Nottingham Forest “will come under pressure” to make a significant player sale this summer if they do not secure promotion, it has been claimed.
The challenges of being competitive in the Championship, battling with teams who benefit from parachute payments, have been laid bare by football finance blogger Swiss Ramble, who has analysed their latest set of accounts. The Reds posted an operating loss of more than £34million when their accounts for the year ending June 2021 were posted earlier this month - a figure which was reduced to £15.5m pre-tax.
The accounts cover a 13-month period, rather than the usual 12-month timeframe, and reflect a full season of playing behind closed doors due to the coronavirus pandemic. Swiss Ramble has compared Forest’s figures with other clubs in the Championship, as well as where they stand in remaining within the English Football League’s Profitability and Sustainability rules.
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Having analysed the accounts, Swiss Ramble wrote on Twitter: “#NFFC said that remaining within the EFL Profitability and Sustainability Rules is a ‘high priority’. I calculate they have just met the target, after allowable deductions for academy, community, infrastructure and COVID (limited to £5m a year), but excluding loan write-offs.
“Like most Championship clubs, #NFFC make large operating losses, partially offset by player trading, as they compete against those with parachute payments. If they do not secure promotion this season, they will come under pressure to sell rising stars like Brennan Johnson."
During the financial year, owner Evangelos Marinakis converted an additional £12m worth of loans to the club into shares, in a continued show of commitment. Total converted equity by the Greek now stands at more than £50m.
That the pre-tax loss of £15.5m is down £500,000 from the previous year also highlights the significant continual investment required from the owner to keep the club challenging in the second tier.
Marinakis and the club’s board have continually placed a strong emphasis on staying within FFP limits since taking over the Reds in 2017. The challenges of doing so in the unprecedented financial climate of the pandemic - with decreases in ticketing and matchday revenue - have also been highlighted.
Swiss Ramble said: “#NFFC £16m loss is around mid-table in the Championship, though only surpassed by Bristol City £38m, Reading £36m and Preston £18m in 2020/21 to date. Many clubs in this division post large losses, though some have managed to restrict this, despite a full year of the pandemic.
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“#NFFC losses would have been even higher without the owners writing-off £73m of loans in the last 6 years, including £5m in both 2020 and 2021. The largest write-off of £40m came in 2017 when Marinakis bought the club from Fawaz Al Haswi.
“Championship revenue is hugely influenced by parachute payments, which are so large that they make it difficult for clubs like #NFFC to compete. Details not published for 2020/21, but in 2019/20 a relegated club received £42m in year one, £34m in year two and £15m in year three.”
