Nottingham Forest may receive a deduction of points for violating the Premier League’s profit and sustainability rules (PSR), while Everton also faces potential point losses for another violation of these rules.
The teams have a two-week period to respond to their accusations before undergoing a trial with a neutral committee that will determine any consequences. Forest can anticipate finding out their outcome in the beginning of April and will be able to challenge it. The well-known sports attorney, Nick De Marco KC, has been hired to defend their situation.
In November, Everton received a points deduction of 10 for exceeding their budget by £19.5m in the 2021-22 season. They are currently waiting for a decision on their appeal. This additional charge is regarding their financial records for the 2022-23 season.
The possibility of Everton facing point deductions twice in one season due to financial violations is a concern, but the result of their appeal will greatly impact the current accusation. The exact date of the appeal has not been determined.
If Everton’s appeal is successful and the mitigating circumstances presented by the club, such as interest on loans for a new stadium and the loss of commercial deals related to Alisher Usmanov after the UK government placed sanctions on him, are accepted, it would reduce the severity of the violation not just for the period until 2022, but also until 2023.
If the appeal commission upholds the initial conclusions and dismisses Everton’s arguments, the club may receive another deduction of points for the 2023 season. According to Premier League regulations, a solution must be reached before the end of the season.
The Premier League has reported that both Everton and Forest have acknowledged their violation of the league’s financial guidelines. This occurred because they incurred losses beyond the allowable limits for the evaluation period until the 2022-23 season.
Clubs are permitted to lose £105m over a three-year period – in effect £35m a season – but because Forest spent two seasons in the most recent cycle in the Championship, their losses are capped at £61m, equating to £13m in each of 2020-21 and 2021-22 and £35m last season.
Forest’s defense will likely revolve around their choice to delay the sale of Brennan Johnson in order to receive the highest possible price for the academy graduate. This fee would be considered pure profit in terms of PSR. Johnson was eventually sold to Tottenham for £47.5m on deadline day in September, two months after the PSR compliance deadline. The club believes that if they had sold Johnson before 30 June, they would have received a lower fee. Despite this potentially putting them in compliance with allowed losses, they will argue that it was in their best interest for long-term sustainability to maximize their profit.
After being promoted to the Premier League in 2022 through the playoffs, Forest has invested approximately £250m on 43 players in order to form a strong team capable of competing at this level. Despite bringing in 40 players, the club did not have many valuable assets, making Johnson’s departure a notable loss. Last summer, Forest received several written offers of around £30m for Johnson, but they chose to wait for a better deal.
Forest has not made any new signings this month as they are being careful in their approach to the market. They must first make sales before they can think about strengthening Nuno Espírito Santo’s team, who are currently three spots and four points above the relegation zone.
Nottingham Forest has recognized the announcement made by the Premier League stating that the club has been charged with violating the league’s rules on profitability and sustainability. The club plans to maintain full cooperation with the Premier League regarding this issue and remains optimistic that it will be resolved fairly and efficiently.
Despite being one place and one point above the relegation zone, Everton may face further consequences for their actions. This is despite already receiving a 10-point deduction for three of the past four years, which has led to their current charge. The club has expressed concerns about facing double punishment with the Premier League, but has been advised that it is up to the independent commission to decide. Unlike the EFL, the Premier League does not have any rules in place for limiting losses in years that have already been penalized.
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In a statement issued in response to Monday’s charge, Everton expressed disapproval of the league’s regulations, citing a timeframe spanning the 2019-2020, 2020-2021, 2021-2022, and 2022-2023 seasons. This includes financial periods (2019-2020, 2020-2021, and 2021-2022) during which the club has already been penalized with a 10-point deduction. The club is currently in the process of appealing this punishment.
The Premier League does not have rules that prohibit a club from facing consequences for breaking financial regulations that have already been punished, unlike other governing bodies like the EFL. Due to the Premier League’s recent promise to handle these issues during the season, the club has had to submit a PSR calculation that is subject to change as the appeal is pending.
The team is facing another accusation from the Premier League, covering the same financial periods that they have already been punished for, even though their appeal has not yet been considered. The team believes that this is due to a flaw in the rules of the Premier League.
Everton feels that they are facing unfair consequences due to financial losses related to the development of their new stadium at Bramley Moore dock. Additionally, they ended partnerships with businesses linked to Usmanov following Russia’s invasion of Ukraine in February 2022. For instance, USM had previously agreed to a £200m deal for naming rights of the new stadium. The absence of these business agreements had a significant impact on Everton’s financial records for the year 2022-23.
The club has not released their most recent financial report, but it has been submitted to the league. It is believed that the losses are due to a decrease in commercial earnings and stadium expenses, rather than spending on player transfers. Out of all current Premier League teams, only Brighton and Luton have spent less on players in the last five years than Everton.
The owner, Farhad Moshiri, is no longer providing financial support to the club while trying to sell his majority shares to 777 Partners. The Premier League has not yet approved the takeover by the controversial American investment firm. It is uncertain if the recent charge will cause 777 to back out of their interest.
Source: theguardian.com
