by Nottingham Forest face a potential points deduction after being accused of breaching the Premier League’s profitability and sustainability rules (PSR), and Everton could lose further points after being accused of a further breach of the same rules.
Clubs have 14 days to respond to their allegations before facing a hearing by an independent panel that will decide on any punishment. Forest will be able to learn his fate at the beginning of April and will have the right to appeal. Prominent sports attorney Nick De Marco KC has been hired to argue his case.
Everton were docked 10 points in November for £19.5m overspending in 2021-22 and are awaiting the outcome of their appeal. This second charge relates to its 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 big influence on the latest charge. A date for the appeal has not been confirmed.
Should the appeal rule in Everton’s favor and accept the mitigating circumstances the club cited for its losses, such as interest on loans for a new stadium and the loss of business deals involving oligarch Alisher Usmanov after the UK government would the United Kingdom impose sanctions? , that would reduce non-compliance not only for the period until 2022 but until 2023.
If an appeal committee confirms the original findings and rejects Everton’s arguments, the club faces the possibility of a second points deduction for the 2023 period. A solution must be found at the end of the season according to Premier guidelines League.
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 due to suffering losses above the permitted thresholds for the evaluation period ending the 2022-23 season.”
Clubs can lose £105m over a three-year period (in fact £35m per season), but because Forest spent two seasons in the most recent Championship cycle, their losses are capped at £61m, which is equivalent to £13 million each. from 2020-21 and 2021-22 and £35 million last season.
Forest’s defense is expected to rest on its decision to delay the sale of Brennan Johnson to ensure it receives the highest possible price for the academy graduate, whose fee, in PSR terms, would be considered pure profit. The striker was sold on deadline day last September for £47.5m to Tottenham, two months after the deadline to comply with the PSR. Had Forest sold Johnson before June 30, the club believe they would have received a lower fee. Although that would have put them on the right side of allowable losses, they are expected to argue that it was better for their long-term health to maximize their profits and make them more sustainable.
From promotion from the Championship to the playoffs in 2022, Forest have spent around £250m on 43 players to create a team capable of competing in the Premier League. Forty players have arrived, but the club had few salable assets, making Johnson’s departure significant. Early last summer, Forest received a number of written offers of around £30m for Johnson but knew they could get more if they bided their time.
There are still no arrivals at Forest this month as the club take a cautious approach in the market, needing to sell before they can consider joining Nuno Espírito Santo’s side, who sit three places and four points above the relegation zone .
“Nottingham Forest acknowledges the Premier League’s statement confirming that the club has been accused today of breaching the league’s profitability and sustainability rules,” Forest said. “The club intends to continue to cooperate fully with the Premier League in this matter and is confident of a swift and fair resolution.”
Everton, one place and one point above the relegation zone, can be punished again even though the 10-point deduction was for three of the four years that have resulted in the latest charge. The club has raised concerns about double jeopardy with the Premier League but has been told it is a matter for the independent commission that will consider the latest charge. Unlike the EFL, the Premier League has no guidelines to limit losses in years that have already been subject to a sanction.
Everton criticized the league rules in a statement reflecting Monday’s allegation: “This relates to a period covering the 2019-20, 2020-21, 2021-22 and 2022-23 seasons. It therefore includes financial years (2019-20, 2020-21 and 2021-22) for which the club has already received a 10-point penalty. The club is currently appealing that sanction.
“The Premier League has no guidelines preventing a club from being sanctioned for alleged breaches in financial years that have already been sanctioned, unlike other governing bodies including the EFL. As a result, and due to the Premier League’s new commitment to address these matters “during the season”, the club finds itself in a position where it has had no choice but to present a PSR calculation which remains subject to change, in waiting for the result. of the appeal.
“The club must now defend another Premier League complaint that includes exactly the same financial years for which it has already been sanctioned, even before that appeal has been heard. “The club believes this is due to a clear deficiency in the Premier League rules.”
Everton believe they are being unfairly punished for losses associated with the construction of their new stadium at Bramley Moore Dock and for ending sponsorship deals with companies linked to Usmanov after the Russian 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 accounts have not been published, only submitted to the league, but the losses are understood to be related to lost commercial income and stadium costs, rather than spending in the transfer market. Only Brighton and Luton, of the current Premier League clubs, have spent less on players in the last five years than Everton.
Its finances remain in a perilous state under owner Farhad Moshiri, who is no longer funding the club as he attempts to sell his majority stake to 777 Partners. The Premier League has yet to ratify the acquisition by the controversial American investment firm. It remains to be seen whether the latest charge prompts 777 to withdraw its interest.
