Everton have been given a 10-point deduction after an independent commission found them guilty of breaching the Premier League’s financial fair play (FFP) rules.
The club plan to appeal against what they regard as a disproportionate and “unjust” punishment and said they were “shocked and disappointed” by the decision and the sanction.
The appeal will be heard before the end of the season but as it stands, Sean Dyche’s men will drop from 14th to 19th place in the Premier League table and be plunged into greater danger of relegation, as they only stay above bottom side Burnley on goal difference.
The Toffees become the first English top-flight club to receive such a punishment for falling foul of FFP guidelines. They are just the third club in the Premier League era to be deducted points for any reason: Portsmouth saw nine points taken away for entering administration in 2010 and Middlesbrough were slapped with a three-point deduction for illegally postponing a game in 1997 – both teams subsequently suffering relegation at the end of the season.
The commission ruled Everton had overspent by £19.5m. The Premier League claimed Everton “submitted misleading information” about the financing of its new Bramley-Moore Dock Stadium, about interest charges on the building of the £760m ground and the commission ruled the club was “less than frank” in its evidence.
A statement from the Premier League read: “An independent commission has imposed an immediate deduction of 10 points on Everton FC for a breach of the Premier League’s Profitability and Sustainability Rules (PSRs).
“The Premier League issued a complaint against the club and referred the case to an independent commission earlier this year. During the proceedings, the club admitted it was in breach of the PSRs for the period ending season 2021-22 but the extent of the breach remained in dispute.
“Following a five-day hearing last month, the commission determined that Everton FC’s PSR calculation for the relevant period resulted in a loss of £124.5m, as contended by the Premier League, which exceeded the threshold of £105m permitted under the PSRs. The commission concluded that a sporting sanction in the form of a 10-point deduction should be imposed. That sanction has immediate effect.”
Last month, the Premier League had recommended a deduction of up to 12 points for the Toffees, as they urged the independent commission to impose a severe sanction.
Everton have been plunged into the relegation zone after the points deduction— (PA Archive)
Everton responded in a club statement that said: “Everton Football Club is both shocked and disappointed by the ruling of the Premier League’s commission.
“The club believes that the commission has imposed a wholly disproportionate and unjust sporting sanction. The club has already communicated its intention to appeal the decision to the Premier League. The appeal process will now commence and the club’s case will be heard by an appeal board appointed pursuant to the Premier League’s rules in due course.
“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 recognise the finding that it failed to act with the utmost good faith and it does not understand this to have been an allegation made by the Premier League during the course of proceedings. Both the harshness and severity of the sanction imposed by the commission are neither a fair nor a reasonable reflection of the evidence submitted.”
Everton had argued their PSR loss for the three-year period was only £87.1m, while the Premier League alleged it was £124.5m. The Merseyside club said their alleged overspend came from "a combination of unforeseen circumstances".
Everton had announced a total loss of over £300m for the three-year period from 2019 to 2022, far above the £105m permitted. However, clubs were also permitted additional losses related to the Covid-19 pandemic and infrastructure costs are exempt, meaning there is a grey area in terms of interest payments on the costs of building Everton’s new stadium.
Everton contend that that is where the discrepancy lies and that it is a matter of the interpretation of accounting. In addition, Everton had a £200m pre-agreement for a naming rights deal for their new Bramley-Moore Dock stadium with USM, Alisher Usmanov’s company, which they had to abandon after Russia’s illegal invasion of Ukraine in February 2022.
In addition, Everton claimed that they planned to sell players for £83m and make a net profit of £49.9m in the summer 2020 transfer window until Covid struck and reduced the market for deals. The Premier League objected to its attempts to exclude a loss of £43.9m from an impact player trading in 2020 from his accounts. They had also claimed for a loss on a star player who was unable to play for them.
Sean Dyche now faces a tougher job to keep Everton up— (PA Wire)
Everton had budgeted to finish sixth in 2021-22 but only came 16th, while they had valued Richarlison at £80m and only sold the Brazil forward for £60m when he joined Tottenham in 2022.
The Toffees have willingly operated under a de facto salary cap and have cut their wage bill over the last 18 months. The Premier League provided the club with financial guidelines and Everton have a net profit of £28m from the last four transfer windows – the third largest, after Leicester and Brighton, in that time. They did not expect a sporting sanction such as a points deduction.
However, the commission concluded Everton’s previous poor dealings were the initial reason for their problems, writing: “The cause of Everton’s PSR difficulties was the fact that it overspent (largely on its purchase of new players and its inability to sell other players), and because it finished lower in the league than it had projected.”
Manchester City face 115 charges for allegedly breaching FFP rules in a case that has not yet been heard while Chelsea could also face charges relating to former owner Roman Abramovich’s reign.
Everton added: “The club will also monitor with great interest the decisions made in any other cases concerning the Premier League’s Profit and Sustainability rules.”
The Independent has previously reported that an extra layer of political pressure was exerted by the anticipated introduction of an independent football regulator – as laid out by prime minister Rishi Sunak in the King’s Speech earlier this month – with other figures in the sport believing the Premier League is attempting to show the government it can regulate itself.
Eyes will now turn to Burnley, Leeds United and Leicester City, who had threatened to sue the Merseyside club for financial losses should they be found guilty of an FFP breach.
