The Premier League has charged Everton and Nottingham Forest with breaching its financial rules.
Both clubs have been referred to an independent commission for alleged breaches of profit and sustainability rules in their accounts for 2022-23.
Under Premier League regulations, clubs can lose a maximum of £105m over a three-season period, or £35m per campaign, before facing sanctions.
Clubs that breach those rules are at risk of a fine or a points deduction.
Everton are currently appealing against a 10-point deduction from a previous charge.
The Premier League said in a statement 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 as a result of sustaining losses above the permitted thresholds for the assessment period ending season 2022-23.
“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.”
Clubs are in breach of profit and sustainability rules (PSR) if their calculation over the relevant period results in a loss in excess of £105m, although that threshold is reduced by £22m for each season a club spends in the Championship over the course of 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 £61m.
Clubs had to submit their accounts for 2022-23 by 31 December under new rules designed to speed up the reporting process and ensure any penalties were imposed during a season when the alleged transgression took place.
The Premier League had 14 days from the reporting date to inform clubs whether they were in breach or not.
Everton are 17th in the Premier League table and sit just one point above Luton Town, who are in the relegation zone having played a game more, while Nottingham Forest are four points clear of the drop zone in 15th.
Everton ‘will continue to defend its position’
Everton have 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 to 2021-22 amounted to £124.5m.
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.
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 are awaiting approval from the Premier League.
The club are 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 are confident of a speedy and fair resolution.”
Forest have 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 30 June 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.
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