Why Leeds United will not face Nottingham Forest-style points deduction after transfer deadline missed — YEP 3/7/24
By Joe Donnohue
Leeds United are not expected to be hit with a points
deduction or similar Profitability and Sustainability-related penalty in
connection with submission of the club’s 2023/24 financial accounts.
United were thought to be under pressure to report Archie
Gray’s £40 million sale to Tottenham Hotspur in last season’s accounts, for
which the deadline passed on June 30.
However, due to Leeds’ efforts to conclude a transfer having
begun before the deadline, the club can provide paperwork to the relevant
authorities - the Premier League and EFL - allowing them to backdate their July
2 sale to the 2023/24 accounting period.
Nottingham Forest were hit with a four-point deduction last
season having previously breached the Premier League’s financial regulation
controls. The club were unsuccessful in an appeals process to have the
deduction chalked off, or at least reduced, as they battled against relegation
from the top flight.
Part of Forest’s argument hinged upon the sale of Brennan
Johnson, who joined Tottenham Hotspur in a £47.5 million transfer on September
1, 2023 - deadline day of last summer’s window.
The Midlands club argued ‘the sale of Johnson shortly after
the PSR assessment period had ended should have been regarded as a mitigating
factor at the initial hearing, back in March, as they had constantly kept the
Premier League informed of their intention to sell the academy product to keep
them the right side of loss limits’, according to a report in The Athletic
earlier this year.
A crucial difference in this move compared to Gray’s Spurs
switch is Leeds have concluded their business within 48 hours of the PSR
accounting deadline having passed. In Forest’s case, Johnson’s sale took two
months.
‘Forest failed to sell Johnson before June 30, 2023 — the
cut-off for their PSR accounting period — but argued in the original hearing
that Johnson’s eventual transfer on September 1 ought to be considered a “near
miss” and that “the closeness of the miss constituted a mitigating factor”’,
the Athletic stated after the club’s appeal was rejected back in May.
Forest also made attempts to argue their case was not so
different from Sheffield Wednesday’s successful appeal to the EFL in 2019. The
Owls were charged with breaching PSR but successfully argued against their
sanction on the basis that Wednesday had sold their Hillsborough Stadium to
owner Dejphon Chansiri for £60 million one year prior, demonstrating a means of
complying with financial controls.
The deal in question was not ratified until 17 days after
the relevant accounting period but Leeds’ Yorkshire rivals successfully argued
the deal was a ‘significant mitigating factor’ and consequently escaped
punishment.
Given how promptly Leeds announced Gray’s departure after
the accounting deadline, coupled with Wednesday’s 17-day precedent with the EFL
and the difference in circumstance to Johnson’s Spurs move, it remains unlikely
the club will be hit with a sanction.
Moreover, Leeds would only be penalised if they were found
to have breached their £83 million loss threshold over the accounting period
July 2021 to June 2024, which is not expected to be definitively ascertained
until the New Year when the club’s 2023/24 accounts are released to the public.