Financial Fair Play (FFP) struck the second club in the Premier League this season. Nottingham Forest had four points deducted for breaching the FFP’s profit and sustainability rules. This leaves Nottingham Forest now one point behind 17th-placed Luton Town in the relegation zone.
Forest have stated that they will appeal this decision. ” After months of engagement with the Premier League and exceptional cooperation throughout, this was unexpected and has harmed the trust and confidence we had in the Premier League,” the club said in a statement.
So what is the case against Nottingham Forest that got them this four-point deduction? We explain.
Nottingham Forest FFP Ruling
First, we need to understand the rules under which Forest was penalised. Under the profit and sustainability rules, Premier League clubs can have a loss of £35 million per year for three seasons, totaling £105 million. However, Forest spent two years in the Championship before earning promotion to the Premier League, which meant that their total loss could only be £61 million.
The commission found that Forest’s total loss was £95.5 million, £34.5 million more than the threshold. This was 77 per cent more than the margin breached by Everton earlier in the season, for which they were docked ten points (later reduced to six).
Under the rules, the commission first recommended a ‘six-point’ deduction: three for the breach and the rest for the margin by which they breached the threshold. However, in the commission’s own words, Forest were extremely helpful in the investigation, which earned them only a four-point deduction.
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Most of the £95 million loss was accrued in the 2023 transfer window when Forest earned a promotion to the Premier League. To strengthen their squad, the club went on a shopping spree, buying 22 new players. They ended the transfer window with a net transfer spend of more than £140 million.
Read More: FFP Profit and sustainability rules affect on youth academies
Can the ruling be overruled?
One of the major arguing points put forth by Nottingham Forest was the sale of Brennan Johnson. The deal, which was conducted in September 2023 and was worth £47.5 million, reduced their losses well within the threshold.
However, under the FFP rules, they had to conduct the sale before June 30, the deadline for reporting the accounts. Nottingham argued that selling Johnosn within the deadline would have weakened their position in any transfer negotiations, as clubs would deliberately pay far less.
“Even after the club had missed the PSR reporting deadline, it still took steps to ensure Brennan Johnson was sold before the end of the transfer window. That was a clear demonstration of our respect and support for PSR,” Nottingham said in their statement.
The commission, however, stated that they had a matching offer from Atletico de Madrid before June 30, which the club rejected. Nottingham also said that since they had played in the Championship for two years, this means that not only was their FFP threshold low, but they also didn’t receive any parachute payments.
For readers’ context, Parchure payments are payments made by the Premier League to clubs that have been relegated from the first-tier league. These payments are made over three years, and the amount is determined by the number of years a club was in the top-tier league.
Nottingham’s main argument was that a newly promoted club with a low threshold and no parachute payments would find it incredibly hard to improve their squad’s quality to allow them to compete in the Premier League.
Meanwhile, Everton are also awaiting the commission findings for the 2022-23 season spending, which would hand them further punishment.
Premier League champions Manchester City are also being investigated by an independent commission for alleged breaching of over 100 rules under the FFP.
