| Financial sustainability rules 14:07 - May 7 with 1428 views | pointofblue |
The Premier League's profit and sustainability rules permit clubs to lose £105m over three seasons - or £35m per campaign - but Forest's maximum loss was limited to £61m as they spent two years of the assessment in the Championship.
The club's net transfer spend in the 2022-23 season was £142.8m. They lost an average of £3m across 2020 and 2021 with a further £40m loss in 2022 and £52m in 2023, amounting to a total of £95m.
Forest had been due to receive a six-point deduction - three points for the initial breach and a further three for the size of the breach - but their "early plea" and "cooperation" saw the ban reduced to four points.
https://www.bbc.co.uk/sport/football/live/czq52jwj4ppt?post=asset%3A3db0467f-d76
So are losses across three years - if we get that far - will be limited to at least £61m though will it be lower as we were in League One for the first year?
It's certainly a way of making sure no upstart clubs upset the applecart. |  |
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| Financial sustainability rules on 14:12 - May 7 with 1372 views | SuperKieranMcKenna |
It’s getting to the point where so many clubs are getting, or on the verge of getting points deductions, that you have to ask what is the point of it all.
You may as well spend what you want safe in the knowledge that any breach will see the penalty reduced on appeal, or have the lawyers tied up in knots for years. | | | |
| Financial sustainability rules on 14:24 - May 7 with 1311 views | Pinewoodblue |
League 1 rules totally different. Season just ending we were allowed to show £39m loss over 3 years. We will have the same limit next season Forest have for current season.
Think it is wrong to regard it as an amount you can lose in reality it is a limit on how much you can invest. |  |
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| Financial sustainability rules on 14:29 - May 7 with 1293 views | BrockleyBlue78 |
| Financial sustainability rules on 14:24 - May 7 by Pinewoodblue |
League 1 rules totally different. Season just ending we were allowed to show £39m loss over 3 years. We will have the same limit next season Forest have for current season.
Think it is wrong to regard it as an amount you can lose in reality it is a limit on how much you can invest. |
What does this mean for how much we can spend / invest / lose in 2024/25? How excited should we be getting about transfer budgets this summer?!
And what about Leicester - do we expect them to get a points deduction for 24/25? | | | |
| Financial sustainability rules on 15:17 - May 7 with 1149 views | portmanking |
So what will our 'loss' be limited to?
You'd think our matchday and commercial revenue will be on a par with the likes of Palace, who saw revenues hit nearly £200m in 2023 (inclusive of broadcast money). | | | |
| Financial sustainability rules on 16:40 - May 7 with 950 views | Vegtablue |
| Financial sustainability rules on 15:17 - May 7 by portmanking |
So what will our 'loss' be limited to?
You'd think our matchday and commercial revenue will be on a par with the likes of Palace, who saw revenues hit nearly £200m in 2023 (inclusive of broadcast money). |
Revenue is somewhat at the mercy of league finish. Looking at last season's relegated sides, turnovers were £145M (Saints), £190M (Leeds) and £177M (Foxes). Southampton's broadcasting revenue was £108M, while attendance average was 30.5K.
It's how Leicester got into so much hot water, pegging their spending to an ambitious league finish (and subsequent financial reward). Crystal Palace received £141M broadcasting revenue for finishing 11th (£180M turnover overall).
If we are to be sensible, we should probably use the £108M TV figure for calculating our maximum spend. £108M + our own revenue streams + PSR/FFP headroom (providing the current scheme survives the summer!). | | | |
| Financial sustainability rules on 16:47 - May 7 with 903 views | SmithersJones |
| Financial sustainability rules on 16:40 - May 7 by Vegtablue |
Revenue is somewhat at the mercy of league finish. Looking at last season's relegated sides, turnovers were £145M (Saints), £190M (Leeds) and £177M (Foxes). Southampton's broadcasting revenue was £108M, while attendance average was 30.5K.
It's how Leicester got into so much hot water, pegging their spending to an ambitious league finish (and subsequent financial reward). Crystal Palace received £141M broadcasting revenue for finishing 11th (£180M turnover overall).
If we are to be sensible, we should probably use the £108M TV figure for calculating our maximum spend. £108M + our own revenue streams + PSR/FFP headroom (providing the current scheme survives the summer!). |
This is a very good point. Most of a club’s expenditure will be committed before they know what their main income stream (Sky TV revenue) will amount to. | | | |
| Financial sustainability rules on 17:04 - May 7 with 811 views | portmanking |
| Financial sustainability rules on 16:40 - May 7 by Vegtablue |
Revenue is somewhat at the mercy of league finish. Looking at last season's relegated sides, turnovers were £145M (Saints), £190M (Leeds) and £177M (Foxes). Southampton's broadcasting revenue was £108M, while attendance average was 30.5K.
It's how Leicester got into so much hot water, pegging their spending to an ambitious league finish (and subsequent financial reward). Crystal Palace received £141M broadcasting revenue for finishing 11th (£180M turnover overall).
If we are to be sensible, we should probably use the £108M TV figure for calculating our maximum spend. £108M + our own revenue streams + PSR/FFP headroom (providing the current scheme survives the summer!). |
Okay, so, finger in the air... £150m + PSR/FFP headroom.
In actual fact, a spend of £60-£80m on players doesn't then appear outlandish, so long as wages are kept in check. External funds ring-fenced for infrastructure projects already too! | | | |
| Financial sustainability rules on 17:31 - May 7 with 713 views | USA |
Is there a set criteria for the amount of points deducted as punishment? If not there should be as it seems like it’s finger in the air stuff that makes it more easily challangeable. | | | |
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| Financial sustainability rules on 17:57 - May 7 with 666 views | Vegtablue |
Will be interesting to see if these financial rules and penalties continue into 24/25 (I'm not confident they will, to be discussed in the Prem's June meetings). If they do survive, £150M+ PSR headroom sounds right for max available spend, but we'd need to be cute with our exit strategy should things not go well aha.
To USA's question, this from a law firm's analysis of the Everton decision:
"The Commission rejected an argument put forward by the Premier League that a formulaic approach to sanction should be taken. The Premier League had argued that the appropriate penalty should always be a points deduction, with a fixed starting position of 6 points, and a further increase of one point for every £5m by which the club exceeded the £105m PSR threshold.
However, it’s also worth noting that the Commission left the door open for a new independent regulator to take such an approach. It also noted that the Premier League could amend its own rules (to impose a mandatory structured formula) if it wanted to."
https://burlingtonslegal.com/insight/everton-fc-10-point-deduction-an-analysis-o | | | |
| Financial sustainability rules on 17:58 - May 7 with 650 views | pointofblue |
| Financial sustainability rules on 17:31 - May 7 by USA |
Is there a set criteria for the amount of points deducted as punishment? If not there should be as it seems like it’s finger in the air stuff that makes it more easily challangeable. |
Think it's 10 points then deductions for co-operation and an early plea etc.? | |
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| Financial sustainability rules on 18:05 - May 7 with 618 views | portmanking |
| Financial sustainability rules on 17:57 - May 7 by Vegtablue |
Will be interesting to see if these financial rules and penalties continue into 24/25 (I'm not confident they will, to be discussed in the Prem's June meetings). If they do survive, £150M+ PSR headroom sounds right for max available spend, but we'd need to be cute with our exit strategy should things not go well aha.
To USA's question, this from a law firm's analysis of the Everton decision:
"The Commission rejected an argument put forward by the Premier League that a formulaic approach to sanction should be taken. The Premier League had argued that the appropriate penalty should always be a points deduction, with a fixed starting position of 6 points, and a further increase of one point for every £5m by which the club exceeded the £105m PSR threshold.
However, it’s also worth noting that the Commission left the door open for a new independent regulator to take such an approach. It also noted that the Premier League could amend its own rules (to impose a mandatory structured formula) if it wanted to."
https://burlingtonslegal.com/insight/everton-fc-10-point-deduction-an-analysis-o |
Another thing to consider re. spending is amortisation, I believe?
I think you can now spread the cost of a signing over a max of five years rather than eight. So a £25m deal could cost £5m a year between 2024-25 and 2029-30. | | | |
| Financial sustainability rules on 18:11 - May 7 with 592 views | Vegtablue |
| Financial sustainability rules on 18:05 - May 7 by portmanking |
Another thing to consider re. spending is amortisation, I believe?
I think you can now spread the cost of a signing over a max of five years rather than eight. So a £25m deal could cost £5m a year between 2024-25 and 2029-30. |
Yeah spot on. We need to be responsible with this accounting technique mind, in the event next season misses the mark. | | | |
| Financial sustainability rules on 18:15 - May 7 with 551 views | portmanking |
| Financial sustainability rules on 18:11 - May 7 by Vegtablue |
Yeah spot on. We need to be responsible with this accounting technique mind, in the event next season misses the mark. |
Yeah for sure. Although I guess, so long as you recruit the right players for your money, you can hopefully get it back in the event of relegation. | | | |
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