NOTTINGHAM Forest face ANOTHER points deduction next season – unless they sell a star player by the end of June.
Forest are still seething at the four-point deduction imposed on Monday by an independent commission into the admitted breach of Premier League Profitability and Sustainability Rules.
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The City Ground club conceded to the commission that they had lost £95,536,000 over three years.
With only one year in the top flight and two of those seasons in the Championship, Forest were only permitted “allowable losses” of £61m, meaning they bust the limit by £34.536m.
And the numbers contained in the official written reasons by the three-man commission show that Forest are already up to £26m over their maximum loss limit for THIS season.
Forest’s calculations, submitted to the Prem, showed a loss of £40m in the 2021-22 season and a further deficit of £52m last term.
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But even with two seasons in the Prem, they are limited to cumulative losses of £83m for the three terms including this campaign.
That means the club went into this season £9m over the limit – risking at least a three-point deduction.
Forest then told the Commission the club was “projecting to realise losses of approximately £12-17m for the year ending 30 June 2024”.
On a best-case scenario, according to their own calculations, Forest will be in breach of the limit by between £21m and £26m.
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But Forest’s initial calculations LAST season were based on them finishing 12th.
Their 16th-placed finish meant £12.5m in “lost” prize money.
Nottingham Forest Q&A
NOTTINGHAM FOREST have been deducted four points – but why? Can they appeal it? And could Everton be hit with more sanctions? Martin Lipton explains…
So Forest have been deducted four points – but why?
Forest admitted on December 31 when they filed their accounts for last season that they had breached the allowed Profitability and Sustainability limit. They finally admitted a breach of £34.536m
What is the limit?
Clubs who are in the Prem for three seasons are limited to “allowable losses” – after calculations including the “amortisation” of transfer fees, stadium building and Covid-related expenditure are taken out – of £105m over three seasons. As Forest only had one top flight campaign, their limit was £61m
Isn’t that unfair?
Forest spent those two years in the EFL, where clubs are restricted to losses of £13m. They were working under those regulations.
What did Forest admit?
Forest told the Prem on December 31 they were £25.8m over the limit, blaming it on an anticipated 12th-placed finish, £20m in promotion bonuses and a claim of more than £11m in Covid losses.
So how come the final figure?
Prem chiefs capped Covid-related losses at £2.5m
And what was the Brennan Johnson argument?
Forest said that because they had sold Johnson to Spurs for £47.5m on deadline day last summer that it was a “near miss” and “golden mitigation” – if they had sold him before the end of the financial year on June 30 they would have been fine.
Why was that rejected?
Forest revealed they had turned down an offer of £42.9m from Atletico Madrid on June 30 and then three offers – ranging from £32m to £40m – from Brentford between July 21 and August 28 before the Spurs deal went through. Johnson played in Forest’s first three Prem games of the season – including the win over Sheffield United – and so they gained a clear “sporting advantage”.
What did the Prem argue?
Prem financial chiefs warned Forest on June 6 that Johnson needed to be sold by the end of the month and that advice was ignored. This was a“significant breach” of the regulations and lawyers argued that the starting point should be an eight point deduction.
Forest disagreed, presumably?
Indeed so. Nick De Marco KC suggested that Forest should not have any points deducted at all. That the case was far less serious than Everton’s – they were initially deducted 10 points,m reduced to six on appeal – and that if points were lost the punishment should be suspended.
And the Commission ruled…?
That the significant breach deserved a six point deduction, with two points reduced for Forest’s guilty pleas and cooperation ensured the hearing took place five weeks ahead of the latest date.
What next – can Forest appeal?
Yes. They have seven days to lodge an appeal and that hearing would likely be scheduled for mid-April, allowing a final decision by the start of May, well ahead of the “backstop date” of May 24. Forest could then ask for an “Arbitration hearing” but would have to prove a “breach of natural justice”.
Okay – and when do we hear about Everton’s second breach?
It is understood that the hearing will be later this week, meaning a likely decision on April 2. Any appeal would take the case into the back half of May, potentially after the season has ended.
But aren’t Manchester City and Chelsea under investigation – why have we not heard anything?
City are vehemently denying the 115 allegations laid in February 2023. Their case is expected to be heard from October with a verdict next spring. Chelsea have yet to be charged despite admitting uncovering a breach of spending rules which took place under Roman Abramovich.
If a similar over-estimate of Nuno Espirito Santos’ side has been made this season – and the calculation took place BEFORE the commission’s points deduction decision – then the scale of the breach would be close to the same £34.5m mark that was so costly at the hearing.
The only way, then, to avoid being in breach once again would be to sell a major player – raising £30m-plus in revenue – before the end of the financial year on June 30.
Morgan Gibbs-White would be the obvious asset to cash in on but Forest would lose at least £15m in “amortisation” costs on any sale, meaning they would need to get a £45m fee to be confident of clearing the breach hurdle.
If Forest do stay up despite Monday’s loss of four points, then they would face a repeat of the proceedings of the past two months at the same stage of next season’s Prem campaign – and the likelihood of a tougher sanction.
And even if they are relegated, then the later accounting reporting date for the EFL would be likely to see a deduction of Prem points in 2025-26 if they were to earn promotion back to the top flight at the first opportunity.
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