Profitability and Sustainability charges: What happens now that ...
Sky Sports News chief reporter Kaveh Solhekol 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.
Solhekol addresses the following key talking points...
Why Forest's points deduction was less than EvertonThe validity of the Brennan Johnson defenceAre the current PRS rules fit for purpose?When Everton will learn fate for second PSR breachHow relegation spots could be decided after final dayWhy the Man City and Chelsea cases have dragged onCould Forest's fate be decided after the end of the season?
Sky Sports News Senior Reporter Rob Dorsett:
"Forrest have up to Monday next week to decide if they are going to appeal or not. Then if they do decide to appeal, two or three weeks later, that appeal hearing will happen. Two or three weeks after that, we will get the final decision.
"So, any suggestion that Nottingham Forest’s situation could go beyond the end of the season, and the ultimate deadline of May 25, just simply won’t happen – Forest’s situation will be dealt with by the end of April, so it won’t go into the final weeks of the season. It is still pretty late in the season though.
"Everton’s situation is slightly different. They have not even had their independent commission hearing yet, so that could run close, but theirs is a more complicated situation as they have already been charged and punished already."
The Premier League said Forest admitted breaching Profitability and Sustainability Rules (PSR) by £34.5m above their permitted threshold of £61m.
Clubs are usually allowed maximum losses of £105m over a three-year assessment period but this is reduced by £22m per season for any seasons within the period spent in the Championship.
Forest drop into PL relegation zone after points deductionForest points deduction reaction LIVE!Stream Sky Sports with NOW | Get Sky SportsTransfer Centre LIVE! | Papers - latest headlinesAnd Forest breached that £61m limit?
That's what they have been charged with, yes.
In their written reason, the Premier League considered Forest's PSR calculation results in a loss of £95,536,000 across the period. That breaches the £61m threshold by £34,536,000.
Why four points for Forest when their breach was bigger than Everton's?Please use Chrome browser for a more accessible video player
What I'm specifically interested in is how big the breach was. Everton's breach was £19.5m and initially they got hit with a 10-point deduction.
In the statement we've just received from the Premier League, it says Nottingham Forest's breach was £34.5m. Substantially more than Everton's breach - yet they've been hit with a deduction which is less than Everton's initial 10-point deduction.
However, Forest pointed out to the Premier League that Everton's total losses for the three-year period were around £124.5m compared to their own losses of around £95.5m.
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The deduction drops Forest into the Premier League's relegation zone, leaving them 18th with nine games to play.
People will be asking why are they only getting a four-point deduction?Image: Forest have made dozens of signings since their promotion
The Premier League say Nottingham Forest basically co-operated fully during the whole case from beginning to end. I'm thinking now, was that one of the reasons why they've been dealt with relatively leniently compared to how Everton were dealt with to begin with?
Forest have seven days to appeal - but will they?Image: The commission noted Forest’s breach was “serious”
Forest have seven days to decide whether they want to appeal or not. A lot of people will think it's a no-brainer. Everton got it reduced from 10 to six points, give it a go, what have you got to lose?
A new three-person panel will hear that appeal.
But at an appeal you can't introduce any new evidence. You can just argue your case again and hope for the best. Forest have already admitted they've broken the rules.
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From a football point of view, there may be people within Forest who may be saying this cloud has been hanging over us for a long, long time. Let's just take the four points. We know what we need to do to stay up. We've still got nine games to play. We've got the squad to be able to stay in the Premier League. This has been too much of a distraction.
It's a big decision they need to take, whether to appeal or not.
What was Forest's 'Brennan Johnson defence'?Image: Nottingham Forest sold Brennan Johnson to Tottenham for £47.5m
Nottingham 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.
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.
The Premier League's counter-argument?
That 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.
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Nottingham Forest would still be outside the relegation places had they not conceded an 89th-minute equaliser to fellow relegation rivals Luton on Saturday.
If Nuno Espirito Santo's side had held on for the win at Kenilworth Road then they would still be in 17th above Luton and two points clear of safety.
Instead, Luke Berry's late equaliser means Forest have now dropped below Luton into the bottom three and are a point behind the Hatters.
Are spending rules fit for purpose?Datawrapper This content is provided by Datawrapper, which may be using cookies and other technologies. To show you this content, we need your permission to use cookies. You can use the buttons below to amend your preferences to enable Datawrapper cookies or to allow those cookies just once. You can change your settings at any time via the Privacy Options. Unfortunately we have been unable to verify if you have consented to Datawrapper cookies. To view this content you can use the button below to allow Datawrapper cookies for this session only.
We could have a much bigger debate about these spending rules.
A lot of people in football will tell you these rules are not fit for purpose, they were brought through in a rush, not necessarily thought through enough, we've seen they are not working and that's why so many Premier League clubs want them replaced as soon as possible.
Everyone accepts there should be some sort of financial fair play rules, but these rules as they stand have proved to be very controversial. We've seen that they've caused lots of problems this season.
There's a general acceptance that they are going to be replaced as early as this summer. I don't think FFP rules are going away at all but we'll have a new system coming in soon.
When are we going to learn outcome of Everton's second PSR breach?There will now be a new three-person panel who will hear Everton's second charge. The Premier League never give any information about when these hearings are. That is totally confidential.
But my understanding is that the Nottingham Forest case was going to be dealt with first and then we are going to have the second Everton case dealt with.
It's very likely that the Everton hearing is going be this week or next week and we should know the decision from that independent panel in the next two or three weeks.
Is there a possibility that we'll come to the end of the season not knowing after the final day who has been relegated?If you look at the process as it stands, relegation might not be sorted on the last day of the season. Those are the rules as they stand. But I sense from the Premier League that there is a real impetus to get these cases dealt with as quickly as possible.
In the Forest case, the two-day hearing was 11 days ago. Eleven days later, we've got the decision. Now it is up to Forest over the next seven days whether or not they want to appeal.
If we stick to the same timeframe for Everton's second charge, then it looks like this will be sorted by the final day of the season. But there is still the possibility that if these cases drag on, we could get to a point where on the final day of the season, we don't know know who is staying up and who is being relegated.
What about Man City and Chelsea?
Everyone knows that in Manchester City's case, they're facing 115 charges. This is a very serious case and City completely deny that they have done anything wrong.
But I think you shouldn't be comparing City with what's happening with Everton and Forest. With the latter, it is about PSR rules. They're about timetables and when you have to submit your accounts.
The rules are very clear. There's been a real drive to get these cases sorted out in-season. Manchester City's case is historical and goes back 12 seasons. It's far more complex and it's not just about PSR.
As far as Chelsea are concerned, they haven't been charged. The Premier League are investigating a few issues which came up when Roman Abrahmovich was forced to sell Chelsea. The new owners noticed some discrepancies in the books related to payments that were made which could be connected to transfers.
That is what the Premier League are investigating so I don't think it's fair to compare the cases but I can understand why people are asking, 'what is going on when other cases seem to be dragging on?'
