The Premier League has accused Everton and Nottingham Forest of violating its financial regulations.
Both teams have been submitted to an independent commission for suspected violations of profit and sustainability regulations in their financial reports for the 2022-23 season.
According to Premier League guidelines, clubs are subject to penalties if they exceed a maximum loss of £105m over a three-season span or £35m per season.
Violating these regulations can result in fines or points deductions. Everton is presently contesting a 10-point deduction from a previous charge.
The Premier League stated in a release that both Everton and Nottingham Forest “have each confirmed that they are in breach of the league’s profitability and sustainability rules”.
It added: “This is as a result of sustaining losses above the permitted thresholds for the assessment period ending season 2022-23.
“In accordance with Premier League rules, both cases have now been referred to the chair of the judicial panel, who will appoint separate commissions to determine the appropriate sanction.”
Clubs violate profit and sustainability rules (PSR) if their financial assessment over the relevant period results in a loss exceeding £105m. However, this threshold is reduced by £22m for each season a club spends in the Championship during that relevant period.
Nottingham Forest spent two seasons in the Championship within the three-year assessment period, setting their maximum allowable loss at £61m.
Under new rules aimed at expediting the reporting process and ensuring timely imposition of penalties during the alleged transgression’s season, clubs were required to submit their 2022-23 accounts by 31 December.
The Premier League had a 14-day window from the reporting date to notify clubs of any breaches. Everton currently occupies the 17th position in the Premier League table, holding just a one-point advantage over Luton Town, who are in the relegation zone with an extra game played. Meanwhile, Nottingham Forest is four points clear of the relegation zone in 15th place.