Nottingham Forest’s outstanding season will already have a favorable influence on the balance sheet for the next year.
Whatever happens between now and the conclusion of the season, Nottingham Forest has already had a memorable Premier League season.
Twice European Cup winners and one of English football’s most illustrious clubs, the Forest story has mostly been one of woe, struggle, and heartache during the last 30 years.
But Nottingham Forest in 2025 is a completely different machine, one that has been defying expectations since the start of the season and shows no signs of slowing down in its pursuit of UEFA Champions League football next season, with the club still very much in the title race.
Forest’s 3-2 victory over Southampton at the weekend reduced the distance to leaders Liverpool to six points, while also creating a six-point cushion between themselves and Manchester City and Newcastle United in fourth and fifth place, both on 38 points.
The job that Nuno Espirito Santo and his side have done this season has been nothing short of remarkable, and the benefits of what happens this season, if the current trajectory continues, could provide the basis for the club to kick on to new levels on a more sustainable footing, able to invest more money into the product on the pitch, something that owner Evangelos Marinakis has been wanting to do for a long time, only to be hamstrung by the Premier League’s profit and sustainability rules (PSR), of which Forest were in breach last season and docked four points.
The Situation with PSR
For starters, PSR as we know it, in which clubs are allowed to lose £105 million over three years less allowable deductions for infrastructure, academy, community activities, and women’s football, is nearing the end of its life. The current fiscal year 2024/25, which for Forest ends in June, will be the penultimate year considered throughout the three-year assessment period before financial controls are replaced by a squad cost ratio similar to what UEFA already has in place across its competitions.
This is where the spend on transfers, including amortisation costs, wages, management and backroom severance pay, and agent fees, is compared to revenue to determine a percentage. Clubs will be allowed 80% initially, with the expectation that they will reach 70% over the next several years, the lower figure applicable to those who qualify for European football.
Forest have lost £46 million and £67 million in the last two fiscal years, respectively, but they will be below the PSR threshold for 2024/25 after the Premier League confirmed earlier this month that no clubs had been found to be in breach for the current fiscal year, with clubs required to submit their 2023/24 accounts to the league by the end of December for assessment.
For the final 2024/25 financial year, Forest’s task will be easier as they will be afforded the ability to have the £105m figure as opposed to the £83m sum they had been judged against for the three years up to to 2024 due to having one season in the Championship during that cycle, where the loss limit is £13m.
Projections from football finance expert Swiss Ramble estimates Forest’s PSR room for manoeuvre for the current fiscal year at £72 million, allowing them to lose money while being PSR compliant. The club will now focus on maintaining compliance with the squad cost ratio restrictions that are set to go into force.
Final placements
If Forest finishes this season in third place, before we even consider what Champions League football money will look like, the club’s decline in cash received by the Premier League during the summer will be significantly increased.
Forest ended one place higher than the bottom three in 2023/24. During the campaign, they appeared in 19 live games. Forest collected a total of £123.3 million in Premier League central payments, which are allocated to clubs as a result of the huge local and international media deals in place.
Forest received £11.3 million in merit payments from the UK and international markets based on their final position in the table, with £6.8 million from the domestic market and £4.5 million from the overseas market. That was for finishing seventeenth.
Using the same numbers, if Forest finished third, they would earn a staggering £50.7 million in the summer, with £30.4 million from the home market and £20.3 million from the overseas market. This represents a £39.4 million increase, a 349% increase year on year, and money that will be received in a lump sum and accounted for in the fiscal year 2025/26. It would significantly increase the numbers and the club’s cash flow during an expensive time of year.
If the current trajectory continues, the club could hope to be featured in more games starting next season, which would be funded by facility fees. Forest earned £16.9 million in 2023/24 for 19 games, which equates to approximately £890,000 per game.
European dream
The Champions League bounty would be significant, also. For the 36 clubs that make it into the revamped league phase of the Champions League, which came into effect this season, there is a total €670m (£575m) to be shared equally. Forest would therefore be entitled to €18.62m (£16m). There are then eight matches in this round to play, with the bonuses set at €2.1m (£1.8m) per win or €700,000 (£601,000) per draw.
After eight matches, this will form an overall league table featuring all 36 teams involved. Referred to as ‘shares’, the higher the finishing place the more ‘shares’ a club will receive. One share is €275,000 (£236,000), therefore, the 36th-placed side would take home one share €275,000 (£236,000) -from the league system, whilst the team that finishes top wins 36 shares, or €9.9m (£8.5m).
Additionally, the clubs that place between first and eighth in the league will be given a €2m (£1.7m) bonus, and those placed ninth through to 16th will be awarded an extra €1m (£859,000).
Should Forest progress to the knockout stages they will be in the hat for further lucrative cash prizes. This begins with the play-off round, with teams bagging €1m (£859,000) for qualifying. To play in this round, a team must place between ninth and 24th in the league system.
The league system’s top eight teams plus the eight that progress from the play-offs will be awarded €11m (£9.4m)each just for reaching the round of 16.
Qualification for the quarter-finals earns a club €12.5m (£10.7m), qualification for the semi-finals earns a club €15m (£12.8m), and lastly for reaching the final the prize is €18.5m (£15.8m).
Finally, the competition’s winner earns€6.5m (£5.5m) for lifting the trophy, and would later earn €4m (£3.4m) for competing in the following season’s UEFA Super Cup. The potential to earn significant sums is huge, and potentially transformational for a club of Forest’s size and ambition.
Financial growth
It’s also worth taking into account the additional revenue from home games that would arrive given that the expanded format has eight games, four of those that would arrive at the City Ground.
Looking at the most recently available financials for Forest, covering the 2022/23 period, the club made £11m in matchday revenue for 22 games, 19 of them in the Premier League.
The return to top-flight football ensured sell-outs each week. To use a rough guide, Forest made £500,000 per game. Adding in four additional home games would add another £2m at least to the pot for the club, potentially more given the potential for higher ticket prices for the games, as was seen at Aston Villa this season.
Then there’s the commercial element. Forest would be more appealing to larger businesses who value the exposure that Champions League football provides, implying that the value for new partners or those looking to renegotiate terms might be greatly increased.
The flip side of success is that contract renewals would be more expensive, and bonus payments could be considered. Another factor to consider is what Forest is expected to pay any new recruits, as well as any transfer fees that may be required.
They would be in a new market, a more expensive one, and players, agents and clubs will know they have more money in their back pocket to shell out, which could see them forced to pay more than they have had to do to get to this point.
But those are problems which come with success, and when they become problems it means that the club is heading in the right direction on the pitch.
This season has the potential to influence Nottingham Forest’s financial trajectory for years to come, which has implications for what occurs on the pitch and ensuring that this season isn’t an exception but rather a preview of what is to come in the future. In any case, far larger sums are expected to arrive at the City Ground beginning next season.
