NOTTINGHAM Forest’s fans are understandably angry at the moment about the four-point penalty from the Premier League over the breach of Profitability & Sustainability rules. However, their frustration and angst should be directed at the people running football clubs rather than the authorities. The figures are there for all to see and while City Ground regulars might claim Forest have been unfairly dealt with, just as Everton’s fans believed they were harshly treated, both clubs have strayed beyond the reasonable in terms of financial management.
These two examples are at the start of a period of more stringent financial regulation. It may be that once a routine is established that a more transparent system will be implemented that will make it more obvious how a club might be punished for ill-disciplined behaviour. Leicester City are now going through a similar exercise and the whole of English football is waiting to see how Chelsea and Manchester City are managed by the authorities. One would assume that in the case of the latter, there will be a long line of lawyers involved in working through City’s case, which is very different to those we have seen so far. Naturally, fans of Everton and Forest are quick to point at Chelsea and City and ask, “what about them?”.
Anyone claiming there is a conspiracy, that corruption will prevent elite clubs from getting their due punishment is clutching at straws. The 20 Premier clubs sign off on the “rules” every season. What we are seeing is clubs kicking back at the rules they effectively signed up for. Nottingham Forest know they breached the rules, something that casual observers were predicting given the spending behaviour of the club. It was understandable they were keen to preserve the Premier League status they had waited so long for, but 29 new players, some costing ridiculous sums of money, seemed like an accident waiting to happen.
There is one aspect of the punishment that will undoubtedly spark-off plenty of debate. As we are now learning, a Premier League club can lose (let’s underline that, lose) £ 105 million over a three-year period, a limit that has been in place since 2013. EFL Championship clubs can lose £ 61 million. The three-year period in question (2020-21 to 2022-23) included to Championship seasons for Forest. Therefore, while it is incorrect to apply the full Premier allowance to Forest for that period, there is arguably something of a grey area to remedy.
Forest certainly breached the £ 61 million limit, but if they had Premier limits applied to their performance, they would not have had a problem. Perhaps a limit that takes a pro-rata approach, with two thirds of the EFL limit and one third of the Premier would have been more appropriate. This would give Forest an allowance of something like £ 75 million, still lower than the actual result but not as painful. It seems crazy that the football industry doesn’t conform to most sectors in that overspending has permitted limits and the wage bill consumes so much of income. Furthermore, while regulators in any business make boardroom members fidget uncomfortably, how often do you find such opposition to better control?
On that very subject, could this not have been anticipated? Do the people in the expensive seats not have simple mechanisms like management accounts that can forecast future cash flows and risks? Surely clubs can better mitigate potential problems and see how much money and future commitments they have taken on board? If there is a protest, it should be aimed at those signing the cheques.
The angry man on the River Trent may, again, point to the elite clubs who have spent heavily in order to position themselves as masters of the universe – Chelsea, Manchester City and Paris Saint-Germain etc – but the days of summer team building with a sackful of euros are over. The horse may have already bolted, but it is very doubtful that a club can do what this trio did when they marched on the back of backers with money to burn. Chelsea did it under Abramovich and they are now going to find out that excessive spending comes with an additional cost.
Nottingham Forest may well suffer relegation as a result of their four-point deduction, but it may have been inevitable. They have nine games remaining, five at home, four away. They have to play Manchester City, Tottenham and Wolves from the top half, but they also have Burnley, Sheffield United, Everton and Crystal Palace on their fixture list. They are currently one point behind Luton Town, who are perched above the drop zone.
Of course, they may appeal their penalty, but there is no guarantee that will improve the situation. If all fails, this is another case of questionable fiscal management and, one has to say, people not realising the consequences of a spending spree.