WHO IS SUBJECT TO FFP RULES & HOW MUCH CAN THEY LOSE?
In England, all Premier League clubs have to comply with Profit and Sustainability Regulations (PSR) which state they cannot lose more than £105m in a three-year period. In the EFL, rules differ depending on the division a club is in. In the Championship, Profit and Sustainability (P&S) rules dictate clubs are permitted to lose up to £39m over three years. In Leagues One and Two clubs follow the Salary Cost Management Protocol (SCMP) which states each club can only spend a fixed percentage of its revenue on wages. That limit can also be impacted by equity injections or net transfer spend.
IS ALL CLUB SPENDING AND INCOME PART OF FFP CALCULATIONS?
Income yes. Spending no – and this is where complications come in. Clubs are allowed to spend money on infrastructure, women’s teams and academy costs and not see it go towards their figure. In Everton’s previous 10-point sanction, which they are appealing, a contentious area was over interest due on loans the club said were related to their new stadium, which the Premier League disputed.
WHY ARE EVERTON BEING CHARGED AGAIN?
The latest figures were submitted in December, which included the 2022-23 season. The Premier League is alleging that, over the updated three-year period, they have again gone beyond the permitted £105m.
WHAT HAVE FOREST DONE WRONG?
Given their promotion from the Championship, Forest had to play by different rules and their permitted losses were at a lower level of £61m. Effectively their top-flight campaign had an allowance of £35m, with £13m for each of the two seasons in the second-tier. Forest have, famously, signed 43 players since they won the play-off final in May 2022.
WHO IS LOOKING OVER THEIR SHOULDER?
Pretty much the whole of the league. Even by January standards this window has been quiet – and these rules are the key factor behind that. Everton’s 10-point deduction sent shockwaves throughout the game and clubs are well aware of where they stand and the danger of falling foul of the regulations.
WHY HAS THERE BEEN A RECENT SPIKE IN CHARGES?
P&S came into play during the 2015-16 season. The simple answer is that the ‘spike’ has happened now because the three clubs involved – if you include Manchester City – have only recently been found to have allegedly broken the rules.
WHAT IS THE APPEALS PROCESS, WILL THE DEDUCTIONS APPLY THIS SEASON AND WHAT DEFENCE CAN CLUBS HAVE?
A club has a fortnight to respond and a hearing must be completed by early April – before any appeal is heard. Should an appeal be forthcoming the process could run to late May – beyond the end of the season. Because of the subjectivity involved, clubs can appeal on any one of a number of areas. With Forest, it is expected they will claim they sold Brennan Johnson to Tottenham on deadline day in August for a higher fee (a club-record £47.5m) than they would have received in June – prior to the end of the financial year, although whether that would wash remains to be seen.
WHAT IS THE BIGGEST PUNISHMENT A CLUB COULD BE HIT WITH IF FOUND GUILTY?
There is no sanctioning policy or set range of punishments. Instead, any punishment is in the hands of the Premier League-appointed independent commission, and the rule book is ‘open’. It is likely that the harshest punishment would come in the form of a heavy points deduction that could make relegation for an offender a formality.
By Mike Keegan
