Premier League Rulebreakers: Man City, Everton, & Forest’s FFP Breaches Explained
Author: Rebecca Bailey
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Posted: 1 August 2024
Recent years have actualised the full extent of the Premier League’s power and control. With the authority to fine and dock points from clubs who fail to follow FFP rules, the League has demonstrably shaken the status quo.
With last season’s FFP sanctions putting league titles on the line for some and endangering others with the threat of relegation, meticulous financial conduct is likely to be of the utmost concern for all Premier League clubs moving into next season after witnessing the tumult and distress experienced by those clubs who were, regrettably, careless with their purse strings.
What is financial fair play?
Financial fair play is a UEFA scheme first introduced in 2009 which aims to improve the “overall financial health of European club football.” Clubs must satisfy all FFP rules to qualify for UEFA competitions, and failure to do so can result in a catalogue of disciplinary measures including fines, points deductions, and disqualifications.
UEFA’s FFP requirements include the following:
- No overdue payables – clubs must prove they do not owe money to other clubs, their players, or any social or tax authorities.
- Break-even requirements – clubs must balance their spending with their revenue and avoid accumulating debt.
- Sustainability – clubs must invest sustainably and avoid overspending.
In each three-year assessment period, clubs must not sustain losses of more than €105 million and can only spend up to €5 million more than they earn, though this can be exceeded by direct cash injections from a club owner. Spending on stadiums, training facilities, youth development, and women’s football is excluded from calculations to encourage investment in these areas.
The case on Manchester City’s 100+ FFP breaches is yet to be concluded
In February 2023, the Premier League concluded its four-year investigation into Manchester City’s financial conduct and confirmed it had charged the club with over 100 FFP breaches dating between 2009 and 2018.
Manchester City issued a clear statement at the time, asserting the club “welcomes the review of this matter by an independent Commission, to impartially consider the comprehensive body of irrefutable evidence that exists in support of its position.” The club has continued to vehemently and persistently deny the allegations.
“Manchester City FC is surprised by the issuing of these alleged breaches of the Premier League Rules. The Club welcomes the review of this matter by an independent Commission.”
Since the allegations first surfaced, Pep Guardiola has kept a level head and remained loyal to Manchester City, stating he is “fully convinced we will be [proven] innocent.” He maintains the club is “innocent until proven guilty,” and has been focusing his efforts on the club’s performance on the pitch.
Initially, in February 2023, the Manchester City manager stated: “I support the club and trust what the directors have told me… All I can do is try to win the games.” When pushed for comment in a press conference in April, Guardiola said: “Wait until it’s decided, and I’ll tell you then. You’re questioning me like we have been punished. At the moment, we’re innocent.”
The Premier League are due to hold a hearing into Manchester City’s case. In April, Richard Masters, the Premier League CEO, confirmed “the date is set. The case will resolve itself at some point in the near future.” Though it was originally thought that the outcome of the case would be revealed in 2025, this recent statement suggests that judgement day may come much sooner.
Everton’s FFP breaches cost the club a staggering 8 points this season
The Premier League brought a complaint against Everton in March 2023 for breaching its FFP rules in the three-year assessment period ending with the 2021-22 season. At the time, the club responded by stating its disappointment in the Premier League’s decision, asserting it “strongly contests the allegation of non-compliance,” and that it “is prepared to robustly defend its position to the commission.”
Following a subsequent investigation by an independent commission, the club received a 10-point deduction in November 2023. Everton claimed to be “shocked and disappointed by the ruling.”
“Everton Football Club is both shocked and disappointed by the ruling… The Club believes that the Commission has imposed a wholly disproportionate and unjust sporting sanction.”
The club challenged the decision on the basis that its losses were improperly calculated as being £19.5 million over the £105 million threshold. The club calculated their losses as actually being £9.7 million over the threshold.
The appeal was heard in February and the penalty was reduced to a mere 6-point deduction with immediate effect following the hearing. The club claimed to be “satisfied the appeal has resulted in a reduction,” and to feel “vindicated in pursuing its appeal.”
At the time, Everton manager Sean Dyche commented: “We’re pleased we have got something back… The league table looks different, and now it is about using that wisely and stepping on.” Dyche also commended the team for remaining focused and “pretty steadfast” in their performance levels while awaiting the verdict.
Despite earning back 4 points, the tumult was not quite over yet for the Toffees. The club’s accounts for the 2022-23 season showed a shocking £89.1 million loss, stacking up to a staggering £255 million loss over a three-year period, a clear breach of the Premier League’s profit and sustainability rules (PSRs).
Everton ultimately admitted to a breach of £16.6 million, leading to the club receiving a further 2-point deduction following an investigation by an independent commission. Everton immediately appealed the decision, though this appeal was later withdrawn by the club once their Premier League safety was confirmed.
Forest’s sanctions edged the club dangerously close to the relegation zone
On submitting their accounts for the 2022-23 season, Nottingham Forest were charged in January with breaching the Premier League’s profit and sustainability rules (PSRs) due to “sustaining losses above the permitted thresholds.” Due to spending two seasons in the Championship, Forest’s permitted threshold for losses stood at a reduced amount of £61 million. The club admitted to losses £34.5 million in excess of this.
The club published a bare-bones statement in January merely acknowledging the charge and confirming their intention to cooperate. Forest manager Nuno Espirito Santo remained similarly tight-lipped, commenting that “all the conversations and meetings we have are private. I understand that this is the news but, at the same time, it’s not my concern.”
“We were extremely dismayed by the tone and content of the Premier League’s submissions… this was unexpected and has harmed the trust and confidence we had in the Premier League.”
Following an investigation by an independent commission, March saw Nottingham Forest sanctioned with a crushing 4-point deduction.
The commission were clear in stating the sanction “is not to punish Forest so much as it is to be fair to the other clubs; to give the public confidence.” The Tricky Trees were judged to have taken substantial risks and ignored PSR warnings from the club’s finance director, thus requiring a “proportionate sanction to maintain the integrity of the Premier League.”
In stark contrast to Forest’s January statement, the March statement outlined in considerable detail the club’s dismay at the Premier League’s conduct before the commission, stating the sanction they sought was “utterly disproportionate.” The club highlighted its serious concerns that the commission’s decision “[undermines] the integrity and competitiveness” of the league, has a “disturbing effect… on the operation of the player trading model,” and “destroys mobility in the football pyramid.”
Though Forest appealed the 4-point sanction in late March, their motion was denied by an independent board, leaving the team dangerously close to the relegation zone. Ultimately, the club just managed to remain in the Premier League at the close of the 2023-24 season, finishing in 17th place.
The Premier League and its clubs stand in solidarity with Ukraine. To learn more about the Russo-Ukrainian War, read our explanative piece on The Tangled History Behind the Ongoing Conflict in Ukraine.