The Premier League has accused Everton and Nottingham Forest of breaching its financial rules.
Both clubs have been referred to an independent commission for alleged violations of profit and sustainability rules in their financial reports for the 2022-23 season.
According to Premier League regulations, clubs can incur a maximum loss of £105 million over a three-season period, or £35 million per season, before facing sanctions.
Clubs that breach these rules are at risk of fines or point deductions.
Everton is currently appealing a 10-point deduction from a previous charge.
The Premier League stated in a release that Everton and Nottingham Forest “have each confirmed that they are in breach of the league’s profitability and sustainability rules.”
It added, “This is a result of sustaining losses above the permitted thresholds for the assessment period ending the 2022-23 season. In accordance with Premier League rules, both cases have now been referred to the chair of the judicial panel, who will appoint separate commissions to determine the appropriate sanction.”
The clubs now have 14 days to submit their formal responses, and according to league rules, the hearings must be concluded within 12 weeks. Appeal hearings must be held before May 24, 2024, and the complaint resolved before June 1.
Clubs are considered in breach of profit and sustainability rules (PSR) if their calculations over the relevant period result in a loss exceeding £105 million, although this threshold is reduced by £22 million for each season a club spends in the Championship during that relevant period.
Nottingham Forest spent two seasons in the Championship within the three-year assessment period, meaning the maximum loss for the club is £61 million.
Clubs had to submit their accounts for the 2022-23 season by December 31 under new rules designed to expedite the reporting process and ensure any penalties were imposed during the season when the alleged transgressions took place.
The Premier League had 14 days from the reporting date to inform clubs whether they were in breach or not.
Everton is in 17th place in the Premier League table, just one point above Luton Town, who are in the relegation zone having played a game more, while Nottingham Forest is four points clear of the drop zone in 15th.
Everton ‘will continue to defend its position’
Everton has acknowledged the Premier League’s decision to refer them to an independent commission for a breach of profit and sustainability rules for the assessment period from the 2019-20 campaign through to the end of the 2022-23 season.
They received an immediate 10-point deduction – the biggest punishment in the Premier League’s history – in November after an independent commission found the club’s losses up to 2021-22 amounted to £124.5 million.
Their appeal is due to be heard before the end of this season.
In a statement, Everton said: “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.”
Thousands of Everton fans held anti-Premier League protests following the points deduction, while a number of regional politicians raised concerns, including Mayor of Liverpool Steve Rotheram and Mayor for Greater Manchester Andy Burnham.
In a new statement on Monday, Rotherham said he had “grave concerns” about the transparency of the process and that by being potentially penalised twice in the same season Everton are facing “double jeopardy”.
He added: “It is not about one club but ensuring that our game is open and fair in its treatment of all clubs.
“It is difficult to see how anybody can have any confidence in a process as opaque as this.”
The new charges against Everton come at a time of significant uncertainty for the club.
In September, owner Farhad Moshiri agreed to sell his 94% stake in the club to American investment fund 777 Partners.
The takeover has been given the green light by the Financial Conduct Authority (FCA) and the Football Association (FA), but Everton is awaiting approval from the Premier League.
The club is also in the process of building a new stadium on the banks of the River Mersey at Bramley-Moore Dock, which is due to open in late 2024.
Forest ‘confident of a speedy and fair resolution’
Nottingham Forest join Everton and Manchester City as the only top-flight clubs to be charged with breaking profit and sustainability regulations.
City were referred to an independent commission in February 2023 over more than 100 alleged rule breaches between 2009 and 2018.
Since securing promotion from the Championship in May 2022, Forest have spent a reported £250m on new signings.
In September 2022, the club broke the British record for most signings in a single transfer window after welcoming 21 new arrivals.
“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 said in a statement.
“The club intends to continue to cooperate fully with the Premier League on this matter and is confident of a speedy and fair resolution.”z z z z z z z z z z z z
Forest has employed leading sports lawyer Nick de Marco to argue their case, which is thought to centre around the sale of Brennan Johnson to Tottenham for up to £45m in September.
This took place after the accounting deadline, but Forest argue their negotiating tactics allowed them to generate a higher fee than if they had been forced to sell by June 30, 2023.
Manchester City are the only other club to have been charged by the Premier League for financial breaches when they were referred to an independent commission over more than 100 alleged rule breaches between 2009 and 2018.
Treble winners City were charged in February 2023 – before Everton’s initial charge – and that case is ongoing.
Meanwhile, Chelsea could face further scrutiny from football’s authorities over reports of payments connected to the club’s former owner Roman Abramovich.
Chelsea were fined £8.6m by European football governing body Uefa in July for “submitting incomplete financial information” between 2012 and 2019 as part of a settlement for breaking Financial Fair Play rules.
