Nottingham Forest’s hearing after being charged with breaching the Premier League’s profit and sustainability regulations (PSR) begins this week.
With Forest 17th in the table, just four points above Luton Town and the relegation zone, the possibility of points deductions presents a huge threat to their Premier League safety.
Everton were initially deducted 10 points for a similar breach, which was reduced to six on appeal last month.
Here are all the possible outcomes of Forest’s FFP hearing, as well as how it would impact their chances of Premier League survival and also Manchester City’s looming 115 charges.
Three possible outcomes of Forest’s FFP hearing
Unlike Everton’s appeal, which was conducted with all the facts already established, there is a lot we don’t know about the charges against Forest.
We know that unlike in Everton’s case, when their permissible loss limit was £105m, Forest are only allowed to have lost £61m in the period between 2019-2023, as they spent three of those seasons in the Championship.
While it was established in the initial trial that Everton had lost £19.5m over the limit, it is currently unclear how significant Forest’s breach is.
But we can assume it is less than £20m, given Forest’s primary mitigation is expected to be the sale of Brennan Johnson. Johnson was sold to Tottenham for £50m in August 2023, outside the financial period counted here, but there was an offer from Brentford in June of £30m which Forest rejected.
A breach of around £11m would be proportionally the same as Everton’s £19.5m, given the lower threshold.
And according to sports finance expert Dr Rob Wilson, Everton’s appeal has now set the benchmark for Forest’s – and all other future – PSR breaches.
“What we now know is that in the Premier League’s view, a £20m overspend of PSR equates to a six-point reduction,” Wilson tells i. “You would be working out Forest’s penalty based on the seriousness of the breach.”
What is PSR?
PSR, or profit and sustainability rules, are the Premier League’s equivalent of Financial Fair Play regulations.
The key regulation clubs must adhere to is a loss limit of £105m over any three-year financial period, with potential points deductions for any losses which exceed that cap.
PSR was introduced in 2013, in the wake of Portsmouth going into administration, to ensure that clubs are run in a sustainable manner and that rogue or overambitious owners cannot threaten their existence.
If Forest’s breach is either directly or proportionally similar to Everton’s, there will inevitably be an expectation that they receive the same penalty, which would perhaps be the safest outcome from the Premier League’s point of view.
Yet Wilson does not believe this will be the case: “I don’t think it will be bigger than what Everton’s was, I think it’ll be more like half. I reckon they’ll get three or four points.
“The mitigation will be the Brennan Johnson case, just as Everton were able to prove they’ve had a low net spend over the past few years because of the big net spend they’d had previously.
“Forest will point to the fact they did sell Johnson and that sale has brought them back into compliance – assuming it has done. That will help them ultimately. You’ve removed that sporting advantage through that particular player.”
There is also the possibility they will only receive a financial penalty, but Wilson does not think this is a feasible option: “The critics will point to the fact they stayed up last season because they breached PSR.
“The same could be said of Everton, which is why I think they will get a points penalty, but mitigation will land in their favour, particularly now we have the six-point benchmark with Everton.”
What impact could Forest’s FFP charge have on the relegation battle?
Even though Wilson only predicts a three or four point deduction for Forest, this could still have a huge impact on their season.
They are currently only four points ahead of Luton, who have a game in hand, so even a small deduction could be disastrous.
And past that, the uncertainty around the lingering charge could have a serious effect on Forest’s players and manager, who are unsure exactly what they need to do to ensure their Premier League survival.
Forest’s initial verdict is expected to be announced in early April, but they will then have the option to appeal any potential punishment, something they are likely to do if it includes any form of points deduction.
The Premier League have set the backstop date for all appeals to be resolved in this case for Friday 24 May – five days after this season finishes.
This means there is every chance Forest will finish the season not knowing whether they are safe or not and could have to play their remaining games without clear parameters for ensuring their survival.
What Forest’s FFP hearing means for Man City’s 115 charges
As Everton and Forest fans have commented on throughout their own cases, Manchester City were charged with 115 breaches of PSR in January 2023, a case which has still not been heard or resolved.
This is due to the complexity of City’s various breaches, around 35 of which are for substantial violations, alongside a number of incidents of allegedly refusing to provide documents and slowing down the investigation into them.
But Everton and Forest’s cases may still have a significant impact on City’s hearing, which is expected to take place as early as autumn this year.
They will provide the only benchmark for a punishment in a case like City’s, whether they are found guilty of one or 115 of the charges. City have strenuously denied any wrongdoing.
Wilson says: “Any lawyer will be using the six points as the benchmark now, which is why we had the palaver in the first place [with Everton], because they’re probably thinking about it ultimately in the context of City.”
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