Nottingham Forest PSR is one of those phrases that turns up every time the Reds are linked with a signing, usually delivered with a knowing shrug and no explanation at all. Forest know the rules better than most English clubs — they were docked four points under them in 2024 — and the way the accounts work now shapes almost every decision made at the City Ground. Here is what profit and sustainability rules actually are, how they applied to Forest, and why a £101m summer did not break them.
What the profit and sustainability rules actually say
The Premier League’s profit and sustainability rules cap how much a club is allowed to lose over a rolling three-year assessment period. For a side that has spent all three of those seasons in the top flight, the ceiling is £105m — an average of £35m a season. Any year spent in the Championship inside that window counts for far less: the EFL’s own allowance is £13m a season, so each Championship year drops the permitted total by £22m.
Crucially, not everything counts against the number. Clubs are allowed to strip out spending on infrastructure, on the academy, on the women’s team and on community work before the loss is calculated. That is deliberate. The rules are designed to stop clubs gambling on wages and fees they cannot fund, while leaving them free to build stands, pitches and youth systems. The framework is published by the Premier League in its annual handbook.
Why Forest were docked four points
Forest were charged in January 2024 for exceeding the permitted loss in the assessment period ending with the 2022/23 accounts — a window that covered the club’s promotion year and the enormous squad rebuild that followed it. Because two of those three seasons had been spent in the Championship, Forest’s ceiling was not £105m but a much smaller figure, and the club came in roughly £34.5m over it.
An independent commission imposed a four-point deduction on 18 March 2024. Forest appealed, the appeal was dismissed the following month, and the deduction stood. The Reds stayed up anyway, finishing 17th, but the episode left a mark: it is the reason every subsequent window has been planned with an eye on the June accounting date, and the reason the club’s financial people matter to recruitment just as much as the scouts.
Amortisation: why a £50m signing is not a £50m hit
This is the part that trips most supporters up, and the part that explains how Forest keep signing players. A transfer fee does not land on the accounts in one lump. It is spread — amortised — across the length of the contract, up to a maximum of five years under Premier League rules.
Take a hypothetical £50m signing on a five-year deal. For PSR purposes that is not £50m this season; it is £10m a year for five years, plus the player’s wages. Sign the same player on a three-year deal instead and the annual charge jumps to £16.7m. Long contracts are not romance, they are accounting.
Player sales work the opposite way, and this is where the real money is. When a club sells, the profit is booked immediately and in full — the fee received minus whatever is left of the original fee on the books. An academy graduate cost nothing to buy, so every penny of his sale is pure profit. That asymmetry is why so much business across the league happens in the last week of June rather than the last week of August.
Nottingham Forest PSR: where the Reds stand now
Forest spent around £101m in the summer of 2026 and made five first-team signings: Ousmane Diomande from Sporting CP for a reported £34m, Liam Delap from Chelsea for a club record fee, Daniel Muñoz from Crystal Palace on the eve of deadline day, plus Xaver Schlager and back-up goalkeeper Steven Benda on free transfers. Our full rundown of Forest’s 2026 ins and outs has the complete list.
That looks like heavy spending, and it is. But run it through the machinery above and it is comfortably absorbed, for two reasons.
First, amortisation. Spread across long contracts, roughly £101m of gross spend becomes a considerably smaller annual charge — a fraction of the headline figure in any single accounting year.
Second, and far more importantly, Forest sold. Elliot Anderson joined Manchester City in a deal reported at around £116m, a single transaction that generated an enormous accounting profit in one go. Taiwo Awoniyi went to Coventry City for £9m, David Carmo and Jota Silva both left for Olympiacos, and Omar Richards joined Aris. Set against that, a £101m outlay spread over several years is not a PSR problem at all — it is a club recycling one exceptional sale into five squad additions. The Anderson fee sits at the top of Forest’s record sales by a distance.
What it means for January
The window closed on 1 September and does not reopen until January, and the mid-season market is a different beast under these rules. A club buying in January is buying with only half a season of use before the next accounting date, which makes the value equation harder, and any incoming fee still has to be funded from somewhere.
Forest’s position going into it is unusually healthy. The Anderson sale has already been banked, the summer additions are spread across long deals, and there is no distressed selling to do. That is not the same as a blank cheque — no Premier League club has one — but it does mean the Reds should be able to act if Oliver Glasner identifies a need. We have looked separately at what the squad still needs after the summer.
The bigger picture
The Premier League has spent the last couple of seasons working towards a squad-cost model — capping spending on wages, fees and agents as a proportion of a club’s revenue, in line with UEFA’s approach — rather than relying on a pure loss cap. Any switch would have to be voted through by the clubs, and until one takes effect the £105m rolling limit remains the rule that matters.
For Forest, the principle underneath it will not change whatever the framework ends up being called: revenue sets the ceiling. That is why the City Ground expansion, which would take the capacity from around 31,000 towards 52,500, is a football story as much as a planning one. More seats mean more matchday income, more income means a bigger permitted spend, and a bigger permitted spend means a squad capable of competing with clubs whose grounds hold twice as many people.
Ten thousand extra season tickets is not as exciting as a deadline-day signing. In the long run, under any version of these rules, it buys more of them. Club announcements on Forest’s financial results and transfer business are published on the official website.
