Man Utd and Man City's Premier League rival handed points deduction following financial rule breach

Nottingham Forest have dropped into the Premier League relegation zone after receiving a four-point deduction for breaching profitability and sustainability rules (PSR).

Forest were charged by the Premier League in January after reporting losses more than the maximum amount allowed during the three-year period ending in the 2022/23 season. The club were referred to an independent commission alongside Everton, who were alleged to have been guilty of the same offence.

Following an investigation into the allegations, the independent panel have recommended Forest be docked four points and the punishment will see them drop into the bottom three. Nuno Espirito Santo's side were three points above safety after drawing 1-1 at Luton Town on Saturday but have now dropped below their hosts and into 18th.

A statement from the Premier League read: "An independent Commission has applied an immediate four-point deduction to Nottingham Forest FC for a breach of the Premier League’s Profitability and Sustainability Rules (PSRs) for the period ending Season 2022/23. 

"Nottingham Forest was referred to an independent Commission on 15 January, following an admission by the club that it had breached the relevant PSR threshold of £61 million by £34.5 million. The threshold was lower than £105 million as the club spent two seasons of the assessment period in the EFL Championship. The case was heard in accordance with new Premier League Rules, which provide an expedited timetable for PSR cases to be resolved in the same season the complaint is issued.

"The independent Commission determined the sanction following a two-day hearing this month, at which the club had the opportunity to detail a range of mitigating factors. The Commission found that the club had demonstrated “exceptional cooperation” in its dealings with the Premier League throughout the process."

Forest admitted to the breach but insisted it was partly due to their desire to get more money for Brennan Johnson. They received a £30m bid from Brentford early last summer and acceptance of that would likely have seen them stay within PSR limits, but they believed they could get more and eventually sold the winger to Tottenham for £47.5m, although that was in September and therefore not included in last season's accounts.

They are now the second team to receive a points deduction this season after Everton were initially docked 10 points in November. An appeal saw that reduced to six in February and Forest are expected to lodge an appeal of their own.

Everton have been charged again and are awaiting the verdict on a breach during the same period as Forest, with a second points deduction not out of the question. Championship side Leicester City could also be docked points ahead of next season if they are promoted after failing to keep within the limits.

Manchester City remain under investigation after being charged with 115 alleged breaches of competition rules between 2009 and 2018. The number and complexity of their charges means a resolution is not likely to come for some time and the club strongly denies any wrongdoing.

Manchester United have often cited PSR constraints as a key barrier to the recruitment many supporters have wanted to see, particularly in recent January windows. Erik ten Hag has spent more than £400m since taking over as manager in 2022 but both mid-season windows have seen nothing spent, with loan arrivals such as Wout Weghorst and Marcel Sabitzer the only such reinforcements.