Premier League clubs are permitted to lose a maximum of £105m over a three-year period; Everton were deducted 10 points in November for a breach of profitability and sustainability rules, which the club are appealing
Tuesday 16 January 2024 10:17, UK
Everton and Nottingham Forest have been charged with breaching Premier League Profitability and Sustainability Rules.
Premier League clubs are permitted to lose a maximum of £105m over a three-season period (£35m a season). Due to Forest spending two seasons in the Championship within the latest assessment period, the maximum loss they were permitted was £61m.
The Premier League says both clubs have confirmed they are in breach of the rules for the assessment period ending season 2022/23.
Their cases have now been referred to the chair of the judicial panel, who will appoint separate, independent commissions to determine the appropriate sanction. Punishments could include a fine, points deduction or other sporting sanction.
In November, Everton were deducted 10 points - the largest sanction in the history of the Premier League - for a breach of the profit and sustainability rules. The club are appealing against their punishment.
In response to the latest charge, Everton criticised a "clear deficiency in the Premier League's rules".
Their statement read: "The Premier League does not have guidelines which prevent a club being sanctioned for alleged breaches in financial periods which have already been subject to punishment, unlike other governing bodies, including the EFL.
"As a result - and because of the Premier League's new commitment to deal with such matters "in-season" - the club is in a position where it has had no option but to submit a PSR calculation which remains subject to change, pending the outcome of the appeal.
"The club must now defend another Premier League complaint which includes the very same financial periods for which it has already been sanctioned, before that appeal has even been heard. The club takes the view that this results from a clear deficiency in the Premier League's rules.
"Everton can assure its fans that it will continue to defend its position during the ongoing appeal and, should it be required to do so, at any future commission - and that the impact on supporters will be reflected as part of that process."
Meanwhile, Nottingham Forest said they intend to "continue to cooperate fully with the Premier League on this matter and are confident of a speedy and fair resolution".
Sky Sports News' chief reporter Kaveh Solhekol:
"These rules are designed to deal with these cases very, very quickly. They are fast-track, new, streamlined rules.
"These accounts went in on December 31, two weeks later we're hearing Everton and Nottingham Forest are in breach of the rules. The clubs have two weeks to respond to these charges and pretty quickly two separate independent commissions are going to be set up. And within 12 weeks these independent commissions will have finished their hearings - which last between one and five days - and a week after that we will get the decision.
"By April 12 we will have the decision in these cases. Then the clubs will have seven days to decide whether they want to appeal.
"If they do want to appeal the final verdict must be in by May 24 - five days after the end of the season."
Nottingham Forest manager Nuno Espirito Santo spoke on Tuesday morning for the first time since the charge was brought against the club.
"We are all concerned in the club but me as a coach, my job is to prepare the team we have a match tomorrow and this is what we are focused on," he said at his pre-match press conference ahead of Wednesday's FA Cup replay against Blackpool.
Asked if he was aware of the situation when he was appointed last month, he said: "All the conversations we have in meetings are private. I understand this is the news but at the same time, it is not my concern. I have to focus, everyone has to wait for the decision to come and when it comes we have to deal with that.
"The players know the situation but I'll tell them exactly what I'm telling to you. Let's forget about this and focus on our job."
Nuno stressed the club's January transfer plans wouldn't change following the charge.
"No, not all. It doesn't change anything," he said. "We have to continue our work. The balance of the squad is important. We have to organise the squad. The idea is to try to improve, it's not easy, especially in this window but we are working on that."
Sky Sports News' Vinny O'Connor:
"What we've been hearing from those close to the club is that when it came to that PSR figure Everton submitted, they're pretty unhappy with that figure. They're in disagreement with the Premier League over the parameters when it comes to the PSR calculation.
"For example, payments on the [new] stadium not being written off against PSR and mitigating factors not being taken into account, such as the war in Ukraine and how it cost them a £200m naming-rights deal for the new stadium, along with other commercial deals associated with USM [the sanctioned company owned by Alisher Usmanov]
"They're also unhappy this charge has been brought before the conclusion of the appeal process for that initial 10-point deduction.
"There is also the argument regarding double jeopardy and Everton being punished twice for breaches in the same timeframe."
Sky Sports News' Geraint Hughes:
"Forest have been much more consolidatory in tone. They will be looking for mitigation. Their losses are significantly less than they would have been allowed had they been in the Premier League for that three-year accounting period. They've had a very ambitious owner, who has looked to get the team out of the Championship and embed itself in the Premier League.
"There are other mitigating factors in terms of the accounting period. Could it be aligned with the transfer window? Had Brennan Johnson's transfer on Deadline Day in September happened in June, the profit made - probably significantly less - would have been included and Forest would not be in breach of PSR.
"They were trying to do the best for the club, maximise an asset and get as much money as they could. There was a £35m bid from Brentford in June, they sold him in September for £47.5m to Tottenham."
In February 2023, Manchester City were charged by the Premier League with numerous alleged breaches of financial rules. The alleged breaches span a period from the 2009/10 season to the 2017/18 campaign. The club are alleged to have breached league rules requiring provision "in utmost good faith" of "accurate financial information that gives a true and fair view of the club's financial position".
In August 2023, it was announced the Premier League is investigating Chelsea for potential financial rule breaches during Roman Abramovich's ownership of the club.
Sky Sports News' chief reporter Kaveh Solhekol:
"Manchester City deny any wrongdoing. They were hit with 115 charges. They're going to defend themselves against those charges. They say they've done nothing wrong. It's a hugely complex case. I know it feels like there's not much going on as far as that case is concerned, but there is a lot going on behind closed doors.
"The charges go all the way back to 2009, so it would be unfair to compare Manchester City's case to what is going on with Everton and Nottingham Forest.
"Chelsea have spent so much money, almost a billion euros on players over three transfer windows but sometimes people forget that Chelsea have also recouped a lot of money from selling players. They've raised something like £500m from selling players.
"All these clubs had to submit their accounts to the Premier League for this new cycle and they were all fine, they all passed - apart from, on the face of it, Everton and Nottingham Forest."
In the simplest terms, when every Premier League team tots up their annual accounts, they can have made a loss no greater than £105m across the previous three seasons.
Clubs can only lose £15m of their own money across those three years. So that's no more than £15m extra on outgoings like transfer fees, player wages and, in a lot of clubs' cases, paying off former managers compared to their income from TV payments, season tickets, selling players and so on.
The other £90m of any £105m must be guaranteed by their owners buying up shares, known as 'secure funding', and essentially means bankrolling the club.
