Nottingham Forest receive four point deduction over PSR breaches, drop into Premier League relegation zone

Nottingham Forest have been plunged into the Premier League’s relegation zone after being handed a four point penalty for breaches of the league’s Profit and Sustainability Rules (PSR).

Having reported losses that exceeded the maximum permissable amount — $43.9 million over the $77.6 million limit afforded to a club who had spent two years in the  Championship — Forest were reported to an independent commission in January, who concluded that there were insufficient mitigating circumstances to allow them to avoid a sanction that could yet have major ramifications on the table come the end of the season. The commission concluded that Forest should be handed an initial three point sanction for the breach in addition to a further three for the severity of it. Two points were added back on to Forest’s tally for their early plea and co-operation.

The club have 14 days to decide whether they will launch an appeal. Their statement did not confirm their intentions to do so however it did not that Forest were “extremely dismayed by the tone and content of the Premier League’s submissions before the commission”, adding that the league had sought an eight point penalty for the club.

Forest had not played Premier League football since 1999 and had only a short amount of time to build a squad ready for the top flight after winning the Championship playoffs. “Of wider concern for all aspirant clubs is the disturbing effect this decision will have on the operation of the player trading mode,” said a Forest statement. “This is the only model by which clubs outside of the small group at the very top end of the Premier League can realistically advance up the football pyramid.

“The rationale of the commission is that clubs should only invest after they have realised a profit on their player development. This reasoning destroys mobility in the football pyramid and the effect of the decision will be to drastically reduce the room for manoeuvre for all such clubs, leading to the stagnation of our national game. We believe that the high levels of cooperation the club has shown during this process, and which are confirmed and recorded in the commission’s decision, were not reciprocated by the Premier League.”

Forest have spent heavily since their promotion to the Premier League in the summer of 2022, recruiting 55 players on permanent or loan deals at a combined cost in excess of $320 million. What Forest termed a “significant mitigating factor” in their defense against PSR charges was their unwillingness to sell Brennan Johnson before their financial year ended. They would subsequently receive around $60 million from Tottenham on deadline day for their academy graduate.

In this instance the commission found no grounds for leniency, noting that the club had received offers from both Atletico Madrid, worth $54.4 million and submitted before the PSR deadline, and Brentford, whose second offer on July 24 was worth $44.5 million. They made a third bid nearer to the September deadline came in at $50.9 million. The commission was critical of Forest for not pushing to conclude a deal nearer to June 30, saying: “The commission notes the actual “near miss” could be that Forest nearly missed selling [Johnson] in the summer window altogether – it was cut extremely fine.”

They subsequently added: “The commission understands all clubs’ desire to sell their players for the most they can achieve. That is a sensible commercial decision to take for any business. However, the commission here concluded that for Forest respecting the PSR regime and looking to make the miss as near as possible was a less important factor, when compared to maximising value/profit.

“This business decision flies in the face of mitigation. In all these circumstances the commission determines that it cannot be rewarded as a mitigating factor.”

Nuno Espirito Santo’s side now find themselves one point behind Luton Town, who have leapfrogged out of the bottom three, with nine games left to play. Those two sides played out a 1-1 draw on Saturday in which Luke Berry scored an 89th minute equaliser at Kenilworth Road. Forest have won just once in the league in 2024 and picked up a total of just five points from nine matches.

In addition to their own form they will have to keep a close eye on the proceedings of a separate independent commission which is assessing the finances of Everton. The Toffees have already been handed a six point penalty for PSR breaches up to the 2021-22 season and are now facing further charges in relation to their losses in the 2022-23 campaign.