Nottingham Forest’s likely qualification for European football this season is an overwhelming positive on the pitch, but financial rules may complicate the achievement for Evangelos Marinakis.
Despite the City Ground redevelopment costing £50m more than expected, Forest are in a strong position financially after suffering at the hands of PSR rules in recent years.
Forest were deducted four points for a PSR breach last season, with the club’s losses being too high over a three-year period to pass the regulations set by the Premier League.
Things have turned around, though, as frugal transfer business led to Forest posting a net spend of just £16m this season to ease any pressure surrounding PSR rules.
The Premier League were supposed to be changing the regulations to a new Squad Cost Ratio system which limits clubs to spending 85% of their revenue, but PSR is to remain in play next season to the benefit of Forest with their £67m loss which helped trigger the PSR breach now out of the calculations.
However, one financial expert has explained that all may not be as comfortable as it seems should Forest qualify for European football due to the differences in UEFA rules.
How UEFA competition could bring financial sanctions on Nottingham Forest
Navigating the financial rules of football is something that will be tedious for Forest fans who would rather just enjoy their side at the City Ground, but the complicated figures involved in the sport have become crucial to the success of teams on the pitch.
Luckily TBR Football’s Head of Football Finance, Adam Williams is well-versed in this area and has spoken to Nottingham Forest News about the financial situation at Forest.
He said: “I can see why Forest fans may have read headlines like ‘PSR staying put’ and been pessimistic, but I think on balance this is probably a positive thing for them.
“Based on projections for their 2023-24 accounts, they would have been over the 85 per cent wages-to-squad-cost ratio that would have been introduced in place of PSR.
“That means they would have had to do some manoeuvring in the summer. The caveat here is that, if they qualify for Europe, they will have to get within UEFA’s 70 per cent squad cost rule.”
According to UEFA, their squad cost rule: “Limits spending on player and coach wages, transfers and agent fees to 70% of club revenue.” This is more severe than the proposed changes to the Premier League rules but as Williams explains, the punishment isn’t severe for the Forest owner.
Evangelos Marinakis will likely absorb any UEFA punishments
Marinakis was furious about Forest’s points deduction as the Premier League’s punishment system is rather severe, something that seemingly can’t be said about UEFA’s equivalent.
Williams explained: “It seems like the fines that UEFA are imposing are very, very negligible.
“I don’t think Marinakis would have any problem paying them. And it likely would be a purely financial measure as opposed to a sporting penalty as they have suffered in the Premier League.”
Given that Manchester United were fined just £257,000 for a breach in 2023, Marinakis will likely ignore the rules and adhere to the much more severe Premier League system.
However, the Premier League have yet to announce when the new SCR system is to be officially in play, which could alter the state of play even further.
Nottingham Forest await details on the Premier League’s SCR rules
After the City Ground redevelopment was moved to 2026, 2025 represents a limbo-like state for Marinakis and Forest as money will need to be saved for the stadium, as well as the funds needed for Nuno Espirito Santo to improve his Forest squad for a continental run.
Speculating about what impact SCR could’ve had on this, Williams said: “Things would have been tighter under SCR, assuming that there wouldn’t have been a PSR-style loss limit in the new rules in any case.
“That said, there is next to no detail about the intricacies of the system the Premier League are considering introducing beyond the fundamentals.
“Once SCR is introduced, things may well get tighter. But this gives them another season to get their house in order and the prospect of European football next season will be financially significant.”
Therefore, the extra year of PSR can be seen as a positive for Forest, but Williams has very little positive to say about the current regulations.
“There’s no doubt the system is a circus at present and, for a system that calls itself ‘Profit and Sustainability Rules’, it doesn’t deliver profit, sustainability or competitive balance. But for the time being, it’s better the devil you know for Forest.”
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