Why Nottingham Forest failed in their points deduction appeal

Brennan Johnson in action for Tottenham Hotspur
Brennan Johnson in action for Tottenham Hotspur -Credit:Getty

Nottingham Forest’s appeal against their four-point deduction rested on two main points - both of which were waved away by the independent commission hearing their case.

The Reds were back in front of a three-person panel on April 24 to challenge the punishment meted out to them in March. However, the original sanction for their breach of Profitability and Sustainability Rules (PSR) has been upheld.

Forest had argued that the original commission did not take into account the sale of Brennan Johnson to Tottenham Hotspur on deadline day last summer - two months after the end of the relevant financial year - as a mitigating factor. The club also felt not suspending some or all of the points deduction was “a further error”.

READ MORE: Forest 'allegations' revealed as appeal board concludes case with dig at club

READ MORE: Premier League issue Forest statement as points deduction appeal decision confirmed

The Reds had described the basis of their appeal as being on “two distinct and fundamental points of principle”, but the commission said neither argument fell into that bracket. Below, we take a look at why Forest’s appeal was rejected.

The Brennan Johnson argument

Top-flight clubs are permitted maximum losses of £105 million across a rolling three-year period, with this figure reduced to £61m for promoted teams. The Reds were found to have breached their limit by £34.5m.

Central to the club’s case in their original hearing was the sale of Nigel Doughty Academy graduate Johnson. It was their “golden mitigation”.

The Wales international was sold to Spurs for £47.5m on September 1, 2023 - two months after the end of the 2023 financial year. Forest argued that by letting him go late in the window they made more money than if a move had gone through earlier in the summer.

However, at the hearing in March, the commission said such an event could only have been described as a near miss “if it was truly near to the PSR deadline (June 30, 2023) or at the first available reasonable opportunity proximate to the deadline”. Forest, therefore, felt their mitigating factor was not taken into account.

The appeal board asked the question: “Did the Commission err in not treating the sale of Player A (Johnson) as mitigation?” They debated whether the sale of Johnson after the end of financial year 2023 “mitigated or reduced the seriousness” of Forest’s PSR breach.

The appeal board supported the original commission’s verdict. The written reasons for the appeal outcome state that the first commission “was entitled to conclude” the sale of Johnson “did not reduce the seriousness of the breach and did not constitute a mitigating factor”.

Forest alleged “errors” were made in the statements for the original decision. One of those concerns the commission’s suggestion that Forest were “holding out for a higher fee” for Johnson.

The written reasons state: “The club says that this suggestion was contrary to the evidence of Mr Vrentzos (Forest board member Ioannis Vrentzos) that the club thought its negotiating power would decrease in September, as the end of the transfer window approached. Moreover, the commission’s suggestion overlooked the fact that the first reasonable offer for Player A came on 28 August 2023 (just before he was sold to Tottenham Hotspur). The club says that there was no holding out for a better price in relation to offers that would have fully cured or mitigated the breach.

“But as the PL (Premier League) points out, the commission noted that the club rejected offers in July 2023 which, if accepted, would have gone a long way towards clearing the PSR breach. They were rejected because they were below the club’s valuation of Player A. At that time, therefore, the club was holding out for a higher fee later in the window. The commission correctly concluded that looking to make the miss as near as possible ‘was a less important factor, when compared to maximising value/profit’.”

Points suspension argument

Forest felt not suspending some or all of the points deduction was “a further error”. In their appeal, they made “a number of criticisms” of the way the original commission dealt with the “suspension issue”. But the appeal hearing rejected their argument.

The written reasons state: “We reject all the criticisms made by the club of the commission’s approach and reasoning. The question remains whether its decision not to suspend the sanction was wrong.

“We consider that, in a case where a breach of the PSR threshold is sufficiently serious to attract the imposition of a deduction of points, it will rarely be appropriate to suspend the sanction. Fairness to the other clubs and the need to maintain the integrity of the sport will usually require the deduction to be immediate.

“The commission was not only entitled, but right, to say that suspending the sanction ‘would not change anything’. That is why in a case of serious breach the points sanction should be immediate. A breach of the PSR threshold is different from other kinds of breach where a suspended sanction might well deter repeat breaches and thereby serve a useful purpose.

“The scheme of the PSR Rules and Rule W is to ensure that a penalty for breach of the PSR regime is imposed as soon as possible. The rules do not contemplate ‘spreading’ a sanction over more than one season.”

Appeal conclusion

The appeal board said the original ruling was “commendably clear and comprehensive”. In the overall conclusion of the written reasons behind their decision, they seem to have taken a swipe at the club and their legal team.

Summing up their decision, they said: “Some of the criticisms of the decision have involved a minute examination of the words used by the commission. Decisions such as these should not be subjected to microscopic forensic examination and interpreted as if they were statutes which have been drafted by Parliamentary Counsel. Allegations of infelicities of language or errors which are not material to the ultimate decision add to the complexity and costs of proceedings and are rarely likely to lead to a successful challenge of a decision.

“A further practice that adds to complexity and cost is the citation of other decisions on sanctions imposed for breach of the PSR. We have been assisted by being referred to the appeals in Sheffield Wednesday and Everton 1. That is because the decisions in both cases contained statements of general guidance. But reference to individual cases on particular facts is generally unhelpful and should be avoided.

“It is understandable that clubs wishing to appeal against sanction will search for other cases to compare the seriousness of the breach in the instant case with that in other cases. As the numbers of these cases increases, there will be growing temptation to examine them in detail and burden commissions and appeal boards with minute examination of the similarities with and differences from the instant case. Such an approach will rarely be helpful. For the reasons that we have given, we are unanimous that the commission was entitled (and right) to impose the sanction of a deduction of four points and to refuse to suspend it.”

Do you agree with the appeal verdict? Have your say in the comments below