Finance expert rules out Brennan Johnson transfer defence in £47.5m Nottingham Forest FFP blow

According to a financial expert, it seems improbable that Nottingham Forest’s club-record sale of Brennan Johnson to Tottenham will be acknowledged as a mitigating circumstance in relation to their accusation of violating Premier League financial regulations.

However, Stefan Borson, a former financial advisor for Manchester City, thinks the Reds will come out on top when an impartial panel renders a decision because the accusation only pertains to a single year of the Premier League’s sustainability and profitability regulations.

Forest was reported to an independent panel in January after being accused of breaking the Premier League’s financial regulations. They could be subject to penalties, such as a reduction in points, when they appear before the independent commission the following week.

The fact that Johnson was sold to Tottenham for £47.5 million on transfer deadline day last summer will play a major role in Forest’s defense. The Premier League’s accounting timetable was not met by the sale of the Nigel Doughty Academy graduate. Having turned down lower offers from Brentford earlier in the summer, the Reds contend that by holding out until the very end of the transfer window, they were able to secure a larger transfer fee for Johnson.

The case relates to an assessment of the club’s finances over a three-year period, ending in season 2022/23, so Forest were in the Championship for two of those seasons before winning promotion to the Premier League for the 2022/23 campaign.

Financial regulations state Premier League clubs are only allowed to make a maximum loss of £105 million across a rolling three-year period, or £35m each season. For promoted teams that is reduced, meaning the Reds have been restricted to losses of £61m for the last three campaigns – £13m for the two seasons in the Championship prior to promotion, plus £35m last season. The extent to which the club have breached the limit is not yet known, although they signed a lot of players upon winning promotion to the Premier League.

“Putting them further down the scale, however, is that they only breached one year of Premier League financial fair play and so when a team has been promoted you have an allowance from the EFL for two of the years and a Premier League allowance for one of the years so in essence £61million was the target and in the two years in the EFL they were there or thereabouts, so they may well get away with the first two years of the period – partly because they didn’t breach by very much and partly because the Premier League isn’t going to know how to deal with it because it’s not in their remit.

“I would think that Forest are probably looking at something like two to three points, plus the potential of some aggravating factor around the recklessness of the spending, minus the potential of what the appeal commission describe as the golden mitigation which Sheffield Wednesday had when they sold their stadium which Nottingham Forest are hinting will be Brennan Johnson.

“I think it’s very unlikely that the paperwork surrounding Johnson matches the tone of their appeal, so I suspect they will not get mitigation for Johnson and therefore it will be how big an aggravating factor is the recklessness and how do they deal with this two-year stub period when they were in the EFL.”