Nottingham Forest forced to sell players by 30 June to avoid fresh FFP penalty

Nottingham Forest must sell players before the profitability and sustainability rules deadline at the end of June to avoid breaching spending limits and risking a points deduction next season.

The summer transfer window does not open until 14 June, giving them only a two-week period to confirm sales. Clubs are permitted to agree deals outside of the window but they cannot go through until it opens.

Forest were deducted four points last season for breaching spending limits and were unsuccessful in an attempt to appeal the decision. The club avoided relegation by six points.

Clubs are due to submit their 2023/24 accounts by 30 June and Premier League auditors will review the three-year year period up until then. Under PSR, they can lose a maximum of £105m across three years, or £35m per season.

i can reveal that Forest will have to sell players to avoid a further breach.

In Forest’s hearing last year, lawyers tried to argue the sale of Brennan Johnson to Tottenham Hotspur for £47.5m should have been permitted in the previous accounts despite falling out of the timeframe. They claimed the sale was delayed to maximise his value.

The argument was rejected by an independent panel. Forest would have been deducted six points but it was reduced by two for an early plea and co-operation.

“The Brennan Johnson sale is now included in this year’s figures,” football finance expert Kieran Maguire told i. “They’ve got that boost to finances. And shifted some of the high earners off the payroll.”

But it is not yet enough. Forest spent heavily after earning promotion to the Premier League via the Championship play-offs in May 2022, spending more than £100m to build a squad capable of staying in the league. Players such as Jesse Lingard and Jonjo Shelvey signed on high wages, but have since moved on.

“Their wage bill for a club in their first season in the Premier League was ludicrous,” Maguire added. “They were averaging £67,000 per week. So many players came on big deals.”

Forest declined to comment.

Why is the deadline so important?

Nuno Espirito Santo faces the prospect of starting next season without some of his best players (Photo: Getty)

Thought there couldn’t possibly be any more dates added to the football calendar? Think again.

This one could have a profound impact on your football club, according to football finance experts. After it, Manchester United are going to have a whole lot more spending power, Aston Villa possibly a whole lot less.

This is 30 June – PSR deadline day. Well, there or thereabouts.

In reality, it’s not quite as clear cut as that. 30 June is the profitability and sustainability rules deadline, but some clubs have already submitted spending. Liverpool do their accounts by 31 May.

“They are so well run,” Maguire says. “FSG are forensic in their analysis of their accounts. They are ridiculously good at lining up the numbers they want to present to the rest of the world. They accelerate and decelerate spending and income and so on to reflect that.”

But not all multibillion-pound football clubs are quite so punctual.

“There are other clubs who fly more by the seat of their pants and are slightly less organised. That’s a reflection of the owner quite often, who might be more volatile.”

There will also be the clever accountants who can shift the accounting period to 31 July and move numbers around spreadsheets so they are more palatable, in what is known as “pro-rating”.

“It’s perfectly legal,” Maguire explains. “It’s a very simple workaround I’m surprised so few clubs have adopted. It’s a one-off as well. But it still works.”

Last season’s points deductions for Everton and Forest have rocked chief executives and finance directors, after the two clubs were docked points for going over the limits by not very much.

Under PSR, clubs can lose a maximum of £35m per season, or £105m over three seasons. Costs can be deducted for things like infrastructure, community work and youth and women’s teams. Clubs were also permitted to deduct money during the Covid-impacted 2021/22 season.

After 30 June, when the new period begins, that season will drop off the period clubs are judged on and for United it will be a huge weight lifted. United’s loss of £150m in the 2021/22 season has weighed them down like an anchor in the past three season.

Erik ten Hag complained about the lack of business in the January window, due to financial constraints, when no players at all were signed despite a mediocre start to the season. United’s chief operating officer Collette Roche had warned in December that they had to be “very careful” as financial rules “have real teeth”.

The reality for clubs now is that significant spending in the summer – United spent more than £200m on Mason Mount, Andre Onana and Rasmus Hojlund last summer – can leave no budget come January, with accountants eyeing the June cut-off with caution.

Murillo’s future remains uncertain at the City Ground (Photo: Getty)

Villa face the opposite problem. For three years their PSR budgets have been boosted by the £100m Manchester City paid for Jack Grealish in August 2021 – all pure profit for an academy player. That will disappear from next season. Is it a coincidence they are pushing for the £105m limit to be increased next year?

Maguire says Everton “aren’t in a great position”. Big losses from 20/21 of £121m will drop off, but they lost £45m and £89m in the following two seasons.

“They have to box very cleverly,” he says. “They still have this issue in terms of Goodison Park not generating enough money for a club the size and stature of Everton. It generates less than £1m per match in ticket sales. Don’t be surprised if they sell.”

Everton believe that they will not breach the spending limits again..

Newly promoted Leicester City are “one to watch”, Maguire adds. They have attempted to dance between Premier League and EFL auditors after being relegated last season, but lost £182m in the two seasons up to 2023, and it is believed they, too, could have to sell or risk a points deduction.

Newcastle, with near limitless money since the Saudi Arabian takeover and trying desperately hard to navigate the financial limitations to spend what’s required to break into the top four, are “in an interesting position”, Maguire says.

They signed a new front-of-shirt deal with Saudi events company Sela, for around £25m per year, and a shirt-sleeve deal with Noon, for around £7.5m per season. They have the financial boost of playing in the Champions League.

“But looking in my rearview mirror, for all the faults that can be levelled at [former owner] Mike Ashley, he ran Newcastle as a sustainable football club. The loss dropping out of their accounts from 2021 is £14m, they made a £73m loss in 2022, a £73m loss in 2023, and I don’t think it will be that bad in 2024, but £73m and £73m is £146m – we’re over £105m already.”

Meanwhile, Chelsea co-owner Todd Boehly has already pushed the amortisation limits to such an extent that rules had to be brought in to limit the spread of transfer fees and wages to five years, then sold Chelsea hotels effectively to themselves to boost accounts.

Chelsea would have lost £166.4m in the 2022/23 accounts had they not sold two hotels for £76.5m to a company owned by its owners. It is still not clear if the amount has been signed off by the Premier League as “fair market value”.

“They’re selling the family silver to themselves,” Maguire says. “I don’t think Chelsea are going to be in too problematic a position.”



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