Why Nottingham Forest’s appeal against their points deduction failed

Nottingham Forest’s appeal against their four-point deduction for breaching the Premier League’s profitability and sustainability rules (PSR) was unsuccessful.

The club were punished in March for breaching PSR and, despite their appeal last month, the verdict was upheld on Tuesday.

It leaves Forest locked in a battle to avoid relegation from the Premier League — three points clear of 18th-placed Luton Town with two games remaining.

But what gave Forest cause to appeal their punishment? Was this the outcome they were expecting? Why was their challenge rejected? And what is the mood at the club now?

The Athletic answers all this and more…

What was the basis for Nottingham Forest’s appeal?

Unlike Everton, who cited eight grounds of appeal when having their initial 10-point deduction reduced to six in February, Forest’s challenge turned out to be not nearly as complex when it was heard on April 24.

It was argued that the Premier League’s commission had erred twice in their original judgment: once by not treating the sale of Brennan Johnson two months after the relevant financial period as a mitigating factor, and again when not suspending the four-point deduction passed down.

The greatest weight was attached to the timing of Johnson’s sale to Tottenham Hotspur for £47.5million ($59.4m) last summer. Johnson, who was again referred to throughout as Player A, had long been considered the answer to Forest’s PSR problems, with the sale of an academy graduate cancelling out the projected breach of £34.5m in a stroke.

Forest failed to sell Johnson before June 30, 2023 — the cut-off for their PSR accounting period — but argued in the original hearing that Johnson’s eventual transfer on September 1 ought to be considered a “near miss” and that “the closeness of the miss constituted a mitigating factor”.

The Premier League’s disciplinary commission had not accepted that, but Forest pointed towards the case of Sheffield Wednesday, who were charged with breaching the EFL’s PSR in 2019. Wednesday sold their home, Hillsborough, to owner Dejphon Chansiri for £60million in 2018 as a means of complying but the deal was not ratified until 17 days after the accounting period. This, Wednesday successfully argued, was a “significant mitigating factor”.

The original commission, though, considered the facts of Forest’s case to be “very different”, with majority shareholder Evangelos Marinakis only giving instructions to sell Johnson near the end of the summer window on August 28. It was found that Forest had taken “a huge risk leaving only one way to avoid a PSR breach”.

Forest also argued that the original decision was flawed because the sanction had not been suspended, either in part or in whole. They put forward several cases — all from the EFL — in which clubs had been given suspended points deductions.

Reading, for example, were docked six points in November 2021, with a further six suspended, for their PSR breach. The commission had previously stated that suspending the sanction “would not change anything” and a breach the size of Forest’s ought to bring an immediate sanction.

Why did the appeal board dismiss Forest’s claims?

Forest said the grounds for appeal were based on “two distinct and fundamental points of principle” but the appeal board was unconvinced. “Neither of the points was one of principle,” it concluded. And that was at the nub of Forest falling short.

The three-person appeal board, consisting of Lord Dyson, David Phillips KC and Daniel Alexander KC, said the original commission had carried out an “exercise of judgement” and that its outcome had fallen “well within the range of decisions that were reasonably open to it”. The appeal was also unimpressed by what it called a “minute examination” of their language used in the judgment.

Forest failed to convince the appeal board that the sale of Johnson could be used as mitigation because it did not reduce the seriousness of the breach.

All alleged errors put forward by Forest were dismissed, including the timing of Johnson’s sale. Bids for Johnson, highlighted in the club’s evidence, had been rejected before the June 30 cut-off because they fell short of Forest’s asking price.

One point made by the appeal board took a dim view of that approach. “The Commission correctly concluded that looking to make the miss as near as possible ‘was a less important factor, when compared to maximising value/profit’.”

The appeal also found no merit in the argument that Forest’s sanction should be suspended. They would “reject all the criticisms” made by Forest over the judgment. “Fairness to the other clubs and the need to maintain the integrity of the sport will usually require the points deduction to be immediate,” it added.

In a verdict signed off on Monday, it ended with a sentence to draw a line in the sand. “We are unanimous that the commission was entitled (and right) to impose the sanction of four points and to refuse to suspend it.” Case closed, then.

Was this outcome expected by the club?

Following the appeal hearing, Forest had hope that at least some of their punishment would be suspended, even if it was only a single point — but hope, rather than expectation, was the keyword.

The club believed there was a justification for a reduced punishment, given the case they had presented at the first hearing in March, which is why they decided to appeal.

Forest manager Nuno Espirito Santo (Alex Livesey/Getty Images)

Forest argued that the sale of Johnson shortly after the PSR assessment period had ended should have been regarded as a mitigating factor at the initial hearing, back in March, as they had constantly kept the Premier League informed of their intention to sell the academy product to keep them the right side of loss limits.

Behind the scenes, there was no real sense of what the outcome would be, only of what they felt it should be.

Are Forest surprised or angry with this decision?

The club are frustrated and disappointed — but they want to roll up their sleeves and get on with the things they can control.

With two games left to decide their Premier League fate, the club want to ensure every ounce of focus is now on that. However, that does not mean Forest will not stage a deeper inquest into the PSR saga once the season is over.

The saga has also had an impact on the non-football staff at the club, who have been waiting nervously to see how Forest’s survival chances might change. The huge financial disparity between playing in the Premier League and the Championship means relegation often leads to redundancies.

What has manager Nuno Espirito Santo said?

This has been the one issue that the Forest head coach has been uncharacteristically vocal over. He has called the situation a “mess” more than once and admitted that the saga dragging on has been a distraction in the dressing room.

Nuno has repeatedly called for “clarity”, asking that the verdict be delivered as quickly as possible — and warning that the very integrity of the competition was being put at risk.

“We have been waiting for the final decision, to see if we have 33, 32, 31 or 30 points,” said Nuno, after the 3-1 win at Sheffield United. “This is what we have to know. Our opponents also. It (the verdict) should have been done before now.”

Now the manager will urge the players to focus on just doing what needs to be done to ensure that they remain out of the bottom three.

What does owner Evangelos Marinakis think?

The reaction from the club hierarchy once the appeal verdict was made public was to metaphorically pull up the drawbridge. An instruction came from the top that a statement would not be required in response to the news.

This could have been influenced by the reaction that the previous club statement, in the aftermath of the VAR controversy at Everton, prompted.

There was surprise among the hierarchy about the number of headlines their statement generated, with the culture in Greek football — when it comes to questioning the authorities in particular — being very different.

Marinakis watching Forest earlier this season (Jon Hobley | MI News/NurPhoto via Getty Images)

For now, a decision has been made, among the hierarchy, to keep the club’s powder dry. Whether that is still the case in the weeks to come remains to be seen.

How will this affect preparations for the game against Chelsea?

Within the Forest dressing room, there has been anger and frustration over the PSR and VAR controversies.

A string of refereeing decisions have had an impact on results — most recently, the penalty appeals in the 2-0 defeat at Everton.

Nuno has spoken previously about the need to use things as positive motivation, rather than dwelling over any sense that the world is against them. That will likely be the message again this weekend.

Last season, Forest secured safety in the penultimate game of the campaign, with a memorable 1-0 win over Arsenal at the City Ground.

This weekend, they have the opportunity to secure their Premier League status by beating another London club — Chelsea (provided Luton don’t also win). Nuno will urge his players to focus on their performance, ahead of anything else.

What does the decision mean for the relegation battle overall?

Barring the unlikely event that Everton have their punishment increased following their appeal against their latest points deduction for PSR breaches, everyone involved in the relegation fight now at least knows where they stand.

Whether it is Forest, Luton or Burnley who ultimately occupy the final two relegation places, it will be decided by events on the pitch, rather than off it.

Nuno had admitted he would have found it questionable had anyone been relegated by a decision made at a desk after the verdict of Forest’s appeal did not arrive before last weekend’s matches.

Forest’s players celebrate during their win over Sheffield United last weekend (Rich Linley – CameraSport via Getty Images)

Yet had Forest seen even a point taken off their punishment, there would realistically have been few tears shed at the City Ground, even if it would have effectively confirmed Burnley’s return to the Championship.

With Forest (-18) boasting a superior goal difference to Luton (-29), as well as a three-point advantage, if they can beat Chelsea, they will effectively be safe.

But, if Forest lose and Luton collect a point or more or Burnley win, Nuno’s side will face a nervy final day.

(Top photo: Michael Regan/Getty Images)