Finding a way through the points deduction forest

Now we need lawyers for Subbuteo as well as accountants

One of the biggest dilemmas for commentators on contemporary football is the issue of points deductions for breaking financial fair play rules.   Fans of penalised clubs argue that they are the ones that suffer rather than those at the top who have made poor management decisions. 

And what about Manchester City, they ask?   All in good time: the charges are so numerous and complex that they are going to take time to resolve, not to mention the court battles that will follow.  Once again, the real winners will be the lawyers.

The PSR rules are intended to maintain the integrity of the competition, so would it be fair that clubs who breach the limits should be allowed to do so with impunity, while others respect the rules? To extend Jean-Paul Sartre’s famous quote, “In football everything is complicated by the presence of the opposite team… and PSR”.

The harsh reality is relegation could be decided by the points deductions imposed by PSR, which is not a good look for the Premier League.   It could damage its global reputation on which its finances rely.

Everton’s second hearing in front of an independent Commission takes place  today .  The club will argue that the bulk of any overspend has already been dealt with and they should not be punished twice. The case is being fast tracked to be heard before the end of the season.   Meanwhile, 777 partners have been told that they will have to show proof of funding of £410m to complete their takeover of the club.

Nottingham Forest’s four points deduction could also affect the relegation stakes.   Forestargued that they needed to invest significant sums after promotion to the Premier League if they were to have any chance of competing at the higher level. After more than 20 years out of the top flight, they said that they had to spend big, as they were playing catch-up with more established clubs.

Even the Premier League acknowledged that (a) non-recently promoted clubs had the benefit of a higher PSR threshold; and (b) the other two clubs promoted alongside Forest had the benefit of substantial sums from parachute payments.

Furthermore, Forest had little time to act after only securing promotion by winning the play-off final. While that is correct, it is clearly not “unique” for Forest, as all play-off winners have to cope with this particular challenge.

‘All that being said, the question is whether Forest needed to spend quite so much’, comments the authoritative Swiss Ramble.   According to Transfermarkt, they splashed out around £170m on transfers, including six purchases above £10m, namely Morgan Gibbs-White, Taiwo Awoniyi, Neco Williams, Danilo, Emmanuel Dennis and Orel Mangala.

By his reckoning, 30 new players arrived at the City Ground in 2022/23 (including loan signings), though the Commission only counted 29. Either way, it’s a ridiculous amount of recruitment in a single season.

In fairness, Forest would have been operating with a handicap if they had not invested in the squad, as can be seen by the club’s limited expenditure in previous years. To further place last season’s £170m into perspective, they had spent less than £100m on player purchases in the 20 years before promotion.

One way of looking at this is that regular members of the Premier League were able to spread such investment over the 3-year PSR monitoring period, while Forest effectively tried to replicate this in their first season back.

Indeed, if we look at gross spend for the three years up to 2022, Forest were firmly in the bottom half of the Premier League. However, in this period they still spent more than clubs like Brighton and Brentford, who have not done too badly after their arrival in the top flight.

An appeal by Forest would run the risk of the sanction potentially being increased, as the Appeal Board has the power to “vary any penalty imposed or order made at first instance”, according to Premier League rules. That said, while an increase in the sanction is theoretically possible, most experts would consider this to be unlikely.

Forest will feel that they have been punished for showing ambition, “In circumstances where this approach is followed by future PSR commissions, it would make it extremely difficult, if not impossible, for newly promoted clubs without parachute payments to compete, thus undermining the integrity and competitiveness of the Premier League.”

That is eminently understandable, but the feeling remains that Forest’s spending after promotion was over-the-top, so a breach of the PSR maximum loss was always on the cards. As a result, they have paid the price for their profligacy.   But can we see the forest for the trees?