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Nottingham Forest’s Premier League Point Deduction Explained

Nottingham Forest became the second club to receive a points deduction from the Premier League after breaching their Profit and Sustainability Rules. Why were they deducted four points, what’s next and can they beat the drop?

After months of uncertainty, Nottingham Forest finally have some clarity over their PSR predicament. Yet another asterix in this Premier League season, the Reds four-point deduction seeing them drop into the bottom three, one point and place behind Luton Town.

The deduction didn’t seem to go down too well with the club, a feisty statement released on Monday night expressing their “disappointment” in the decision and how “trust and confidence” with the PL has been “harmed.” In a 52-page resource, the independent commission handling the case explained their penalisation of Forest following their hearing on March 7th and 8th.

Why have they been charged?

It’s not a simple answer.

Forest have been charged with overspending by over £35million in a three-year period, containing the 2020/21, 2021/22 and 2022/23 seasons.

In March 2023, the club were in dialogue with the PL and disclosed their financial status, leading up to the submission of accounts for the period ending in June of that year. Their proposals included a Covid add-back allowance of losses due to the virus of £12m, a £20m allowance in contractual bonuses to its playing squad due to promotion, along with prize money for a projected finishing place of 12th position.

Three months later, the PL responded, stating that they would not allow the club to claim allowance for promotion costs, while only allowing £2.5m of the Covid losses, and the club finished 16th in the table.

The Reds ended up with losses of £95m which exceeded the allowed number of £61m, where the £35m number comes from. Accounts from that period were submitted on 31st December 2023, with Forest admitting in an email to breaching the rules, claiming their case differed from Everton’s due to full cooperation and mitigating circumstances.

The process of the investigation

A key thing to note is that Forest were fully cooperative and transparent with the PL throughout the process, going above and beyond to submit required documents and be present for meetings.

This allowed the hearing to get underway with relative swiftness, as the club were in no way trying to block or delay the hearing. The commission was made up of three people, of whom had the power to issue warnings all the way to expulsion from the league.

Various factors were considered by the PL, taking into account the EFL’s previous disputes and other cases of financial breaches. The PL board viewed Forest’s breach as “a serious matter requiring a substantial points deduction,” expressing how they felt the Reds had gained a sporting advantage that had to be eradicated.

Both the club and the league concluded that any deduction was to protect the league’s integrity, rather than to punish Forest.

A “significant” breach is what the commission claimed Forest had admitted to, leading undoubtedly to a points deduction. The standard deduction for insolvency (liquidation) is nine points, so any deduction Forest would sustain should be contrasted to that.

Forest claimed six mitigating factors that should be considered when discussing their breach. They included Forest’s “unique position” being the only club of the 20 in the league that didn’t benefit from parachute payments or being in the league the season before, a lack of sporting advantage due to the breach, the clubs’ positive history with regard to financial rules and the allowances mentioned previously that the league, in part, rejected.

A further factor was the sale of “Player A” (a sly way of spelling Brennan Johnson) occurring after the PSR deadline, with Forest turning down bids for the player in the allowed time in favour of waiting until deadline day to get his best value, thus falling outside the PSR deadline of June 30th. Their final reason for mitigation was their cooperation with the league.

It became clear that the commission showed Forest a lot more sympathy towards the mitigating factors than the PL did, but ultimately only two mitigating factors were accepted. They were Forest’s cooperation throughout the process and the fact they made an early guilty plea, helping to speed the process along.

This resulted in Forest being deducted three points for a “significant” breach, a further three for the scale of the breach, but with two points handed back due to the mitigating circumstances, leading to the deduction of four points.

Why Forest’s punishment differs from Everton’s.

Everton were mentioned throughout the document, like a slimy ex you just can’t get off your mind.

The commission did acknowledge that the Toffees had breached PSR by less than Forest did, leading to many asking why Forest’s punishment was smaller.

In the reasoning for Everton’s initial 10-point deduction, there is no clear guideline as to the specifics of the deduction. So, it must be inferred.

The clear contrast between the cases is the clubs’ cooperation. As mentioned, Forest were happy to go out of their way to support the league with their investigations, leading to the mitigation of two points for this and their early plea.

Everton were a different story.

As relegation threatened them for the first time in PL history, any points deduction would have likely proved fatal, with the Toffees only surviving by two points.

Throughout both clubs' hearings, it was made clear that Everton made a seemingly deliberate attempt to delay last years' hearing until this season, with their case not being heard until October 2023. The PL documented aggravating factors in Everton’s hearing which included the ignoring of repeated warnings and, crucially, the fact Everton submitted misleading information to the PL about stadium funding and the potential sale of “Player Y”.

This contrasts Forest’s case, where the league did not submit any aggravating factors against the club.

Forest got points back due to their positive contributions, so a suggestion that Everton may have seen extra points lost due to their unruly behaviour doesn’t seem too unfair or unrealistic.

What’s next for Forest?

Supporters of the Reds have been crying out for some clarity. Finally, here it is.

Outscore Luton Town by two points in their final nine games and they stay up. That makes Luton’s late equaliser against them at the weekend look even more sickening.

Forest could and probably will appeal the decision. As a match-going fan, I would rather Forest accept the decision and move past it, move on. After all, if they can’t outscore Luton between now and the end of the season, do they deserve to stay up anyway?

This decision has the potential to unite the fans, players and management in a way not seen since Steve Cooper’s departure. A siege mentality. After all, look at Everton’s form after their initial deduction, regaining most of the points they lost after just five games.

Plus, who’s to say that the appeal won’t result in a further deduction? That would be such a Forest thing to do.

Four points. It’s not ideal, but it could have been worse, and it certainly isn’t insurmountable.

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