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Nottingham Forest drop into Premier League relegation zone after four-point deduction for PSR breach

Nottingham Forest docked four points for breaching Premier League financial rules; Forest drop to 18th in the top flight - one point behind 17th-placed Luton; Forest have seven days to appeal but Sky Sports News understands club are consulting with lawyers over whether to do so

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Nottingham Forest have been given a four-point deduction for breaching the Premier League’s profit and sustainability rules, dropping them down into the relegation zone

Nottingham Forest have dropped into the relegation zone after being deducted four points for a breach of the Premier League's Profitability and Sustainability Rules (PSR).

Forest have seven days to appeal but Sky Sports News understands the club have yet to decide whether to do so, and are consulting with their lawyers.

The club were charged in January after confirming they were in breach of the Premier League's PSR for the assessment period ending 2022/23.

Image: The bottom half of the Premier League after Forest's point deduction

The Premier League said on Monday afternoon that Forest admitted breaching PSR by £34.5m above their permitted threshold of £61m.

Clubs are usually allowed maximum losses of £105m over a three-year assessment period, but this is reduced by £22m per season for any seasons within the period spent in the Championship.

The four-point deduction moves Forest into 18th place in the Premier League, one point behind Luton, who move up to 17th.

NOTTINGHAM, ENGLAND - FEBRUARY 28: A general view of the corner flag ahead of the Emirates FA Cup Fifth Round match between Nottingham Forest and Manchester United at City Ground on February 28, 2024 in Nottingham, England. (Photo by Ash Donelon/Manchester United via Getty Images)
Image: Nottingham Forest drop to 18th in the Premier League - one point from safety

A Premier League statement read: "An independent commission has applied an immediate four-point deduction to Nottingham Forest FC for a breach of the Premier League's Profitability and Sustainability Rules (PSRs) for the period ending Season 2022/23.

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"Nottingham Forest was referred to an independent commission on January 15, following an admission by the club that it had breached the relevant PSR threshold of £61m by £34.5m. The threshold was lower than £105m as the club spent two seasons of the assessment period in the EFL Championship.

"The case was heard in accordance with new Premier League rules, which provide an expedited timetable for PSR cases to be resolved in the same season the complaint is issued.

"The independent commission determined the sanction following a two-day hearing this month, at which the club had the opportunity to detail a range of mitigating factors. The commission found that the club had demonstrated "exceptional cooperation" in its dealings with the Premier League throughout the process."

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FREE TO WATCH: Highlights from the Premier League clash between Luton and Nottingham Forest on Saturday

The commission noted Forest's breach was "serious" and stated in its conclusion: "The four points sanction is not to punish Forest so much as it is to be fair to the other clubs; to give the public confidence that when a club invests as Forest did to compete in the Premier League, it still needs to comply with the PSR threshold for losses."

The commission ruling added: "When a club like Forest took the risk of effectively ignoring the PSR warning from its finance director before the January window in 2023, and rather than looking to sell players, it added players to its squad, ultimately leaving itself with just two weeks to sell Player A [Brennan Johnson] in the summer 2023 window, such risk taking and 'sailing close to the wind' needs a proportionate sanction to maintain the integrity of the Premier League."

Nuno Espirito Santo's side have nine matches remaining this season, four of which are against sides in 14th place or below.

Forest host 14th-placed Crystal Palace on Saturday March 30 - their first game after the international break - before travelling to 16th-placed Everton, bottom side Sheffield United and 19th-placed Burnley within the next two months.

PL pushed for six-point deduction against Forest

Everton received a 10-point deduction - reduced to six on appeal - for similar breaches earlier this season.

A second complaint against the Toffees over a breach in the period up to last season is still being dealt with.

The ruling shows the Premier League pushed for a six-point sanction - with eight points as an initial figure to account for Forest's excess over the threshold being 77 per cent greater than Everton's, but discounted by two points to reflect Forest's early plea and co-operation.

In contrast Forest argued that if a points deduction was imposed, it should be "minimal", relying mainly on their "golden mitigation" - the fact that because Brennan Johnson's sale to Tottenham occurred a short period later than was necessary for the assessment period, it meant their PSR breach was a "near miss".

The commission said such an event could only have been described as a near miss "if it was truly near to the PSR deadline [June 30, 2023] or at the first available reasonable opportunity proximate to the deadline".

It added: "Forest here waited until [owner Evangelos] Marinakis gave the sale instruction on August 28, 2023 and managed to sell Player A [Johnson] on the very last day of the summer window.

"This business decision flies in the face of mitigation. In all these circumstances, the commission determines that it cannot be rewarded as a mitigating factor."

Nottingham Forest fixtures

  • Crystal Palace (H) - Saturday March 30, Premier League, kick-off 3pm
  • Fulham (H) - Tuesday April 2, Premier League, kick-off 7.30pm
  • Tottenham (A) - Monday April 8, Premier League, kick-off 8pm, live on Sky Sports
  • Wolves (H) - Saturday April 13, Premier League, kick-off 3pm
  • Everton (A) - Saturday April 20, Premier League, kick-off 3pm
  • Manchester City (H) - Saturday April 27, Premier League, kick-off 3pm
  • Sheffield United (A) - Saturday May 4, Premier League, kick-off 3pm
  • Chelsea (H) - Saturday May 11, Premier League, kick-off 3pm
  • Burnley (A) - Sunday May 19, Premier League, kick-off 4pm

Forest have seven days to appeal - but will they?

Nottingham Forest manager Nuno Espirto Santo plus club crest and owner.
Image: Nottingham Forest boss Nuno Espirito Santo (left) and the club's owner Evangelos Marinakis are hoping for Premier League survival

Sky Sports News chief reporter Kaveh Solhekol:

Forest have seven days to decide whether they want to appeal or not. A lot of people will think it's a no-brainer. Everton got it reduced from 10 to six points, give it a go, what have you got to lose?

A new three-person panel will hear that appeal.

But at an appeal you can't introduce any new evidence. You can just argue your case again and hope for the best. Forest have already admitted they've broken the rules.

From a football point of view, there may be people within Forest who may be saying this cloud has been hanging over us for a long, long time. Let's just take the four points. We know what we need to do to stay up. We've still got nine games to play. We've got the squad to be able to stay in the Premier League. This has been too much of a distraction.

It's a big decision they need to take, whether to appeal or not.

Why were Forest charged?

Sky Sports News senior reporter Rob Dorsett:

The complication starts here. Under Profitability and Sustainability Rules, commonly known as Financial Fair Play rules, Premier League clubs cannot return losses greater than £105m over three seasons.

But Forest weren't in the Premier League for the three seasons under review. Instead, they were measured against a combination of EFL and Premier League rules, which meant they couldn't return losses greater than £61m.

And Forest breached that £61m limit?

That's what they were charged with, yes.

Is there a 'but' coming?

Yes. Two, in fact.

The first 'but' is that Forest believed they were only in breach for two months - between filing their accounts on June 30 and September 1 2023, when they received the first instalment of their sale of Brennan Johnson to Tottenham.

The dates are significant because Forest - and at least one other Premier League club that we are aware of - believe the dates for Premier League accounting should be aligned with the transfer window.

The second 'but' is that Forest believe that, not only would they have been within FFP and the Premier League's PSR had they sold Johnson in June, but selling Johnson in September was in the 'spirit' of those sustainability rules.

Why did Forest argue that delaying Johnson's sale was the right thing to do?

Because deferring his sale ultimately generated more money. Brentford offered £35m for Johnson in June, whereas Tottenham eventually paid a club-record £47.5m on Deadline Day.

Forest's argument was that, by holding out for their asking price, they were respecting the spirit of the Premier League's PSR.

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