by Nottingham Forest face a potential points deduction after being accused of breaching the Premier League’s profit and sustainability rules (PSR), while Everton could lose more points after being accused of further breaching the same rules.
The clubs have 14 days to respond to their reasons before facing a hearing by an independent panel which will decide any punishment. Forest can expect to learn their fate in early April and they will have the right to appeal. High-profile sports lawyer Nick De Marco KC has been hired to fight their case.
Everton were deducted 10 points in November for a £19.5m overspend in 2021-22 and are awaiting the outcome of their appeal. This second charge applies to their accounts for 2022-23.
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Everton are at risk of having points deducted twice in the same season for financial breaches, although the outcome of their appeal will have a major impact on the latest charge. A date for the appeal has not been confirmed.
If the appeal were to be decided in Everton’s favor and the mitigating factors put forward by the club for their loss were accepted, such as interest on loans for a new stadium and the loss of commercial deals related to oligarch Alisher Usmanov after the UK government impose sanctions on him. , which would reduce the infringement not only for the period up to 2022 but up to 2023.
If an appeal commission upholds the original decisions and rejects Everton’s arguments, the club has the chance to deduct a second point for the 2023 period. A resolution must be found by the end of the season under Premier League guidelines.
The league said Everton and Forest had “confirmed to the Premier League that they are in breach of the league’s profitability and sustainability rules. This is a result of maintaining losses above the permitted thresholds for the assessment period ending in the 2022-23 season.”
Clubs are allowed to lose £105m over three years – effectively £35m per season – but because Forest spent two seasons in the most recent Championship cycle, their losses are capped at £61m, which is £ 13m in each. of 2020-21 and 2021-22 and £35m last season.
Forest’s defense is expected to be based on their decision to delay the sale of Brennan Johnson to ensure they got the highest possible price for the academy graduate, whose fee, in PSR terms, would be considered pure profit. The forward was sold on deadline day last September for £47.5m to Tottenham, two months after the PSR deadline. If Forest had sold Johnson before June 30, the club believe they would have received a lower fee. Although that would put them on the right side of the permitted losses, they are expected to argue that maximizing their profits and making them more sustainable would be better for their long-term health.
Since promotion from the Championship through the play-offs in 2022, Forest have spent around £250m on 43 players to build a squad capable of competing in the Premier League. Forty players have arrived but the club had few salable assets, making Johnson’s departure significant. At the start of last summer Forest received several written offers of around £30m for Johnson but knew they could get more if they bide their time.
Forest are yet to make an arrival this month with the club taking a cautious approach in the market, needing to sell before they can consider adding to Nuno’s Espírito Santo squad, who sit three places and four points above the relegation zone .
“Nottingham Forest acknowledges the statement from the Premier League confirming that the club has today been charged with breaching the league’s profitability and sustainability rules,” Forest said. “The club intends to continue to co-operate fully with the Premier Division on this matter and are confident of a swift and fair resolution.”
Everton, one place and one point above the relegation zone, can be punished again despite the 10-point deduction for three of the four years leading up to the latest charge. The club raised concerns about double jeopardy with the Premier League but were told that was a matter for the independent commission which will consider the latest charge. Unlike the EFL, the Premier League has no guidelines for limiting losses in already sanctioned years.
Everton criticized the league rules in a statement showing Monday’s charge: “This applies to a period covering the 2019-20, 2020-21, 2021-22 and 2022-23 seasons. It therefore includes financial periods (2019-20, 2020-21 and 2021-22) for which the club has already received a 10-point sanction. The club is currently appealing that sanction.
“Unlike other governing bodies, including the EFL, the Premier League does not have guidelines that prevent a club from being sanctioned for alleged breaches in financial terms that have already been subject to penalties. As a result – and due to the Premier League’s new commitment to deal with such matters ‘in season’ – the club has had no choice but to submit a PSR calculation which is still subject to change, on waiting for the result. of the appeal.
“The club will now have to defend another complaint from the Premier League including the same financial periods as already approved, before that appeal is even heard. The club believes this is the result of a clear breach of Premier League rules.”
Everton believe they are being unfairly punished for losses related to the construction of their new stadium at Bramley Moore docks and for ending sponsorship deals with companies linked to Usmanov following Russia’s invasion of Ukraine in February 2022. USM had agreed a £200m naming rights deal for the new stadium, for example, and the loss of those commercial deals had an impact on Everton’s accounts for 2022-23.
The club’s latest set of accounts have not been published, they have only been submitted to the league, but the losses are understood to relate to lost commercial income and stadium costs rather than spending in the transfer market. Only current Premier League clubs Brighton and Luton have had a lower net spend on players over the past five years than Everton.
Their finances remain in a precarious position under owner Farhad Moshiri, who is no longer funding the club as he seeks to sell his majority shareholding to 777 Partners. The takeover by the controversial American investment firm has not yet been confirmed by the Premier. It remains to be seen whether the latest charge for the 777 prompts the withdrawal of interest.
