Nottingham Forest penalized with four-point deduction for violating Premier League financial regulations

Nottingham Forest have received a four-point deduction for breaching the Premier League’s profitability and sustainability rules (PSRs).

Forest was referred to an independent commission in January for reporting losses above the allowed amount in the three-year reporting cycle ending in the 2022-23 season.

They faced the possibility of a fine or points deduction for the breach and have now dropped to 18th in the Premier League after the four-point deduction.

This marks the second Premier League team this season to receive point deductions for a PSR breach, following Everton’s 10-point deduction in November, later reduced to six points after an appeal. Everton and Forest are facing another breach charge in January.

Forest has seven days to decide whether to appeal the sanction. The Premier League also has the option to appeal the decision made by the independent commission to increase the penalty.

The Premier League has set May 24 as the deadline for any appeals after the season ends on May 19.

What did the Premier League say?

A statement indicated that an independent commission applied a four-point deduction to Nottingham Forest FC for breaching PSRs for the 2022/23 season.

Nottingham Forest admitted the breach and was referred to the commission on January 15. The club exceeded the relevant PSR threshold by £34.5m.

The commission determined the sanction after a two-day hearing, noting the club’s cooperation throughout the process.

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What did Forest say?

A club statement expressed extreme disappointment with the imposed sanction of a four-point deduction.

The club disagreed with the Premier League’s submissions and believed the punishment was disproportionate.

Club statement.

— Nottingham Forest (@NFFC) March 18, 2024

The club criticized the Premier League’s handling of the situation and stated their cooperation was not reciprocated.

How did we get here?

Forest was referred to the commission in January for the alleged breach concerning the PSR calculation for the 2022-23 reporting period.

Forest has signed over 40 players since promotion in May 2022, with significant investment from the owner to establish the club in the top flight.

Johnson’s sale to Tottenham was key to Forest’s argument (Michael Regan/Getty Images)

The club’s argument focused on the sale of Brennan Johnson and the circumstances surrounding his transfer to Tottenham.

New guidelines have been implemented to fast-track PSR decisions for timely resolutions and penalties in the same season.

Accounts for the 2022-23 season had to be submitted earlier, with breaches confirmed soon after.

What are profitability and sustainability rules?

Premier League clubs are annually assessed for adherence to profitability and sustainability rules based on the PSR calculation.

Clubs can lose up to £105m over three seasons, with deductions for certain investments.

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Have there been any other cases like this?

Forest is the third club facing actions for PSR breaches after Everton and Manchester City.

Chelsea’s past financial issues remain under investigation.

Transactions made under Abramovich are still under investigation (Paul Gilham/Getty Images)

Prior incidents involved points deductions for other reasons in Premier League history.

‘Frustration and disappointment for Forest’

Analysis by Nottingham Forest correspondent Paul Taylor

There is frustration and disappointment at Nottingham Forest due to the four-point deduction for breaching profit and sustainability regulations.

The club is considering an appeal after being dropped into the relegation zone.

Forest feels that they have cooperated with the Premier League and explained mitigating circumstances, particularly regarding the Brennan Johnson sale.

Amid frustration, the club understands the severity of the punishment and their current position in the league.