Forest may have to sell star player to avoid further penalty

Nottingham Forest face having to sell one of their star players before the end of June or risk another points deduction next season for breaching financial rules, even if they are relegated.

The judgment of the independent commission which imposed a four-point deduction on Forest for breaching permitted losses in the three years up to June 30, 2023, reveals they are at risk of being in breach again this season.

It would mean Forest having to make about £30 million in profit from selling players. They do have names that would command large fees such as Morgan Gibbs-White, the 24-year-old attacking midfielder.

Forest’s own calculations, disclosed in the findings, show they made a loss of £40 million in the 2021-22 financial year (FY22) when they won promotion from the Championship via the play-offs, £52 million in FY 23 and, according to the judgment, are “projecting to realise losses of approximately £12-17 million for the year ending June 30, 2024”.

That total loss over three years would be between £104-109 million — £21-£26 million above the maximum allowable loss of £82 million (a smaller figure than the £105 million maximum losses permitted to Premier League clubs because it includes one year when Forest were in the Championship).

The independent commission’s findings state: “What happens for its second season in the Premier League is potentially a matter between the parties next year, when the PSR for FY24 is considered.”

Forest did tell the independent commission it would not breach limits for this season, but it is unclear whether that was based on an intention to sell a player.

Forest are considering whether to lodge an appeal against the four-point deduction, after saying they were “extremely disappointed” by the sanction after they admitted a breach of financial losses.

Although it is seen as unlikely, an appeal board could even increase the sanction as it has the power to “vary any penalty imposed or order made at first instance”, Premier League rules state.

It means Forest will have to weigh up if there is a risk in appealing. The club’s breach was £34.5 million above the permitted losses, 77 per cent higher than Everton’s £19.5 million, yet the Merseyside club had a ten-point deduction reduced to six on appeal, still harsher than Forest’s four-point punishment.

The more general question is whether the Premier League will become less attractive as a competition if legal judgments weigh heavily on the table.