were unfairly stacked against teams such as themselves who had been out of the top division for, in their own case, 23 years. They had also tried to argue that Fulham and Bournemouth, the two clubs who were promoted with them, had benefited from parachute money from their previous years in the Premier League.
Forest had seven days from the confirmation of the sanction to notify whether they intend to appeal. The Premier League itself could also have appealed the decision, which was made by the independent commission, in order to increase the penalty.
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Everton, meanwhile, are preparing to face another commission for their second PSR charge of the season.
The Merseyside club saw a ten-point penalty for their first PSR breach reduced to six on appeal last month. Another points deduction looks inevitable, threatening their position of 15th in the table amid a relegation battle that increasingly looks dependent on the outcome of the legalities.
The Premier League has pencilled in May 24 as a backstop date for any appeal which comes after the end of the season on May 19. This date comes ahead of the league’s annual general meeting.
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How did we get here?
Forest have signed more than 40 players since securing promotion in May 2022, with owner Evangelos Marinakis sanctioning a transfer spend of around £250m ($318m) to help the club establish themselves in the top flight.
Forest believed they had worked within the regulations when it came to the allowable losses with a lot of the issue centring around Brennan Johnson’s sale to Tottenham Hotspur.
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The club’s argument — which they have made in conversations with the Premier League — was that they could have sold Johnson earlier in the window but doing so at that point would have meant accepting a markedly lower price. His sale did not go through until September 1, well after the financial year ended, for £47.5m.
New guidelines aimed at fast-tracking PSR decisions have been introduced to ensure any basic breaches of the regulations are dealt with in time for punishments, such as points deductions, to be levied in the same season as the charge is brought.
All clubs had to submit their accounts for 2022-23 by December 31 — rather than in March as they had previously — with any breaches and subsequent charges confirmed 14 days later.
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What are the profit and sustainability rules?
All Premier League clubs are assessed for their adherence to the competition’s profitability and sustainability rules each year.
Their compliance with said rules is assessed by reference to the club’s PSR calculation, which is the aggregate of its adjusted earnings before tax for the relevant assessment period.
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Under the PSR, clubs are allowed to lose a maximum of £105m over three seasons (or £35m a season) but certain costs can be deducted, such as investment in youth development, infrastructure, community and women’s football.
There were also specific allowances relating to COVID and, to help clubs, the league combined the two pandemic-hit seasons into one, turning the three-year accounting period into four years.
Forest’s permitted losses are lower than the £105m limit because the club were in the Football League during a portion of the accounting period. Their top figure instead amounts to £61m, which breaks down as £13m for the 2020-21 and 2021-22 seasons when they were in the Championship, plus £35m for last season, their first back in the top flight.
(Top photo: Jon Hobley/MI News/NurPhoto via Getty Images)