Everton and Nottingham Forest have suffered a points deduction this season for breaking Profit and Sustainability laws. As the Premier League finally clamps down on financial wrongdoers, we take a look to see who is likely to be the next team to receive a points deduction.
Why were Everton and Nottingham Forest docked points?
Everton were docked 10 points earlier on in the season, but after a recent appeal, they had their sanction reduced to just six.
The official ruling states clubs can sustain losses of up to £105m in three years or potentially face penalties. In Everton’s case, they reported losses of £124.5million for the relevant period.
Unfortunately for Toffees fans, this period of uncertainty is far from over, having since been been accused of overspending beyond the allocated £61m losses. This could prompt the Premier League to impose further sanctions in the near future.
Everton have spent £500m on their new Bramley-Moore Dock stadium, which could count for a lot of their losses.
Like Everton, Nottingham Forest have also proven frivolous spenders.
After climbing their way up from the Championship, they were found to have spent around £60m in their final two seasons in the second division, and because Forest have only been in the Premier League for two of the past three years, they are only permitted under Premier League rules to lose a maximum of £61m across that period.
Forest made losses of £45.6m in 2021/22 after being promoted and £15.5m the year before.
The figure they’ve spent whilst being in the Premier League is around £260m. Overall, Forest have spent £320m in the last four seasons that lead to them being docked four points.
Who Will Be The Next Team To Receive A Points Deduction?
Chelsea
Chelsea are among other clubs that could face a hefty points deduction. The club are embroiled in an investigation looking into leaked files that reportedly contain evidence of secret payments that go up to tens of millions of pounds.
These are believed to contain payments made through ‘offshore vehicles’ that were controlled by former owner Roman Abramovich.
Chelsea’s finances were already being looked at by the Premier League as part of an investigation spanning the years from 2012 to 2019. The transactions that have been leaked by The Guardian could lead to the Premier League imposing punishments such as fines or point deductions.
The investigation raised questions over whether this money was declared in official accounts, with it being alleged the transactions were made for the club’s benefit.
Leicester City
Leicester are currently under a transfer embargo by the EFL, as they are being investigated for profit and sustainability rules. The Foxes could face similar punishment to Everton as they have exceeded the £105m losses that they were permitted to make over the past three seasons.
The Premier League have charged Leicester for the losses and for failure to submit their audited accounts to the league for the 2022/23 season, when they were a Premier League club.
Leicester have responded by taking legal action over the Premier League as they feel that they shouldn’t have access to those accounts, given they’re currently a Championship club.
However, it’s unlikely that any action will be taken this season. Leicester are third in the Championship, with a game in hand over Ipswich and Leeds. If they do indeed make a swift return to the top-flight, they may be welcomed back with a points deduction.
Manchester City
Manchester City are likely to face the biggest punishment out of all the clubs as they’ve been charged of committing 115 offences of Premier League sustainability rules.
There is a court hearing for Manchester City but that date has not been made public yet. City were charged back in February 2023 and 14 months later, there is still no verdict.
City have been accused of failing to provide accounts from 2009 to 2018, failure to cooperate with Premier League investigations from 2018 to present day, as well as failure to comply with player and manager compensation from 2009 to 2018.
They’ve also been accused of breaching financial regulations and sustainability regulations from 2015 to 2018 and failure to comply with UEFA’s licensing and financial fair play rules.
How are the profit and sustainability rules changing?
The profit and sustainability rules could be changed as early as summer. The new system will be more aligned with squad cost-to-revenue within UEFA’s sustainability and revenue regulations.
This will limit clubs in European competition to only spend 70% of revenue on transfer fees and wages. The Premier League is looking at allowing clubs to spend up to 85% on squad costs. However, punishments will be more severe if clubs spend more than they are allowed.
This proposal will be looked at in June ahead of the new season. The new rules won’t affect punishments to Manchester City, Chelsea, Everton and Leicester.
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