Nottingham Forest

[Dave]

The Athletic piece on Forest is eye watering!

This was my favourite bit

"There is the story of Omar Richards, who joined from Bayern Munich without anybody realising he had a fractured leg. Somehow, Richards passed a medical he underwent in Greece. He cost £8.5m and, 18 months on, has not played a single minute for the club."

"
By the time Forest signed Chris Wood and Jonjo Shelvey from Newcastle United last January, they knew the numbers contained all sorts of risks. They went ahead and did it anyway.

Wood signed on loan with a clause in his contract that triggered a £15m deal, on £100,000 a week, as soon as he was named in the matchday squad three times. Shelvey was given a two-and-a-half-year contract on roughly £75,000 a week and, within St James’ Park, the two transfers created something bordering on amazement. Put bluntly, they could not believe Forest thought it was good business.

[Stan]

1 minute ago, The Palace Fan said:

The Athletic piece on Forest is eye watering!

This was my favourite bit

"There is the story of Omar Richards, who joined from Bayern Munich without anybody realising he had a fractured leg. Somehow, Richards passed a medical he underwent in Greece. He cost £8.5m and, 18 months on, has not played a single minute for the club."

"
By the time Forest signed Chris Wood and Jonjo Shelvey from Newcastle United last January, they knew the numbers contained all sorts of risks. They went ahead and did it anyway.

Wood signed on loan with a clause in his contract that triggered a £15m deal, on £100,000 a week, as soon as he was named in the matchday squad three times. Shelvey was given a two-and-a-half-year contract on roughly £75,000 a week and, within St James’ Park, the two transfers created something bordering on amazement. Put bluntly, they could not believe Forest thought it was good business.

Reminds me of the Seth Johnson negotiation story. 

Wonderfully crazy. 

[Dr Boris Gobshite]

On 15/01/2024 at 20:10, RandoEFC said:

Enough people have made ill-informed claims about Everton's case that I'm reluctant to go spouting off about Forest in case they have their own mitigating factors that the media have largely overlooked and the club have failed to get into the public sphere. But yes, if I remember correctly that Forest actually signed over 25 players last season despite the fact that you can only register that many to play, from the outside looking in, that does look hard to defend.

I'm not on about the offence though, I'm being tongue in cheek but there is a valid comment in there about the process. Everton were transparent and cooperative with the Premier League to the point where we basically checked with them that every transfer and dealing was fine with them as far as FFP is concerned and it didn't do us any favours. Man City have been obstructive and evasive with their case and managed to buy themselves extra time as a result. Regardless of whether they have a case to answer or not, if they think transparency will get them any leniency with this lot then they're sadly mistaken.

To be fair I haven't seen any Everton fans that actually know what they're talking about on this subject, which is strange considering the verdict is in the public domain.

You went over the threshold by just under £20m and tried to claim exclusions on the following four costs:

1. Interest on funding for the stadium - You initially cocked up your accounting for the stadium because you hadn't got planning permission. Per UK accounting rules you can't capitalise costs on an asset until it is certain they will produce revenue, which for stadiums means you have to get planning permission in place. Until planning permission is in place it's a cost on the P&L. The Premier League actually allowed you to retroactively fix this error which would have cost you about £50m. However, Everton then tried to claim an exclusion for interest related to the project, which is contra to the agreement where the Premier League allowed you to retroactively save £50m i.e the Premier League did you a massive favour and then you tried to pull a fast one on them. The interest was also charged on loans from Metro bank which clearly weren't for the stadium (you had interest free loans from Moshiri for the stadium) whilst Everton also incorrectly calculated the interest to make it a higher exclusion at £14.5m.

It's also worth mentioning at this point that as part of the capitalisation agreement the Premier League and Everton agreed for their transfer activity to be monitored. Contrary to your claim, and the claim made by a lot of Everton fans, this did not constitute the Premier League checking Everton's finances and reviewing their budgets every time a transfer was made to ensure they were compliant with PSR. The Premier League simply monitored transfer activity to ensure Everton were acting reasonably i.e. selling Digne and then buying Mykolenko is a reasonable move. Everton were repeatedly warned by the Premier League that their budget was tight and that persisting with any player purchases was ill advised. It was for Everton to confirm to the Premier League they were within budget, particularly because Everton were the ones forecasting forward. As it turns out, Everton were assuming they would finish higher in the League and therefore overestimating their revenue.

2. Transfer levy - All clubs pay a transfer levy of 4% into a pot to cover player pensions. If there is ever an excess in this pot then it is reinvested by the Premier League into youth football. Everton tried to claim this as an exclusion on the basis that it was spending on youth football. There hasn't been a single instance of any club trying to claim these pension payments as youth development.

3. Player termination loss - Everton tried to claim that they had to sack Player X (clearly Sigurdsson) and could have sued him for £10m but chose not to due to player welfare issues. So they included an exclusion for £10m without evidence to support the idea they could actually have sued Sigurdsson for £10m and won.

4. Covid - Everton claimed that £43.9m should be excluded based on transfer fees they could have received in 2020 but didn't because of Covid. The vast majority of these fees are related to Player Y (couldn't work out who this is) who Everton still owned. The Premier League's retort here was that this isn't in line with the agreed Covid principles that every other club has followed and that Everton have never sought to actually sell Player Y.

Aside from the above, Everton actually changed their stance from not guilty in the initial hearing to guilty in subsequent hearing, but not as guilty as the Premier League is making out. They dropped arguments 3 and 4 entirely but persisted with arguments 1 and 2, which would bring their losses down to £112.9m.

The commission decided that the Transfer Levy was not a Youth Development cost and that Everton's argument on the interest was not credible given the commercial loans from Metro Bank have usage restrictions on them. They concluded that Everton had a PSR loss of £124.5m

The commission also concluded that the 'failure to comply with the PSR regime was the result of Everton irresponsibly taking a chance that things would turn out positively' and that 10 points was an appropriate punishment. It should be noted that the Premier League suggested a framework that would have seen a base 6 point punishment with an extra point for each £5m over the threshold, which would have been a total of 9 points in Everton case.

My guess is Everton will have their points total reduced on appeal but not by much. It'll be interesting to see what argument they put forward for the subsequent breach though given they already admitted to £112.9m breach. I also suspect Forest will end up with a big points deduction given how recklessly they were spending last year. 

Edited January 20 by Dr Boris Gobshite

[CaaC (John)+]

18 minutes ago, Dr Boris Gobshite said:

To be fair I haven't seen any Everton fans that actually know what they're talking about on this subject, which is strange considering the verdict is in the public domain.

Lol, you are back, a lot of us wondered where you had disappeared to.

[Dr Boris Gobshite]

I got dragged into this thing called a 'career' where I spend all my time making other people rich.

[RandoEFC+]

1 hour ago, Dr Boris Gobshite said:

To be fair I haven't seen any Everton fans that actually know what they're talking about on this subject, which is strange considering the verdict is in the public domain.

You went over the threshold by just under £20m and tried to claim exclusions on the following four costs:

1. Interest on funding for the stadium - You initially cocked up your accounting for the stadium because you hadn't got planning permission. Per UK accounting rules you can't capitalise costs on an asset until it is certain they will produce revenue, which for stadiums means you have to get planning permission in place. Until planning permission is in place it's a cost on the P&L. The Premier League actually allowed you to retroactively fix this error which would have cost you about £50m. However, Everton then tried to claim an exclusion for interest related to the project, which is contra to the agreement where the Premier League allowed you to retroactively save £50m i.e the Premier League did you a massive favour and then you tried to pull a fast one on them. The interest was also charged on loans from Metro bank which clearly weren't for the stadium (you had interest free loans from Moshiri for the stadium) whilst Everton also incorrectly calculated the interest to make it a higher exclusion at £14.5m.

It's also worth mentioning at this point that as part of the capitalisation agreement the Premier League and Everton agreed for their transfer activity to be monitored. Contrary to your claim, and the claim made by a lot of Everton fans, this did not constitute the Premier League checking Everton's finances and reviewing their budgets every time a transfer was made to ensure they were compliant with PSR. The Premier League simply monitored transfer activity to ensure Everton were acting reasonably i.e. selling Digne and then buying Mykolenko is a reasonable move. Everton were repeatedly warned by the Premier League that their budget was tight and that persisting with any player purchases was ill advised. It was for Everton to confirm to the Premier League they were within budget, particularly because Everton were the ones forecasting forward. As it turns out, Everton were assuming they would finish higher in the League and therefore overestimating their revenue.

2. Transfer levy - All clubs pay a transfer levy of 4% into a pot to cover player pensions. If there is ever an excess in this pot then it is reinvested by the Premier League into youth football. Everton tried to claim this as an exclusion on the basis that it was spending on youth football. There hasn't been a single instance of any club trying to claim these pension payments as youth development.

3. Player termination loss - Everton tried to claim that they had to sack Player X (clearly Sigurdsson) and could have sued him for £10m but chose not to due to player welfare issues. So they included an exclusion for £10m without evidence to support the idea they could actually have sued Sigurdsson for £10m and won.

4. Covid - Everton claimed that £43.9m should be excluded based on transfer fees they could have received in 2020 but didn't because of Covid. The vast majority of these fees are related to Player Y (couldn't work out who this is) who Everton still owned. The Premier League's retort here was that this isn't in line with the agreed Covid principles that every other club has followed and that Everton have never sought to actually sell Player Y.

Aside from the above, Everton actually changed their stance from not guilty in the initial hearing to guilty in subsequent hearing, but not as guilty as the Premier League is making out. They dropped arguments 3 and 4 entirely but persisted with arguments 1 and 2, which would bring their losses down to £112.9m.

The commission decided that the Transfer Levy was not a Youth Development cost and that Everton's argument on the interest was not credible given the commercial loans from Metro Bank have usage restrictions on them. They concluded that Everton had a PSR loss of £124.5m

The commission also concluded that the 'failure to comply with the PSR regime was the result of Everton irresponsibly taking a chance that things would turn out positively' and that 10 points was an appropriate punishment. It should be noted that the Premier League suggested a framework that would have seen a base 6 point punishment with an extra point for each £5m over the threshold, which would have been a total of 9 points in Everton case.

My guess is Everton will have their points total reduced on appeal but not by much. It'll be interesting to see what argument they put forward for the subsequent breach though given they already admitted to £112.9m breach. I also suspect Forest will end up with a big points deduction given how recklessly they were spending last year. 

Interesting detail and good to see you back.

There's a lot of Everton fans being very partisan on social media but I do follow a few and listen to podcasts with people who are more balanced, know people inside the club and across football and stuff. I think I've said elsewhere that Everton are under no illusions that they've breached the rules. The main thrust of complaint seems to be that 10 points is over the top for what's been done wrong and are trying to exploit the point that the Premier League imposed the punishment without a sanctions policy in place. The Premier League will also point out that clubs voted to agree breaches would be dealt with on a case by case basis back in the day.

I also think and don't blame Everton for leaving no stone unturned in trying to get away with their offence seeing how other clubs have found and exploited loopholes or managed to push back their case by being obstructive to investigations that started years ago.

I've also heard that Everton's second breach is less serious than the first and Forest are in big trouble compared to us. 

My mean expectation is that our first deduction will be reduced to about 6 points and any further deduction would be less than that so it might well end up around the 10 we've currently had taken off. Forest should be hit with at least 6 points. It also wouldn't surprise me though if the original 10 points stood and we got hit for a further 12 for the second offence because after 30 years of supporting Everton I've learnt to work out the worst case scenario and expect something 50% worse than that.

[Dan+]

Forest really are horrid. Chip on their shoulder from day one since they've entered the PL (and before I can vouch). Huge victim complex. Nothing sums them up more than the whingefest they produced earlier over that Brentford 3rd goal that wasn't even remotely contentious. Awful club. Hopefully it burns slowly.

[Dr Boris Gobshite]

12 hours ago, RandoEFC said:

Interesting detail and good to see you back.

There's a lot of Everton fans being very partisan on social media but I do follow a few and listen to podcasts with people who are more balanced, know people inside the club and across football and stuff. I think I've said elsewhere that Everton are under no illusions that they've breached the rules. The main thrust of complaint seems to be that 10 points is over the top for what's been done wrong and are trying to exploit the point that the Premier League imposed the punishment without a sanctions policy in place. The Premier League will also point out that clubs voted to agree breaches would be dealt with on a case by case basis back in the day.

I also think and don't blame Everton for leaving no stone unturned in trying to get away with their offence seeing how other clubs have found and exploited loopholes or managed to push back their case by being obstructive to investigations that started years ago.

I've also heard that Everton's second breach is less serious than the first and Forest are in big trouble compared to us. 

My mean expectation is that our first deduction will be reduced to about 6 points and any further deduction would be less than that so it might well end up around the 10 we've currently had taken off. Forest should be hit with at least 6 points. It also wouldn't surprise me though if the original 10 points stood and we got hit for a further 12 for the second offence because after 30 years of supporting Everton I've learnt to work out the worst case scenario and expect something 50% worse than that.

There's ways to push the envelope though. Lying about stadium finance when the Premier League has already given you a massive win there is beyond stupid. Claiming a Covid exemption on a player you've never actively tried to sell is also pretty silly.

The Sigurdsson one might have had legs if they'd opened a dialogue with the Premier League when it happened and sought relevant legal advice. Likewise the Youth Dev one could have legs but only if they'd got the rest of the League to agree to the same thing. Dumping those two in at the last minute with zero consultation does nothing to help your argument.

My guess is that the total deduction will be between 15 and 20 points for both seasons. It could be a tight battle with Luton but I really don't see you going down even with a 20 point deduction.

As for Forest, i've heard that their argument is going to be that they could have sold Johnson for £20m and stayed within PSR limits but chose to wait for a bigger fee. That suggests they are around £20m over budget, which is in a similar ballpark to Everton's 21/22 breach. You'd expect that they'd get a 10 point penalty as well if that is the case.

I suspect though that there is some dodgy accounting in there between Forest and Olympiakos which might make the situation worse.

[Stan]

45 minutes ago, Dr Boris Gobshite said:

As for Forest, i've heard that their argument is going to be that they could have sold Johnson for £20m and stayed within PSR limits but chose to wait for a bigger fee. That suggests they are around £20m over budget, which is in a similar ballpark to Everton's 21/22 breach. You'd expect that they'd get a 10 point penalty as well if that is the case.

I suspect though that there is some dodgy accounting in there between Forest and Olympiakos which might make the situation worse

Yes please. 

[Dr. Gonzo]

The legend returns!

[Dave]

Not the best source by a long shot but nothing with Maranakis surprises me.

[OrangeKhrush]

23 hours ago, The Palace Fan said:

Not the best source by a long shot but nothing with Maranakis surprises me.

Maybe why they are listening to offers

[RandoEFC+]

This is the timeline laid out for the appeals process. It's bad enough that any appeal Forest or Everton submit for the second round of breaches will be heard after the season has ended, but based off the fact that Everton's first appeal was heard almost three weeks ago and we don't have a conclusion yet, it could be FOUR WEEKS after the end of the season before there's a final decision on who's been relegated.

An absolute joke and not acceptable for anyone involved in this year's relegation battle. Luton could finish 17th, spend a month planning for another season in the Premier League, and then have the rug pulled from under them when another team's appeal gets them some points back.

[Dave]

It won't be too bad if we finish 17th then given we make a snail look quick when it comes to doing anything in the transfer market anyway.

[Stan]

Forest to find out their punishment on Monday. 

[Dave]

I wonder if they'd still appeal if its, let's say, 2 points.

[RandoEFC+]

If they get anything less than 6 points there'll be uproar from Everton. Their breach is supposed to be at least as large as our first one (if that's not true then I'll reassess) and their mitigation seems to be that they held out for more money for Brennan Johnson even though they knew they'd have to sell by June 30th for the sake of that financial deadline - not that I agree with this rule but that's what we had to do with Richarlison instead of bartering for more money to keep our heads above water the year before.

I don't want to be a hypocrite on this but Everton had so many complications they couldn't have done anything about, alongside their incompetence, mainly the loss of loads of stadium funding due to the Ukraine war and sanctions on Usmanov. Forest threw so much money around last season that in the space of two transfer windows they signed more players than you can physically register in your squad. That's just mental and for me is a much worse offence as far as what these rules were supposedly designed to prevent.

None of this changes the fact that I think these rules should be ripped up yesterday but under the framework we're working with here, Forest surely deserve at least as much of a punishment as Everton. After our appeal board ruled that it was inappropriate for us to get a larger points penalty than what you'd get for administration (9 points), I don't see how Forest will get anything over 8 if that but surely they can't get less than us.

[Stan]

4 point deduction.

[Dave]

It feels like the precedent has been set now for Everton to get a 4 point deduction for the second breach, effectively cancelling out the 4 points they got back on appeal.

I really hope any appeal is all settled before the last game of the season. Its not fair on anybody otherwise and devalues the competition.

[Lucas]

At this point, I really couldn't tell you what's right or wrong in terms of the actual deductions.

All I do know is, signing 30 odd players under those terms has got to be gaining an unfair sporting advantage on the field and should feel significantly harsher than 4pts.

Fingers crossed, the Football gods are making everything right in the universe anyway, especially if we get promotion.

 

[Stan]

14 minutes ago, The Palace Fan said:

It feels like the precedent has been set now for Everton to get a 4 point deduction for the second breach, effectively cancelling out the 4 points they got back on appeal.

I really hope any appeal is all settled before the last game of the season. Its not fair on anybody otherwise and devalues the competition.

It almost begs the question that the authorities knew a 4pt hit was coming, so that's why the gave Everton that amount back. It all just seems like arbitrary figures and it's difficult to see any particular reason for a specific number of points to be deducted. What warrants a 10pt hit, or a 6pt hit, or 4pts etc.

Maybe I'm being cynical or don't fully understand the complexity of it all. 

[Stan]

10 minutes ago, Lucas said:

At this point, I really couldn't tell you what's right or wrong in terms of the actual deductions.

All I do know is, signing 30 odd players under those terms has got to be gaining an unfair sporting advantage on the field and should feel significantly harsher than 4pts.

Fingers crossed, the Football gods are making everything right in the universe anyway, especially if we get promotion.

 

Genuine question as I don't know Leeds' financial situation - are you at risk of a points deduction if promoted?

[Dan+]

I'm assuming Everton got 6 points based on being in the league three years while Forest were in it two, but could be talking complete rubbish.

Ours is imminent as well and make no mistake we are the biggest losers in this if it pans out how I expect. I don't know what our penalty will be exactly but we'd likely be the only club to get one, we went down anyway, and we wouldn't have the luxury of being in the league with Burnley and Sheffield United - meaning there's no way both Forest and Everton could go down anyway.

I've said it elsewhere but I really wonder at what level they're deliberately sabotaging the game. It's like an attack on the fans.

[RandoEFC+]

Forest getting a smaller deduction than us seems like absolute horse shit for reasons I've already gone into. We need to be going all out to have our second breach thrown out entirely if this is the case.

[RandoEFC+]

Yeah I mean come on now. What the actual fuck is this? They gave us 10 points and reduced it to 6. Then Forest get 4 for a breach that's "77% worse than ours"?

This whole thing stinks (again). They're making it up as they go along. It should be an absolute scandal that these points penalties are getting applied when there's no published formula for working out how much.

Unless there's some seriously good mitigation from Forest then by this point I think Everton need to be considering legal action, even if we don't get a further points deduction.

Look at this from LAST MONTH as well .