Why has the Premier League deducted Nottingham Forest points? How could the ruling affect Manchester City and Chelsea?

Forest have become the second Premier League team, after Everton, to be punished for breaching Financial Fair Play regulations.

Nottingham Forest have been deducted four points for breaking the Premier League’s profit and sustainability rules. The Reds admitted to the breach, which was a knock-on effect of their wait to sell attacker Brennan Johnson last summer.

According to Forest, they rejected several offers - the highest of which was £40 million ($50.89 million) - from Premier League rivals Brentford before the end of June because they expected to receive higher bids later in the transfer window.

Tottenham Hotspur did indeed sign Johnson for £45 million ($57.25 million) at the start of September, but because the transfer was completed after 30 June, it isn’t included in Forest’s financial accounts for 2022/23, which is where the breach took place.

The Premier League’s Financial Fair Play (FFP) regulations state that clubs can have maximum losses of £105 million ($133.58 million) over three seasons, although Forest’s limit was £61 million ($77.61 million) because they had spent two years in the Championship, the English second tier. In 2022/23, they were found to have incurred losses of £95 million ($120.86 million), a figure which would’ve dropped below the threshold if they had sold Johnson before 30 June.

An independent committee dismissed their case and the four-point punishment was handed down, which they are expected to appeal.

As a result, Forest have dropped below Luton Town, who they drew with on Saturday, and into the relegation zone. The two-time European Cup winners are now third from bottom, one point from safety, with nine Premier League games left to play.

The ruling is another warning for Manchester City