MERSEYSIDE - Everton and Nottingham Forest have been referred to an independent commission by the Premier League on Monday after admitting to breaches of financial rules.
The alleged breaches of the league's profitability and sustainability rules relate to the 2022-23 season and leave both clubs facing the threat of a points deduction.
With Everton and Forest currently embroiled in a relegation battle, that would plunge their top-flight status into severe doubt.
Everton have already been deducted 10 points this season for exceeding the allowable loss thresholds at the end of the 2021/22 campaign.
The Merseyside club are appealing against that sanction, which ranks as the biggest points sanction in Premier League history.
"Everton FC and Nottingham Forest FC have each confirmed to the Premier League that they are in breach of the league's profitability and sustainability rules (PSR)," a Premier League statement said.
"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.
"Commissions are independent of the Premier League and member clubs. The proceedings are heard in private with the commissions' final decisions made public on the Premier League's website."
Both cases have now been referred to the chair of the independent judicial panel, who will appoint separate commissions to determine the appropriate sanction.
- 'Clear deficiency in the rules' -
Everton vowed to "defend their position" in a statement that said: "The Premier League does not have guidelines which prevent a club being sanctioned for alleged breaches in financial periods which have already been subject to punishment, unlike other governing bodies.
"As a result - and because of the Premier League's new commitment to deal with such matters "in-season" - the club is in a position where it has had no option but to submit a PSR calculation which remains subject to change, pending the outcome of the appeal.
"The club must now defend another Premier League complaint which includes the very same financial periods for which it has already been sanctioned, before that appeal has even been heard.
"The club takes the view that this results from a clear deficiency in the Premier League's rules."
Forest's statement was less combative, saying: "Nottingham Forest acknowledges the statement from the Premier League confirming that the club has today been charged with a breach of the league's Profitability and Sustainability Rules.
"The club intends to continue to cooperate fully with the Premier League on this matter and are confident of a speedy and fair resolution."
All top-flight clubs had to hand in accounts for the 2022-23 campaign by December 31 under new rules to ensure any punishments are imposed during the season when the transgression took place.
Premier League regulations allow clubs to lose a maximum of £105 million ($133 million) over a three-season period or £35 million per campaign.
However, Forest spent two seasons in the Championship within the three-year assessment period, with the maximum loss set at £61 million.
Everton are 17th in the Premier League, just one point above third bottom Luton, while Nottingham Forest are four points clear of the relegation zone in 15th.
The bombshell announcement could massively shake up the fight for Premier League survival if points are deducted.
Any hearing would have to be concluded by 8 April, with the final games of the league season scheduled for 19 May.