Nottingham Forest docked four points for financial rules breach

Nottingham Forest have been docked four points for breaching Premier League profit and sustainability rules.

An independent commission found Forest’s losses to 2022-23 breached the threshold of £61m by £34.5m.

The immediate loss of points means they drop below Luton Town into the Premier League’s relegation zone.

Forest are the second top-flight team to be penalised for PSR breaches after Everton lost 10 points in November, which was reduced to six on appeal.

Forest, who are likely to appeal against the ruling, had a hearing on 7-8 March.

Premier League clubs can lose £105m over three seasons – £35m per campaign – but Forest’s maximum loss was only permitted to be £61m because they spent two years of the assessment period in the Championship.

The commission found Forest demonstrated “exceptional cooperation” with the Premier League during the process.

The reasoning for the four-point deduction has been outlined in the commission’s written findings.

Forest were set to be hit with a six-point deduction – three points for the initial breach and a further three for the size of the breach – but their “early plea” and “cooperation” saw that reduced to four points.

The league’s rules state any appeals process should “conclude no later than and if possible some time before 24 May” – five days after the season finishes.

Forest lost an average of £3m across 2020 and 2021 with a further £40m loss in 2022 and £52m in 2023, amounting to a total of £95m.

They were promoted in May 2022 and signed a British-record 22 new players that summer and made five loan signings. Their net transfer spend over the 2022-23 season was £142.8m.

In terms of outgoings, Forest sold two players for a fee, loaned out nine and released two.

Forest were charged in January and the Premier League said in a statement that both they and Everton “confirmed that they are in breach of the league’s profitability and sustainability rules”.

Forest, who hired leading sports lawyer Nick de Marco to defend them,based their case around six points of mitigation but all six were disputed by the Premier League.

The sale of Brennan Johnson to Tottenham Hotspur in September was seen as the “golden mitigation” by Forest.

The move, worth more than £45m, took place after the accounting deadline but Forest argue selling Johnson at a later date allowed them to earn a higher fee than if they had sold him by 30 June.

The written reasons state Forest received an offer from Atletico Madrid of 50m euros (£42.7m) for Johnson on 30 June and counter offered with 65m euros (£55.6m) on the same day, after which discussions “did not progress further”.

The commission concluded the timing of when Johnson was sold was a business decision and not a mitigating factor.

After the charge two months ago, Forest said they were “confident of a speedy and fair resolution”.

Everton are waiting on a potential second punishment, relating to the assessment period ending with their 2022-23 accounts.

Manchester City were also referred to an independent commission in February 2023 after more than 100 alleged rule breaches.