Nottingham Forest have been charged with breaching the Premier League's financial rules; Forest have invested heavily in the transfer market under owner Evangelos Marinakis; This article was first published on January 15
Monday 18 March 2024 15:18, UK
Sky Sports News senior reporter Rob Dorsett explains why Nottingham Forest have been charged with a breach of the Premier League's Profitability and Sustainability Rules - and why the club and the Premier League are at odds over the decision.
So why have Forest been charged?
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 have been measured against a combination of Football League and Premier League rules which meant they couldn't return losses greater than £61m.
That's what they have been charged with, yes.
It's certainly true that Forest have been busy participants in the transfer market over the last few years. After being promoted to the Premier League in 2022, they signed 21 players that summer and then another seven on Deadline Day alone in September.
Our understanding is that Forest's hierarchy knew they were in breach...
Yes. Two, in fact.
The first 'but' is that Forest believe they were only in breach for two months - between filing their accounts on June 30 last year and September 1 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 that the dates for Premier League accounting should be aligned with the transfer window. Let's come back to that later.
And the second 'but' is that Forest believe not only would they have been within FFP and the Premier League's sustainability rules had they sold Johnson in June, but selling Johnson in September was in the 'spirit' of those sustainability rules.
Because deferring his sale ultimately generated more money: whereas Brentford offered £35m for Johnson in June, Tottenham eventually paid a club-record £47.5m on Deadline Day. Forest's argument is that by holding out for their asking price they were respecting the spirit of the league's substantially rules.
In short, Forest's case for the defence is that it wasn't in the club's best interests to sell their prized asset for a reduced fee just to meet what they see as an arbitrary deadline.
No.
Boiled down, the Premier League's perspective is that rules are rules.
Again, from the Premier League's perspective, the answer is no. In the league's view, the rules around spending limits will become utterly meaningless and redundant if clubs are able to circumvent them even for a short period of time - and it's up for debate whether two months can be considered a short period of time.
The Premier League's counter-argument will be that the whole point of the Profitability and Sustainability Rules is to try to discourage short-termism and risk-taking.
Yes, Forest might have acquired a higher price for Johnson in the final hours of the transfer window than in June. But what if Johnson had suffered an injury in late August? Or if talks between the player and Tottenham had broken down?
Forest, like all clubs, had a three-year period in which to adhere to the rules. The league will argue that Forest's adherence shouldn't have boiled down to a Deadline Day sale.
The case will be heard by an independent commission - just as Everton's was last year before the commission handed down a 10-point deduction in November.
At the start of this season, the Premier League introduced a new system that means all 'straightforward' breaches will be fast-tracked and finalised by April, and any points deductions will be applied during this season (which is in contrast to Everton's punishment, which was meted out for this season despite the breach occurring two seasons ago).
But Forest, of course, don't regard their alleged breach as straightforward.
