Special report: What Nottingham Forest success this season could mean for club's financial future
Whatever happens between now and the end of the season, this Premier League campaign has already been one for the books for Nottingham Forest.
Twice winners of the European Cup and one of English football’s most storied clubs, for the last 30 years or so the Forest story has, more often than not, been one of woe, struggle and heartache.
But Nottingham Forest in 2025 is an altogether different machine, one that has been upsetting the odds since the beginning of the season and one that shows no sign of relenting in its pursuit of UEFA Champions League football next season, with the club still very much part of the conversation when it comes to a tilt for the title.
The 3-2 win over Southampton at the weekend saw Forest keep the gap to leaders Liverpool to six points, while ensuring a six-point buffer between themselves and Manchester City and Newcastle United in fourth and fifth spot, 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, where clubs are allowed to lose £105m over a three-year period minus allowable deductions for investment in infrastructure, the academy, community initiatives and the women’s game, is in its final throes. The current 2024/25 financial year, which for Forest runs until the end of June, will be the final year taken into account over the three-year assessment period before financial controls are replaced by a squad cost ratio akin to what UEFA already have in place across its competitions.
That is where spend on transfers via amortisation costs, wages, manager and backroom severance pay, and agents fees are calculated against revenue to give a percentage. Clubs will be allowed 80% initially, before being expected to get to the 70% marker over the next couple of years, the lower sum applicable to those who qualify for European football.
Forest have lost £46m and £67m over the last two financial years, but they will be under 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 financial year, with clubs having to submit their 2023/24 accounts to the league before 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 pegs Forest’s PSR room for manoeuvre for the current financial year as allowing them to lose £72m and still be PSR compliant. What the club will now be working towards is ensuring that they comply with the squad cost ratio rules which are to come into effect.
Final placings
If Forest were to finish this season in the position they currently occupy, third, then before we even start to consider what Champions League football money will look like, the club will have a significant uplift in the drop of cash it receives during the summer from the Premier League.
Forest finished one place above the bottom three in 2023/24. It was a campaign where they featured in live games 19 times. As part of the Premier League’s central payments, which are distributed to clubs thanks to the mammoth domestic and international broadcast deals that are in place, Forest received a total of £123.3m.
Of that sum, merit payments from the UK and international markets based on final placing in the table saw Forest bag £11.3m, with £6.8m from the domestic market and £4.5m from the international market. That was for finishing 17th.
Using the same figures, were Forest to finish third then they would earn a mammoth £50.7m in the summer, with £30.4m from the domestic market and £20.3m from the international market. That represents a £39.4m bump, a rise of 349% year on year, and money that arrives in a lump sum and can be accounted for in the 2025/26 financial year. It would provide a significant boost to the numbers and to the club’s cash flow at an expensive time of year.
The club could also expect to be featured on more games from next season were the current trajectory to continue, and that would arrive through facilities fees. In 2023/24 it was £16.9m for Forest with 19 games, working out at around £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 is the commercial element. Forest would be more appealing to bigger brands who value the kind of exposure that Champions League football brings, which means that the value for new partners or those due to renegotiate deals could be significantly higher.
The flip side of the success is that contract renewals would be more expensive, and bonus payments could also come into play. Also a potential impact would be what Forest would be expected to pay any new recruits, and any transfer fees 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 change the trajectory of Nottingham Forest for years to come from a financial point of view, and that is impactful for what happens on the pitch and trying to ensure that this season isn’t an outlier and more a taste of what is to come in the future. Either way, the money is set to arrive in far bigger sums at the City Ground from next season.
