Next week, Nottingham Forest face a critical hearing where it will be decided what punishment they will face for breaking Premier League financial rules.
In a tribunal that will start on Thursday and conclude on Friday, a three-person independent panel will consider the club’s breaches of profit and sustainability regulations (PSR) over a three-year period that culminated in the club’s first season back in the Premier League in 2022-23.
The outcome of the hearing — and a decision over whether Forest will appeal — has to come before April 15.
Forest will be hoping to show that there were numerous mitigating factors behind their breaches. The club face the prospect of fines and/or a points deduction, which could impact significantly on their hopes of securing a third consecutive season of top-flight football.
The outcome of an appeal this week against similar charges by relegation rivals Everton — who saw an initial 10-point deduction for breaches during the 2021-22 season reduced to six points — provided some clues as to what Forest’s fate might be.
But a lot of uncertainty remains. Here, The Athletic answers the key questions ahead of what will be a landmark moment for Forest, regardless of the outcome.
What is the likely punishment?
One of the most interesting parts of the verdict delivered by the appeal panel that looked at Everton’s case was the section where they spoke about how there was a lack of structure or guidance from the Premier League.
A panel made up of an experienced judge, Sir Gary Hickinbottom, and two King’s Counsel lawyers, Daniel Alexander and Katherine Apps, changed Everton’s punishment, who were found guilty of breaching PSR in November.
The biggest domestic league in the game – one that generates £5.5billion ($7bn) a year – could have implemented a framework that would deliver “more predictability and transparency” in these cases of PSR breaches. “They have not done so,” said the appeal.
The verdict added: “Instead, both the Premier League and the Premier League board have left this important matter, which not only affects the position of a club subject to sanctions but also (actually or potentially) the relative position of other clubs in the Premier League, to a commission or, on appeal, to an appeal board.”
A different three-person panel will review Nottingham Forest’s case and it is not yet known who they will be, but a different group of people with — potentially — a different set of opinions and values will again be left to make a decision without the benefit of any real structure or guidance from the Premier League.
Forest manager Nuno Espirito Santo (MI News/NurPhoto via Getty Images)
Predicting what the outcome will be is little more than educated guesswork, even if what happened to Everton should offer some kind of guidance.
Within Forest, there is an expectation that there will be a points deduction, but it is hoped that it will be three points at most.
As it stands, however, there is also an acceptance that everyone, inside and outside the club, is guessing at this point because there is so little structure in place to offer guidance to the panel.
How does Forest’s case/defence differ from Everton’s?
Forest are understood to have breached by a higher figure than Everton, who had an overspend of £19.5million on their allowable losses of £105m over a three-year period.
Crucially, however, Forest’s breaches occurred over a considerably shorter time frame.
Because Forest spent two of the three years they are being assessed over in the Championship, their loss limit is lower, at £61m.
Both clubs have offered mitigation for their overspend. Everton accepted they had breached PSR but argued that there were mitigating circumstances, including the Covid-19 pandemic and their costly stadium build.
Forest’s defence revolves predominantly around the sale of Brennan Johnson, among other factors.
Forest had been told by Tottenham Hotspur that they would make a bid for the Wales international once the sale of Harry Kane to Bayern Munich was completed. In the meantime, several bids from Brentford were rejected in June, worth in the region of £30m. Forest could have sold their prize asset within the financial period in which their losses were being assessed, but only for a figure that was far below their market value for him, which was £50m. The fact Johnson was not keen on a move to Brentford might also have been a stumbling block.
Johnson ultimately moved to north London for £47.5m on deadline day, which was weeks after the accounting period on which PSR is assessed had finished.
Johnson playing for Forest last August (Jon Hobley/MI News/NurPhoto via Getty Images)
But Forest were in constant communication with the Premier League throughout that period to explain their intentions and make it clear the sale of Johnson would get them the right side of the loss limits. It would have been madness, Forest’s lawyers will argue, to sell for almost £20m less than his true value rather than waiting a couple of months.
Further mitigating factors will be the disparity between promoted clubs and established Premier League sides and the fact the losses they were allowed last season were effectively far less than their rivals.
Indeed, Crystal Palace’s co-owner John Textor said yesterday that it would “not be right” for Forest to be docked points, as the Premier League’s financial rules prevent smaller clubs from competing.
Speaking about PSR, Textor said: “It’s clear that they’re built to make sure that clubs who do not drive significant revenues cannot catch up. It doesn’t matter if you have a billion dollars of cash in a wheelbarrow, you’re not allowed to spend it. Does that make any sense? (Evangelos) Marinakis has plenty of money to fund his team but he’s not allowed to. If he spends too much and does what the fans want, somebody comes along and docks him points? That’s not right.”
Forest’s promotion-winning squad was built around loan signings and, while the club were derided for the scale of their recruitment — they have now signed 42 players at a cost of £250m since coming up to the Premier League — they desperately needed to strengthen significantly in the summer of 2022 in particular.
Forest will argue that they had to invest to stand any chance of staying up.
What are the club saying?
Forest are keeping largely silent amid a desire to be seen as acting respectfully heading into this process.
The club do not want to aggravate the situation or speak before the case has been heard and they are determined to act professionally towards what they understand is a very serious situation.
Manager Nuno Espirito Santo and his coaching staff have worked hard to keep the ‘noise’ away from the training ground. He has repeatedly faced questions on the issue and, when asked recently how he viewed the situation and whether it was weighing on the minds of him and his players, head coach Nuno said: “You should ask someone else from the club, my job is to prepare the team, to focus on what we have to do.
“Regarding the hearing and decision, we are waiting. There are people in the club that are taking care of that. So these questions are not appropriate for me. I will not say much. Our focus has to be on the training, on the games, on the preparation, on our tasks.”
What has been the club’s attitude behind the scenes since the charges were made?
Internally, there was concern in January that they were being publicly linked with numerous players when in reality — even when there was tentative interest — they were often deals that were never likely to happen.
Orel Mangala’s move to Lyon in a deal that could be worth £30m with add-ons saw Forest recoup a fee that was almost three times what they spent (£10.5m) to sign him from Stuttgart in the summer of 2022.
Forest’s lawyers could argue that this move is indicative of the club’s new, more sustainable approach to player trading, although whether this is taken into account by the commission remains to be seen.
Forest’s statement when they were charged on January 15 was cautious in tone — noticeably more so than Everton’s, who were charged with a second PSR breach on the same day.
Forest stated they would “continue to cooperate fully with the Premier League on this matter and are confident of a speedy and fair resolution”, which was in contrast to Everton’s more strident response, which questioned the fairness of the regulations and promised to fight the charges.
Will Forest’s stance have any impact on how they are punished? The club seemingly hope so. It feels very planned, very considered. Forest have been respectful, they have been conciliatory in tone, they have not briefed journalists to try to fight their case or, unlike Everton, sought to get the backing of local MPs and other powerful voices, or even their own supporters’ groups.
Forest, who are currently 17th in the table, have kept the Premier League informed all the way through — starting weeks before the transfer window when they stated their intention to sell Johnson. They will have to hope this is noted by the panel that hears the case.
Who is part of their defence team?
Forest’s defence team will be led by Nick De Marco KC, a leading sports lawyer.
Nicholas Randall, the club’s former chairman, had previously been in charge of the process and made a public promise that Forest would never breach. Randall, who is also a KC, has since been increasingly marginalised and is now a non-executive director. He is still involved with Forest but is out of favour with owner Evangelos Marinakis, who appointed Tom Cartledge, a lifelong Forest fan, as the new chairman in August.
Marinakis (Mike Egerton/PA Images via Getty Images)
Cartledge is the chief executive of Handley House, the parent company for four international businesses specialising in design and architecture. One of those businesses is Benoy, the Newark-based firm that designed the plans to redevelop the City Ground with a new 10,000-seat Peter Taylor stand.
Would Forest appeal the verdict?
It depends entirely on the outcome. Given Everton’s success in seeing their 10-point punishment reduced to six points, Forest would almost certainly appeal if their punishment was anywhere near as severe as even six points. If they are handed a smaller punishment, that might change the dynamic.
If they did appeal, it raises the prospect of a decision not being made until after the final game of the season. Forest’s case must be heard and concluded by April 15, which would include any appeals process.
The Premier League has put in place a backstop for all of this to be decided — including the appeals process — by May 24, which is five days after the end of the Premier League season.
How would it affect morale in Forest’s bid to avoid relegation?
Simply dropping into the bottom three would be a blow to morale. It would be a landmark moment. Forest currently sit four points ahead of Luton Town, who occupy the final relegation spot in 18th place.
But as long as Forest remain within touching distance of safety, the belief that they can avoid the drop should not be hit too significantly.
Nuno still has players to come back from injury, including Ibrahim Sangare, Ola Aina, Willy Boly and Chris Wood, who would all strengthen the head coach’s options considerably. Forest have a stronger squad than the one that kept them up last season, so in theory they are better equipped to face the challenges of a relegation fight.
Nuno was asked if confidence was becoming an issue in the aftermath of defeat to Manchester United in the FA Cup and he insisted there was still belief in the dressing room.
Ultimately, nothing improves the mood more than collecting three points in games. Everton manager Sean Dyche managed to turn their punishment into a source of motivation. Forest will hope to respond in a similar fashion, starting with the visit of Liverpool this weekend.
(Top photo: Michael Regan/Getty Images)
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