What the FFP is going on with Man City, Chelsea, Everton and Nottingham Forest?

Here’s the what, why, when and who around Manchester City, Nottingham Forest and Everton’s alleged FFP charges (115 of them in City’s case) and the investigation into Chelsea.

Confused as to what the FFP is going on with the charges around City, Forest and Everton, and the probe around Chelsea? We all are. So here’s a handy explainer of what each club is facing, the processes, and what the consequences could be…

 

Nottingham Forest
Let’s start simple(ish) and ease ourselves in…

Forest, along with Everton (more on that in a bit) have been charged with breaching Premier League Profitability and Sustainability Rules. Not only have they been charged; they have admitted to it.

Profit and Sustainability Rules – the Premier League’s FFP – dictate that clubs cannot make losses of more than £105million over a three-season period, or £35million per season. But Forest haven’t been in the Premier League for the last three seasons. So they are judged against a combination of Football League and Premier League rules which mean they could not make a loss exceeding £61million over the same period.

Forest always appeared vulnerable after chucking around £250million on more than 40 players – largely dross – since being promoted in 2022. But, as part of their mitigation, the club will highlight that they were only in breach for two months.

Their excuse: They held on to Brennan Johnson beyond the end of the accounting period (June 30, 2023) to secure a higher price for their academy graduate. They will also argue that the accounting period should run to the end of the transfer window – which may be a valid point, but they knew the rules.

The fact Johnson is home grown means he represents pure profit for the sake of the books. Forest received offers of between £30million and £35million before the end of June – Brentford were one of the clubs to submit a written bid – but those were rejected in the expectation of higher offers being received before the end of the window. Which turned out to be true. Tottenham agreed to pay £47.5million on September 1.

Will that wash with the Premier League? It hasn’t so far. Forest were in communication with the authorities throughout the summer to keep them abreast of their plan, but being honest about it doesn’t necessarily excuse breaking clear rules.

It is now up to an independent commission to decide what punishment, if any, Forest might face. A fine and a points deduction are possible.

Forest have 14 days from January 15 to respond to the charges before an independent commission hears their case. That process, which could take anything from one to five days, must be completed by early April.

If Forest were to appeal the judgement, it must be heard by the Premier League by May 24 – five days after the final day of the season. So we could have a scenario where the season concludes without clarity on final standings or which division clubs might occupy next term. That’ll be fun, won’t it?

 

Everton
Like Forest, Everton have been referred by the Premier League to an independent commission for breaching PSR. Sound familiar?

Of course it does. Everton have already lost 10 points this season as punishment for breaching PSR in the three years up to June 30, 2022. That judgement, “wholly disproportionate” and “unjust” according to the Toffees, is currently being appealed by the club. That appeal will be heard by an independent appeals commission – a different panel from the original commission.

When? F*** knows. Premier League chief exec Richard Masters said: “It doesn’t really matter when it happens as long as it happens in the season, and it will happen in this season.”

Why do Everton find themselves facing two possible punishments inside the same season? Because the Premier League changed its rules in the wake of their handling of Everton’s 2021-22 case. The process was speeded up to deal with breaches within the same season, putting the Toffees in a uniquely s*** position. A point their lawyers will focus on, you would expect.

They are also likely to make a double jeopardy argument – that Everton are being punished twice for what is much the same period. But the rules around compliance over three-year cycles are clear.

Once the first judgement was passed down for the period up to June 2022, Everton were immediately in trouble for the most recent accounting period. The independent commission that docked them 10 points sided with the Premier League by ruling that £17.4million worth of interest payments for their new stadium project should be included in their PSR calculations, after Everton had argued that they should not. As we know, that verdict is subject to appeal, but until that is ruled upon, Everton had to submit their latest accounts including those interest payments, which appears to have put them in breach again. 

What next then? Everton’s appeal over the first verdict will be heard first, one would assume, since it could impact on how the most recent accounting period – for which they have just been charged – is measured.

For the second breach, the timeline is the same as Forest’s. An independent commission – separate to Forest’s – will rule before early April,. with any appeal perhaps stretching into the week after the end of the season. 

 

Chelsea 
Last August, the Premier League announced an investigation into Chelsea for potential financial rule breaches during Roman Abramovich’s ownership of the club.

The Blues reported themselves, as they did to UEFA, who in July 2023 fined the club £8.6m for “submitting incomplete financial information” between 2012 and 2019.

Chelsea’s new ownership took the steps after uncovering possible issues while conducting their own due diligence before taking over when Abramovich was forced by the UK Government to sell the club in 2022.

Then in November, ‘Cyprus Confidential’, a joint investigation by the Guardian and other international outlets, uncovered files relating to a series of payments, valued at tens of millions of pounds, spread over the course of a decade and ‘routed through offshore vehicles’ belonging to Abramovich.

According to the Guardian, beneficiaries appear to include the agent of Eden Hazard, an associate of Antonio Conte, and other Chelsea officials. Other payments also appear to have been connected to the signings of Samuel Eto’o and Willian from Anzhi Makhachkala.

Where are we now? Richard Masters said on January 16: “On Chelsea, as you know the new owners of Chelsea came forward to UEFA, the FA and Premier League about information of the previous ownership and we are still investigating that. We won’t announce the outcome of that until we have completed the investigations.”

So, basically, we must wait to see what the Premier League comes up with.

The Guardian reported back in November that they had been told by four leading sports lawyers that some of the payments uncovered in the  ‘Cyprus Confidential’ files may have broken Premier League and UEFA FFP regulations. 

UEFA has already fined Chelsea and its scope is limited because of its statute of limitations that enables the European governing body to look back only as far as the 2018-19 season. The Premier League has no such restriction and can delve back as far as it wishes. 

If the Premier League charges Chelsea with rule breaches, similarly to Forest and Everton’s situation, the matter will be referred to an independent commission. If found guilty, on the balance of probabilities, Chelsea could appeal, but that is as far as the club could go.

Manchester City
Oh, boy…

Unlike Chelsea, City have been charged. With 115 (one-hundred and fifteen) alleged breaches of Premier League financial rules over a nine-year period between 2009 and 2018. In that time, City won the title three times.

As well as being charged with failing to disclose “accurate financial information that gives a true and fair view of the club’s financial position” and managerial remuneration details around Roberto Mancini’s contract, City are also alleged to have breached Premier League PSR during three seasons from 2015-16 to 2017-18.

City strenuously deny the charges and said they “look forward to this matter being put to rest once and for all”. That was almost a year ago, in February 2023, when the charges were first filed by the Premier League.

So why is the case still dragging on? Simply because of the volume and complexity of the charges.

City have already successfully defended themselves in legal action brought by UEFA after German newspaper Der Spiegel in 2018 first highlighted alleged wrongdoing. The club were initially banned from European competition for two years but that was overturned on appeal by the Court of Arbitration for Sport later in 2020. So the Premier League know they have to make their charges stick.

A hearing date has been set. But it’s a secret.

When questioned about the frustration of Everton and Forest fans over the speed of their processes compared to City’s, Richard Masters said: “I can understand but they are very different charges. If any club, current champions or otherwise, were found in breach of the spending rules in 2022-23 they would be in exactly the same position as Everton or Nottingham Forest. But the volume and character of the charges laid against City, which I obviously cannot talk about at all, are being heard in a completely different environment. There is a date set for that proceeding. Unfortunately, I can’t tell you when that is but that is progressing.”

The Daily Mail reported in November that the date will be in late autumn 2024.

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