Everton have been hit with a second sanction, with the latest Independent Commission into the Club’s breach of the Premier League’s Profitability and Sustainability Rules (PSR) recommending that they be docked two more points.
The Blues make unwanted history by becoming the first top-flight side to be sanctioned twice, with both punishments being levied in the same season, also without precedent, and still face the possibility of a further points deduction in the months ahead over disputed stadium costs.
As before, this latest points penalty takes immediate effect, reducing Everton’s tally from 29 to 27, drops them one place back into 16th, behind Brentford, and reduces the cushion between themselves and both Luton Town and Nottingham Forest to two points.
The Club have announced their intention to appeal the decision which was based on a breach of £16.6m which, the Commission, chaired by James Drake KC, determined, should initially merit a five-point penalty.
That was reduced by three points on the basis that Everton have already been punished for 75% of the rolling period under consideration for the breach (ordinarily three years but the “Covid-19 seasons” of 2019-20 and 2020-21 have been combined for the purposes of PSR), the Commission’s acceptance of one head of mitigation around the loss of sponsorship revenue from the suspended USM Holdings deals following Russia’s invasion of Ukraine and, like Forest, an early admission of guilt on the Club’s part.
A statement from the Club reads:
In January 2024, Everton were charged by the Premier League for breaching the permitted Profit and Sustainability thresholds for the assessment period ending 2022/23.
The matter was referred to a Premier League Commission, which has today announced Everton will receive an immediate two-point deduction. While the Club’s position has been that no further sanction was appropriate, the Club is pleased to see that the Commission has given credit to the majority of the issues raised by the Club, including the concept of double punishment, the significant mitigating circumstances facing the Club due to the war in Ukraine, and the high level of co-operation and early admission of the Club’s breach.
Everton remains committed to working collaboratively with the League on all matters relating to PSR but is extremely concerned by the inconsistency of different commissions in respect of points deductions applied.
The Club would like to place on record its thanks to the Fan Advisory Board and other fan groups for their submissions during this process, and to all Evertonians for their ongoing patience and unstinting support.
The Club and its legal representatives have begun the preparations to appeal the Commission’s decision.
Everton were first hit with what was a record 10-point deduction in November that plunged the Toffees into the relegation zone at the time. That sanction was later reduced to six points following a partially successful appeal and, despite setting a Premier League record for successive matches without recording a victory, Sean Dyche has managed to keep the Club above the dotted line in the meantime.
This latest decision from the second Commission can be appealed by Everton and, together with Forest’s decision to appeal their four-point penalty for breaching PSR, must be heard and a verdict delivered by 24th May.
That exposes the League to the danger that the 2023-24 season could end before the final relegation places are decided.
In addition, the issue is further muddied by a continuing dispute between the League and Everton around £6.5m associated with the construction of the new stadium at Bramley-Moore Dock. As Paul Joyce of The Times reports, “the League considers that these costs fall to be considered as a loss for the purposes of the PSRs.
“The club contends that these costs are not losses, given that they relate to the construction of the stadium and have been capitalised in their audited accounts. This issue, and the question of whether any additional sanction should be applied, will be resolved by the same Commission at a later date. It is unlikely to be before the end of the season.”
If the new hearing isn’t heard before the end of this season it throws up the possibility of further sanctions being imposed next season.
The Commission report published today noted that, “in fairness to the parties in these proceedings, the Commission decided that the issues [related to stadium interest] which remain cannot be dealt with in accordance with the timetable set out in the Standard Directions.
“The Standard Directions will not, therefore, apply to the remaining issues.”