When financial fair play regulations were first proposed, Paul Faulkner, Aston Villa’s chief executive at the time, voted against their introduction.
Now, roughly two decades later, he believes it is time to “tear up profit and sustainability regulations (PSR) and start again”.
Faulkner believes that Everton and Nottingham Forest should escape punishment for PSR breaches, too, as the current rules are “such a mess”.
A hearing to decide what punishment Forest will receive for breaching PSR rules, partly during their first season back in the top flight in 2022-23, will begin on Thursday and is expected to last at least two days. Forest could face a points deduction or a fine.
The six-point deduction Everton have received (reduced from 10 points on appeal) for similar breaches is regarded by some as a potential bellwether for what Forest can expect — but nobody knows for certain what will happen. Faulkner believes the complete lack of guidelines or structure available to the three-person independent panel who will review Forest’s case is one of the main reasons the regulations are not fit for purpose.
“There is an amnesty needed. The authorities need to stop and ask themselves how they can do things in the right way. Is there an approach that will benefit the game?” says Faulkner. “You just wait for things to be made more simple.
“They have cocked this up and they need to accept that and deal with it. There should not be any punishment because it is such a mess. There should be no punishment for Everton or Forest, they should tear up the rules and start again next summer — find a way of doing things that is much, much clearer, where there is a structure in place.
“They are probably hoping that (fellow strugglers) Luton do not win many more games, so that all of this just becomes academic — there is a fundamental problem to be solved here, in how PSR is regulated in the first place.”
Even the panel that heard Everton’s appeal last month — made up of an experienced judge, Sir Gary Hickinbottom, and two King’s Counsel lawyers, Daniel Alexander and Katherine Apps — questioned why there was not more of a sanction structure in place.
The Premier League could have implemented a framework that would deliver “more predictability and transparency” in these cases of PSR breaches, said the appeal hearing verdict. “They have not done so,” the report continued. “Instead, the Premier League and the Premier League board have left this important matter — which affects the position of a club subject to sanctions and (actually or potentially) the relative position of other clubs in the Premier League — to a commission or appeal board.”
Everton had an overspend of £19.5million ($25m) on their allowable losses of £105m over a three-year period. Forest spent two of the three years they are being assessed in the Championship, so their loss limit is lower, at £61m. Faulkner, who was CEO at Villa between 2010 and 2014 and held the same role at Forest between 2014 and 2015, believes the Premier League is in danger of undermining the sporting integrity of its own competition.
“There has to be a system where teams like Forest can be promoted and be allowed to be competitive,” he says. “It is key to any competition and to the long-term health of the game.
“Promoted clubs are, realistically, allowed to lose less money than their new Premier League rivals. How can that be the case? It boils down to sporting integrity again. There is a question of whether that is fair.
“When you come up from the Championship — and Forest did it in a way when they needed to spend more, because they have never had parachute payments and they had a squad that needed rebuilding extensively — you have to invest.
“It was a miracle that Forest stayed up last season. Maybe they have pushed the boundaries of the rules but these stories are what football is about. It was a manager, Steve Cooper, who had thrown things together at short notice and managed to do what he did. It was a great story.
“If you come up and don’t try to make an impact, if you are happy just to be the whipping boys, where is the fun in that? It is not good for the fans or the league. It is anti-competitive. If you want to make it that hard for the teams who come up, you might as well just say there are 16 Premier League teams and there will be no promotion or relegation.”
Since promotion, Forest have invested around £250million on 42 signings to bolster their squad for the top flight. Forest’s defence may hinge on the argument that they always intended to sell Brennan Johnson but they stood to make an extra £20million by doing so later in the window.
The accounting period for which they were assessed ends in June, meaning that they will have been in breach of spending limits when Johnson was still at the club, but Forest were in constant communication with the Premier League.
Tottenham Hotspur had made it clear that they would make an offer for the academy product once they had completed their deal to sell Harry Kane to Bayern Munich — and Johnson eventually moved to Spurs for £47.5m, which is vastly more than the £30million Brentford were offering at the start of the window.
Forest’s case must be concluded by April 15, by which time the club must also have begun any appeals process. The Premier League has put a backstop in place for the appeals process to be completed by May 24, five days after the end of the Premier League season. Everton are also still facing a second round of charges, stemming from breaches during the 2022-23 campaign.
Faulkner is uncomfortable with the prospect of any club being relegated after the season has ended.
“It is just wrong,” he says. “Even if your club ends up staying up in those circumstances, it would feel as though there would always be a giant asterisk next to it.
“I understand that these rules are intended to stop a Portsmouth situation (the only Premier League club to enter administration) from happening again — but if you have the money, why should you not be able to spend it? If you can afford it, then great. The rules are not fit for purpose.”
Faulkner felt that financial regulations would not improve football when he was at Villa.
“We voted against it then, because it was not about having financial sanity in football. We felt that it would be anti-competitive,” he says. “It felt like the ‘Big Six’, or whatever the group was at that point, were pulling the ladder up. We did not vote against it because Villa had plans to spend billions of pounds to secure a place in the top four or anything — it just felt as though there was a fundamental matter of principle.”
Another factor that Faulkner believes should be taken into account is the prospect of Everton and Forest being punished this season, while the situation with Manchester City is allowed to drag on. It is just over a year since the Premier League handed City a charge sheet that included 115 different breaches of its financial rules across nine different seasons.
Why have Manchester City’s Premier League charges not been dealt with yet?
As well as being charged with failing to disclose accurate financial information and managerial remuneration details during a period that began their rise to the summit of English football, Manchester City were also alleged to have breached the Premier League’s PSR during three seasons from 2015-16 to 2017-18. The charges have been strenuously denied by City since the investigation began in 2018.
“What they do with City is so key to all of this for me,” says Faulkner. “You have two teams in the same competition at the moment, one of whom, Everton, have been docked points and one of whom, Forest, haven’t yet — but nobody knows what is happening with City, beyond the fact that they are facing 100-plus charges. So where is the sporting integrity of the competition?
“Once you mess about with the sporting integrity of a competition, it is dangerous. It is about the value of the Premier League. What if City pip Liverpool by a point at the end of the season and deny Jurgen Klopp the send-off he craves at Liverpool?
“If the rules don’t work or if they cannot be transparently applied, you are in a whole world of mess. People want to be talking about the game, not about the accounts.”
