Everton were given a 10-point deduction this season for breaching the Premier League’s profitability and sustainability rules.
The club was referred to an independent commission in March over alleged breaches relating to the 2021-22 season and a hearing was held last month.
Everton could have been fined or subjected to a transfer embargo, but the Premier League has now confirmed the punishment of a points deduction that would see Sean Dyche’s side drop to 19th in the table, above only bottom-placed Burnley due to the Goal difference.
A Premier League statement said: “An independent commission has fined Everton FC an immediate 10-point deduction for breaching the Premier League’s Profitability and Sustainability Rules (PSRs).”
“The Premier League lodged a complaint against the club earlier this year and referred the case to an independent commission. During proceedings, the club admitted breaching the PSRs for the period up to the 2021/22 season, but the extent of the breach remained disputed.
“Following a five-day hearing last month, the Commission found that Everton FC’s PSR calculation for the relevant period resulted in a loss of £124.5 million, as claimed by the Premier League, which was the threshold allowed under the PSRs of 105 million pounds. The commission concluded that a sporting sanction should be imposed in the form of a deduction of 10 points. This sanction has immediate effect.”
Everton, who previously said they would “vigorously defend” their position, plan to appeal the sanction, calling it “totally disproportionate and unfair”.
Premier League table with Everton’s 10-point penalty
| POS | TEAM | PLAYED | W | D | L | GD | POINTS |
|---|---|---|---|---|---|---|---|
1 | 12 | 9 | 1 | 2 | 20 | 28 | |
2 | 12 | 8th | 3 | 1 | 17 | 27 | |
3 | 12 | 8th | 3 | 1 | 16 | 27 | |
4 | 12 | 8th | 2 | 2 | 9 | 26 | |
5 | 12 | 8th | 1 | 3 | 12 | 25 | |
6 | 12 | 7 | 0 | 5 | -3 | 21 | |
7 | 12 | 6 | 2 | 4 | 14 | 20 | |
8th | 12 | 5 | 4 | 3 | 4 | 19 | |
9 | 12 | 5 | 2 | 5 | -1 | 17 | |
10 | 12 | 4 | 4 | 4 | 5 | 16 | |
11 | 12 | 4 | 4 | 4 | 2 | 16 | |
12 | 12 | 4 | 3 | 5 | -4 | 15 | |
13 | 12 | 4 | 3 | 5 | -4 | 15 | |
14 | 12 | 3 | 4 | 5 | -4 | 13 | |
15 | 12 | 3 | 3 | 6 | -10 | 12 | |
16 | 12 | 2 | 3 | 7 | -16 | 9 | |
17 | 12 | 1 | 3 | 8th | -12 | 6 | |
18 | 12 | 1 | 2 | 9 | -21 | 5 | |
19 | 12 | 4 | 2 | 6 | -3 | 4* | |
20 | 12 | 1 | 1 | 10 | -21 | 4 |
A club statement said: “Everton Football Club is both shocked and disappointed by the decision of the Premier League Commission.
“The club is of the opinion that the commission has imposed a completely disproportionate and unjustified sporting sanction. The club has already announced its intention to appeal the decision to the Premier League. The appeal process will now begin and the club’s case will be heard in due course by an appeal panel appointed in accordance with Premier League rules.
“Everton maintains that it has been open and transparent in the information it has provided to the Premier League and that it has always respected the integrity of the process.” The club does not accept the finding that it failed to to have acted in good faith and he does not believe that this was an assertion made by the Premier League during the course of the proceedings. Both the severity and severity of the sanction imposed by the Commission do not fairly or adequately reflect the evidence presented.
“The club will also follow with great interest the decisions made in all other cases relating to the Premier League’s winning and sustainability rules. Everton cannot comment further on this matter until the appeal process has been completed.”
What are profitability and sustainability rules?
All Premier League clubs are audited every year to ensure they comply with the competition’s profitability and sustainability rules.
Compliance with these rules will be assessed based on the club’s PSR calculation, which is the sum of its adjusted pre-tax profits for the relevant assessment period.
Rules dictate that clubs can lose a maximum of 105 million pounds ($128.4 million) in three years, but Everton posted losses of 370 million pounds between 2018 and 2021.
In a statement in March, the club said it was “fully confident” it would comply with all financial rules and regulations.
Has this happened before?
Everton’s hearing is only the second time such action has been taken after Manchester City faced more than 100 financial fair play allegations last season.
The outcome in the City case has not yet been announced. The Athletic reported that it would likely take a long time to reach a verdict that could be appealed.
Earlier this year, Chelsea’s new owners self-reported incomplete financial information related to transactions that took place during previous owner Roman Abramovich’s tenure between 2012 and 2019.
European governing body UEFA fined it 10 million euros (8.6 million pounds, $11 million) for the historic breach in July, while the Premier League and football association continue to investigate.
There have been several precedents in the English football league in recent years, but punishment related to breaches of profitability and sustainability rules in the top flight of English football is unprecedented.
In fact, only twice in the history of the Premier League has a club been given a points penalty.
Middlesbrough were given a three-point deduction for failing to play a competitive game in the 1996/97 season, while Portsmouth were given a nine-point penalty in January of the 2009/10 season after he took over.
Why were Everton referred to the Commission in the first place?
The arrival of Farhad Moshiri in 2016 was supposed to be a game-changer for Everton and the Anglo-Iranian was certainly a generous owner at first.
The first permanent manager under his rule as majority investor, Ronald Koeman, spent around £145 million on players in his first summer as manager, and Moshiri supported the following three managers to a similar extent before Rafa Benitez and Frank Lampard inherited tighter budgets.
This overrun included excessive amounts spent on underperforming players, too few of whom were sold for a profit, leaving the club exposed to FFP rules.
Staying within one’s limits has become a key concern for Everton over the last four years. Without the Covid-19 pandemic and the resulting loss deductions, they would have been in deep trouble sooner.
They introduced a series of cost-cutting measures, including player sales, but developments in March suggested Everton may not be able to fight back sufficiently.
In March 2022, the club posted a loss of £120.9 million in its 2020–21 accounts, prompting scrutiny and the ire of fellow strugglers Leeds and Burnley.
A joint letter signed by Leeds chief executive Angus Kinnear and Burnley chairman Alan Pace is believed to have triggered the Premier League investigation.
What impact could this have?
By Duncan Alexander
Like one of those nightmares where you try to escape your deepest fears only to end up back where you started, Everton’s 10-point deduction has – at least statistically speaking – put them back where they started of the season were.
Opta’s prediction model, which simulates the entire league season 10,000 times, gave Sean Dyche’s side a 34.4 percent chance of relegation before the start of the 2023/24 season.
That figure was carefully reduced to just 3.5 percent after Everton’s 3-2 win at Crystal Palace last weekend, but this sanction has pushed it back up to 34.1 percent and what looks like a four-team relegation battle looked like a pentathlon.
Everton fans can at least point out that even with their points total reduced by 10, they probably only need around 30 points from the remaining 26 games to avoid relegation.
It could be even less: in the 2020/21 season, Fulham finished 18th with just 28 points, and with the three promoted teams all struggling so far this season, a similarly high safety limit of 20 points could be in play again.
(Photo: Getty Images)