Everton & Nottingham Forest charged for PSR breaches - Both clubs doomed to relegation?

Everton and Nottingham Forest have both been referred to an independent commission over an alleged breach of the Premier League’s profitability and sustainability regulations (PSR). Forest have become the third top-flight club to be charged with a breach of the league’s financial rules, after reporting losses that exceeded the allowed amount over the three-year period. Under the current guidelines, both clubs are in danger of a fine or a points deduction.

Earlier in the season, Everton were already deducted a historic 10 points for breaches of profit and sustainability rules between the 2019/20 and 2021/22 season. That penalty was only the third time that a Premier League team had been docked points - Middlesbrough were deducted three points in the 1996/97 season, and Portsmouth were deducted nine back in 2010. 

Under the PSR, clubs are allowed to lose a maximum of £105m (€122.1m) over three seasons (or £35m (€40.7m) a season) but certain costs can be deducted, such as investment in youth development, infrastructure, community and women’s football. Forest’s permitted losses are lower than the £105m limit because the club were in the Football League during a portion of the accounting period. Their top figure instead amounts to £61m (€70.9m), which breaks down as £13m (€15.1) for the 2020-21 and 2021-22 seasons when they were in the Championship, plus £35m (€40.7m) for last season, their first back in the top flight.

Everton club statement: “Everton Football Club acknowledges the Premier League’s decision to refer a breach of Profit & Sustainability rules (PSR) for the assessment period ending with the 2022/23 season to an independent Premier League commission. This relates to a period which covers seasons 2019/20, 2020/21, 2021/22 and 2022/23. It therefore includes financial periods (2019/20, 2020/21 and 2021/22) for which the club has already received a 10-point sanction. The club is currently appealing that sanction.

“The Premier League does not have guidelines which prevent a club being sanctioned for alleged breaches in financial periods which have already been subject to punishment, unlike other governing bodies, including the EFL. As a result – and because of the Premier League’s new commitment to deal with such matters “in-season” – the club is in a position where it has had no option but to submit a PSR calculation which remains subject to change, pending the outcome of the appeal. The club must now defend another Premier League complaint which includes the very same financial periods for which it has already been sanctioned, before that appeal has even been heard. The Club takes the view that this results from a clear deficiency in the Premier League’s rules.

“Everton can assure its fans that it will continue to defend its position during the ongoing appeal and, should it be required to do so, at any future commission – and that the impact on supporters will be reflected as part of that process.”

Nottingham Forest club statement: “Nottingham Forest acknowledges the statement from the Premier League confirming that the club has today been charged with a breach of the league’s Profitability and Sustainability Rules. The club intends to continue to cooperate fully with the Premier League on this matter and are confident of a speedy and fair resolution.”

Everton's player spending & sales from 2020/21 to 2022/23

In the three season's in question, Everton spent €192.07m on new signings. Their biggest incomings were Amadou Onana for €35 million from Lille, Ben Godfrey for €27.5m from Norwich, and Allan for €24.6m from Napoli. In that same timeframe, they acquired €154.03m from player sales, including the sale of Richarlison to Tottenham for €58m, and letting Anthony Gordon go to Newcastle for €45.6m. That's a net spend of just -€38.04. The toffees current squad is valued at €336.9m.

Nottingham Forest's player spending & sales from 2020/21 to 2022/23

When it comes to Forest, they have spent €217.38m in the last three seasons, with most of that money spent last season, where they forked out €195.25m on new arrivals. Their most lucrative signings were for Morgan Gibbs-White (€29.5m), Taiwo Awoniyi (€20.5m), Nico Williams (€20m) and Danilo (€20m). In that same period they recouped just €21.63m from players sold. Leaving the Midlands club with a net spend of -€195.75m. Their current squad value is €388.55m.