Nottingham Forest docked four points for overspending and drops into Premier League’s relegation zone

Nottingham Forest's Chris Wood celebrates scoring his side's first goal of the game against Luton Town. Photo / AP

Nottingham Forest was handed a four-point deduction for overspending, dropping the team into the Premier League’s relegation zone with two months left in the season.

Forest was found to have breached the league’s profitability and sustainability regulations, which typically allow clubs to lose a maximum of 105 million pounds ($219 million) over a three-year period or face sanctions.

Forest’s assessment period ended in 2022-23 and therefore included two seasons when the club was in the second-tier Championship. For that reason, Forest was permitted losses of up to 61 million pounds ($127.6 million) in its first year back in the Premier League last season and the club went above the threshold by 34.5 million pounds ($72.16 million), having made an unprecedented 21 offseason signings at a cost of $263.11 million following promotion.

The team managed by Nuno Espirito Santo fell from 17th to 18th — one of the three relegation places in the league — and onto 21 points with nine games remaining. Luton, on 22 points, climbed out of the relegation zone as a result.

The sanction was handed out by a three-person independent commission following a hearing this month.

Forest didn’t immediately say if the club would appeal against the points penalty. If it did, the verdict might not be decided before the final round of games in the league on May 19. That raises the potential for the identity of the relegated teams only being known in the days after the season has finished, which would be hugely controversial.

Everton recently had a points deduction — for breaching spending rules in the three-year assessment period ending 2021-22 by less than 20 million pounds ($41.84 million) — reduced from an initial 10 to six following an appeal. That set the bar for future sanctions for similar offenses, with the commission saying it relied “heavily on the appeal board’s position in the Everton appeal.”

That might indicate, therefore, that Forest would be less likely to get its points reduction trimmed after any appeal.

Forest was treated more leniently by the commission after displaying what the panel regarded as “a level of cooperation which is above the level reasonably expected.”

Everton was handed a bigger punishment despite being in breach by a smaller figure, which can be partly attributed to the fact that the commission said Everton provided “incorrect information” to the Premier League as part of the investigation.

Everton, which is also embroiled in the relegation battle, could receive another points deduction soon for breaching the rules again — this time for the assessment period ending 2022-23.

Much of Forest’s mitigation centered around the club’s attempts to sell one of its top players, Brennan Johnson, after last season finished. Forest rejected bids from both Atletico Madrid and Brentford, according to the commission’s written reasons, on or before the June 30 deadline for any transfers to be included in the figures for profit and sustainability.

Forest ended up selling Johnson to Tottenham in September for up to 47.5 million pounds ($99.38 million) but by then was in breach of the rules.

In a separate disciplinary case, Manchester City is currently in a legal fight with the Premier League after the competition accused the English and European champions of about 80 alleged breaches of its financial rules from 2009-18 and 30 more relating to its alleged failure to co-operate with an investigation.

The outcome of City’s case isn’t expected to be known until midway through next season, at the earliest, because of the number of alleged breaches involved.