Nottingham Forest’s most recent set of accounts show just how difficult it is for clubs to bridge the gap to the Premier League big boys, according to football finance experts.
In their results for the year ended June 30 2025, the Reds posted an operating loss of £64.9 million which converted to a loss before tax of £78.9m. The previous year, they had recorded an operating loss of £73.3m, converted to a profit before tax of £12.1m.
Record revenue of £221.7m tells the story of Forest’s seventh-placed finish last season. But as they battle for top flight survival this time around, the accounts illustrate the challenge of competing at the right end of the table on a regular basis.
“Just to give you an idea, Forest’s turnover was roughly about a third of what a ‘Big Six’ club will get.” Tom Bason, assistant professor at the Centre for Resilient Business and Society at Coventry University told NottinghamshireLive. “Forest’s income is roughly about a third of what a Manchester United or an Arsenal, for example, are getting; a third of what Liverpool and Arsenal got the previous year.
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“There is a big, big gap. I think it’s difficult to compete. Clubs of that level are going to have to be able to sell players as well as purchase them.”
Bason added: “The headlines from the accounts are there’s a far bigger loss than there had been the previous year. But the positive result the year before, a lot of that had come from player sales. Once you take the player sales out of the way - Forest didn’t sell many players last year - the operating loss is actually less last year than it was the previous year, once you look at the actual operations for the club.
“Last season, compared to the year before, the big difference was that Forest finished seventh compared to 17th. That meant they earned far more money from Premier League TV rights. The amount a club gets is based on where they finish in the league and on how much they are on TV - and I would guess Forest would have been on TV more last season than the year before because of the story of challenging for Champions League.
“The issue with that is, I would have thought this season’s finances will revert back to kind of where they were the previous year in terms of the money that comes in. Realistically, Forest are going to be finishing more in the 17th position of 2024 than the seventh position of 2025.
“Although the headline figure makes it look like a big loss, and yes, there was, but that is largely because of the lack of player sales. There was a very, very low amount of player sales - that were included in those accounts - for a Premier League club. And then the reason the operating loss was less was because the revenue, the money that was coming in, raised so much because of where Forest finished in the league.
“I suspect it (the loss) was a little bit calculated. The club would have known they were not going to breach Profitability and Sustainability Rules, so I would assume there was a little bit of calculation in there and the club knew they were able to spend that money and avoid selling a Morgan Gibbs-White or someone like that.”
The strategic report included in the Reds’ accounts outlines owner Evangelos Marinakis’ continued ambitions for the club, with a reference to targeting “further success in the long-term future”. But there is also an acknowledgement included that player sales remain a way to raise funds if required.
Professor Rob Wilson, a football finance expert at the University Campus of Football Business (UCFB), explained: “Forest’s latest accounts tell a very modern Premier League story built on growth, ambition, and risk, all moving in tandem. Revenues have grown to a record £221.7m (impressive as a new-ish Premier League club) and is driven primarily by Premier League distributions (TV monies) and supported by commercial expansion, reflecting both on-pitch success and improved market positioning.
“That growth is the direct consequence of sustained investment in playing talent and infrastructure (ironically, too, on a breach of Premier League PSR), with a clear strategic intent to establish the club as a credible top-half Premier League operator. Their seventh-place finish and European qualification underline that this is a club translating financial input into competitive output.
“However, the cost of that ambition, though, is more sobering. Administrative expenses have risen to £271.4m - marginally below their entire revenue profile, so they are spending everything that they earn on on-field related things - largely due to player amortisation (transfers and wages), pushing the club to a pre-tax loss of £78.9m.
“Forest are effectively front-loading investment in pursuit of sporting success but doing so in a way that places considerable pressure on profitability and, by extension, regulatory compliance under PSR. The swing from profit to significant loss year-on-year is particularly notable and highlights just how dependent football finance is on timing effects, especially player trading.
“The mitigating factor, and it is a significant one, is ownership support. The club remains reliant on funding from its parent company, with debt being converted into equity and clear assurances of ongoing financial backing.
“In essence, Forest are operating a benefactor model, where sustainability is underwritten rather than organically generated. That is not unusual in elite football, but it does mean the long-term trajectory hinges on continued owner commitment and consistent Premier League status. Strip that away and the risk profile shifts quickly and they will get into serious financial trouble that could be catastrophic for survival (look at Sheffield Wednesday for reference).
“For now, though, this is a club that has chosen to compete aggressively and is, at least in sporting terms, getting a return on that investment - or at least was last year, which is what these accounts cover. If they are relegated, we’ll see some problems.”
Forest know the effects of falling foul of the Premier League’s financial regulations, of course, having been docked four points two years ago for doing so. However, from the 2026/27 season, PSR will be replaced by Squad Cost Ratio which allows clubs to spend up to a percentage of their total revenues on squad-related costs.
“I’ve done some quick figures and I think based on the accounts for last season, Forest would have breached those rules when they come in,” Bason said. “So I think they’d have to make a few changes going forward.
“It’s impossible to tell exactly because not all that information is available in the accounts. I think they would have been touch and go for whether they were breaching in terms of a points deduction. I think the amount Forest breached would broadly have been some sort of fine with the new rules.
“But the club will have known these regulations don’t come in until next season. I assume this will have been a calculated loss this season, in the knowledge they weren’t going to be punished.
“They were a little bit unfortunate with breaching PSR because they were operating to a lower threshold than other clubs because of the time they had spent out of the Premier League. If they’d spent all those seasons in the Premier League, they’d have been absolutely fine with those results.
“PSR was on a three-year rolling basis. Moving forward, it is pretty much going to be season by season, based on what you do within a 12-month period. I think that will perhaps make it a little bit easier for clubs to manage.
“With Forest and with Everton, it was very difficult to know what the punishments were going to be; it’s a lot more set out now in the new sets of rules. There is effectively a buffer zone where any club can breach the first limits and it’s a fine, then they have to breach the other limits before it starts getting close to points deductions. That will hopefully be a little bit easier for clubs to manage.
“I suspect the Premier League would rather be fining clubs than deducting points. The new sets of rules are broadly setting it up so that clubs that breach will be fined, but hopefully it will reduce the amount of sporting sanctions.”
The big question, of course, is what might happen if the remainder of this term does not go to plan. Could Forest find themselves in a sticky situation if they go down?
“No, I don’t think so,” Bason said. “The other thing to note from the accounts is that the owner has converted £89m of debt and changed that into equity, so effectively Forest don’t owe that money any more. I don’t think that means a huge amount for the club but it shows Marinakis is still interested.
“Often when clubs get relegated, they have the choice of being financially stable by selling a lot of players and cutting down the wage bill or trying to ride out a season and get promoted again. The fact Marinakis seemingly still very much has interest in the club, if Forest get relegated they would hopefully be able to do that - perhaps make a loss next season but be in the promotion shake-up.
“Clubs that get relegated receive parachute payments still, which gives them a huge financial advantage over clubs in the Championship. We have seen over the last couple of years how clubs that get relegated have, by and large, been coming back up. The teams that get relegated have such an advantage compared to those clubs already there, in terms of the parachute payments they receive. It would put Forest in a strong position compared to the rest of the league.”
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