Nottingham Forest have made the first managerial change of the new Premier League season after hiring Ange Postecoglou.
Nuno Espirito Santo is out as Nottingham Forest boss, and while the timing was a little surprising, the end result had been on the cards.
Evangelos Marinakis has weighed up replacements for Nuno since August, after the then-Forest boss admitted a breakdown in his relationship with Marinakis.
Marinakis is a big fan of Ange Postecoglou and has now managed to bring the Australian to the City Ground.
Postecoglou left Tottenham Hotspur over the summer despite winning the Europa League, as a torrid Premier League campaign proved his undoing.
Nottingham Forest’s PSR situation as Ange Postecoglou arrives
Postecoglou was able to spend on the likes of Guglielmo Vicario, James Maddison, Micky van de Ven, Brennan Johnson and Dominic Solanke during his time at Spurs.
Results were mixed, and Postecoglou now inherits a Forest squad that underwent major changes in August.
Arnaud Kalimuendo, James McAtee, Omari Hutchinson, Nicolo Savona, and Dilane Bakwa have all joined Forest in recent weeks.
Postecoglou may fancy some spending money of his own ahead of the January transfer window, but TBR Football’s football finance expert Adam Williams believes there could be some issues on the horizon.
Williams believes that Forest are unlikely to face any problems with the Premier League’s Profit and Sustainability Rules.
Postecoglou was given a healthy budget at Tottenham, both in terms of transfer fees and wages.
Similar spending is unlikely at Forest, but PSR seemingly won’t be a problem for the new boss in the near future.
“There’s a few different things we’re considering when we talk about FFP or PSR,” said Williams.
“PSR only applies in the Premier League. Under that system, Forest aren’t allowed to lose any more than £105m over a rolling three-year period. In previous campaigns, including the one in which they were adjudged to have breached, the limit was lower because they’d been in the EFL during the rolling three-year period. The EFL has a lower loss limit.
“This is PSR on the domestic level. Here, I think Forest are fine. The £67m they lost in 2022-23 is now no longer part of the calculation, plus they made a profit in 2023-24 after player sales. Looking at their wage bill, amortisation costs and other expenses compared to their projected revenue, they are going to have returned to a loss in 2024-25, but not one big enough to jeopardise their PSR compliance for the assessment window up until the end of that season. That will be confirmed in January. And from 2025-26, they have the full £105m allowance.
“So they are okay on the domestic level, although they certainly won’t be able to spend at the levels Ange Postecoglou’s Tottenham did – and that’s both in terms of wages and transfer fees. There was a narrative that Spurs were frugal, but in isolation they were registering nearly £140m in amortised transfer costs during his first year at the club and carrying a wage bill which, despite it being the Premier League’s smallest as a proportion of revenue, was still one of the biggest in the world at £222m.
“Spurs had lots of headroom under both Premier League PSR and UEFA’s financial rules. Forest are okay on PSR, but UEFA’s rules are much trickier,” he added.
Nottingham Forest could face issues with UEFA
Forest look set to face issues with UEFA’s financial rules, both with the Football Earnings rule and the Squad Cost ratio rule.
Williams believes that Forest are bracing for breaches on both fronts, but Postecoglou may not be seriously impacted, with Forest potentially able to agree a settlement and move on.
“They’re limited to losing about £75m for the three-season period, I believe,” said Williams on Forest’s potential issues with UEFA.
“And that’s calculated up until the season they qualified for Europe, i.e up until the end of 2024-25. Even excluding PSR-exempt costs like academy and women’s team investment, it’s going to have been difficult to get within that threshold. UEFA might also revise down some of the profits on the swap deals they did last summer. What’s more, there isn’t the option to do the kind of financial jiggery-pokery that we’ve seen Chelsea, Villa, and Everton do to bypass Premier League rules, because UEFA discounts profits on tangible asset sales like stadiums or the training ground.
“There’s also the Squad Cost ratio rule at UEFA level, which limits Forest to spending 70 per cent of their revenue plus player sale profits on first-team wages and amortisation costs. That’s an annual test, not a season-by-season one, so Forest will be assessed for 2025. That means the costs of dismissing Nuno and hiring Ange will hit them there. I don’t think they will pass either of those tests personally, though we can’t say for certain. The Squad Cost rule in particular seems a bridge too far.
“But in terms of how that affects Postecoglou, I don’t think it will make a huge difference. Forest will probably take the fine, agree a settlement with UEFA and then move on. There could well be a similar system about to be rolled out in the Premier League by that stage next year, incidentally. And in terms of what they can or can’t do in January, if you’re going to breach anyway, it’s probably a case of: in for a penny, in for a pound,” he added.