Three Everton fans with political and industry clout have written a joint letter to the Premier League voicing their concern at the process by which the Toffees were handed the biggest points deduction in Premier League history.
The club were deducted 10 points in November for violating the League’s Profitability and Sustainability Rules, one more than the deduction with which Portsmouth were hit 14 years ago for going into administration, but have lodged an appeal against the decision which is expected to be heard in the coming weeks.
The harsh censure, roundly criticised by many in the game, plunged Everton back into the relegation zone but a positive sequence of results either side of the League’s punishment helped to drag the Blues back above the dotted line again before Christmas.
Recent results by Luton and a four-game sequence without a win mean that Everton currently sit just one point above the Hatters having played a game more but the hope is that a new independent commission will see sense and either reduce the 10-point penalty or erase it entirely.
In the meantime, in the wake of pressure exerted by Greater Manchester Mayor, Andy Burnham, and Liverpool Metro Mayor, Steve Rotherham, Brendan Barber, Dame Sue Owen and Mark Carney have written to the Premier League to stress their belief that “a sporting sanction was wholly inappropriate for an initial single breach of the PSR rules.”
In the letter to Premier League Chief Executive, Richard Masters and Chair Alison Brittain, Carney, the former governor of the Bank of England, Owen, a former permanent secretary of the Department for Digital, Culture, Media and Sport, and Barber, former general secretary of the Trade Unions Congress, said that they had “no confidence in the process for deducting points from Everton FC” and that they “feel very strongly that the severity of the deduction must be reduced by the new commission assessing the appeal, or, ideally, replaced with a fine. We feel Everton have been unfairly punished for co-operating and making this a ‘quick’ case.”
The letter in full, dated 12 January 2024:
Dear Alison, Dear Richard
EVERTON FOOTBALL CLUB – SPORTING SANCTIONS
We write in a personal capacity as supporters of Everton Football Club, not from the Club itself, or any other institution.
We wish to put on the record our strength of feeling in respect of:
- The general handling of the new processes launched in 2023 regarding the Premier League Profit & Sustainability Rules (PSR). We think a more measured transition to a new regime would have been appropriate, particularly in the wake of the Covid period, and given there is legislation forthcoming covering financial sustainability of football clubs. In Everton’s case we believe a sporting sanction was wholly inappropriate for an initial single breach of the PSR rules.
- The lack of transparency both from the Premier League regarding your guidelines to the Independent Commission on the size of any points deduction, and subsequently from that Commission, having rejected the Premier League proposed guidelines, as to how they calculated the 10 points actually deducted on 17 November 2023.
- The way the process has focussed on the Club owners, with little regard for the views of fans, nor the impact on them, the local community and businesses; disappointing given the key driver of the imminent legislation to reform football governance is “to put fans right back at the heart of football”.
Some of these issues have already been raised with you by supporter Andy Burnham in his letters of 26 November and 2 December 2023, and by Dave Kelly on behalf of the official Everton Fan Advisory Board on 30 November. Since then, concern has only intensified. We elaborate on the three issues below.
Everton FC have of course appealed the degree of sporting sanction, but we are unsighted on their arguments, and the case is yet to conclude.
We recognise this is the first case of its kind to have reached this point. As we say above, we think a more measured transition period would have been appropriate and wonder if that might still be possible. We urge the Premier League to reconsider its approach to ensure actions are fully explained, predictable, proportionate, fair and timely for all.
Finally, we see the timetable for PSR assessment has been accelerated for this year; and that makes it more urgent to reconsider the approach. We would also urge the Premier League to complete the other processes already underway for earlier periods, to ensure fairness.
We are copying this letter to the Fan Advisory Board and Andy Burnham as we have referenced their letters to you. We would be happy for Fan groups to support our letter. We also copy Everton FC as a courtesy.
Best wishes
Brendan, Mark, Sue
ISSUES
Implementation of the Profit & Sustainability Regulations (PSR) & decision that Everton Football Club (EFC) should receive a sporting sanction.
We think a more measured transition to a new regime would have been appropriate, particularly in the wake of the Covid period, and given there is legislation forthcoming covering financial sustainability. The decision on Everton was made earlier than for other Premier League (PL) clubs with more alleged offences, over a longer period, and where an investigation was announced before that regarding EFC.
In Everton’s case we believe a sporting sanction was inappropriate for an initial, and single breach. A fine would have been more appropriate in our view, and this would still have served as a deterrent to others. It does not seem to the lay person that all of Everton’s alleged transgressions conferred a sporting advantage, indeed the arrest and consequent loss of a player (subsequently not charged) was a disadvantage. But clearly the PL and the Independent Commission lawyers felt a sporting sanction appropriate.
We also note that the six Clubs who tried to break away from the PL – surely a bigger threat to the future of the PL than a PSR breach – only received a fine totalling £22m, less than £4m each! They agreed such action in future would involve a 30 point deduction and £25m fine each.
Transparency over calculation of points deducted from Everton Football Club (EFC) by the Independent Commission (IC) and prior guidelines from the Premier League (PL) in respect of a breach of the Profit & Sustainability Regulations (PSR).
We fully support the arguments raised by Andy Burnham on 23 November 2023 and 2 December 2023 regarding the (lack of) process around the PL guidelines proposed to the IC and his request for publication of that proposal and the minutes of the meeting which generated the proposal. He notes that suggestions of adopting sanctions rules akin to those adopted by the English Football League (EFL) were explicitly rejected by shareholders (ie PL clubs). We also note that other PL policies, such as those regarding fan behaviour or Owners & Directors have been discussed with, and agreed by, shareholders. It would be reasonable to expect the approach on sanctions also to have been discussed with shareholders. Predictability is important; everyone knows what happens after two yellow cards; no-one knows what happens with a breach of the PSR.
The size of the points deduction imposed by the IC feels draconian to us as supporters; TV pundits, journalists and groups such as the Football Supporters Association who reacted to the IC decision seemed to agree. Fans feel the points punishment is wholly disproportionate. No-one knows how the 10-point deduction was arrived at, so speculation – as set out below – is inevitable.
- The IC did not explain their decision. All they said was that they rejected the PL guidelines. Yet they came up with the same figure for points deduction. Some, not all, fans have concerns about the independence of the Commission, and perceptions are always important.
- Previous PL points sanctions were less severe (Tottenham were both fined and deducted 12 points in 1994/95 for financial irregularities – with the deduction subsequently revoked, Middlesborough lost 3 points in 1997 for cancelling a game at short notice. PL Rule E37 specifies a 9 point deduction for entering administration (surely a more grave situation than breaching the PSR for the first time); this applied to Portsmouth in 2010, with 10 more points removed in 2012 for doing so a second time.
- The August 2023 PL guidelines submitted in the PL Chief Executive’s unpublished witness statement to the IC is described in the 23 November IC decision as a fixed deduction of 6 points plus a tariff of 1 point for every £5m over the “permitted” 3-year threshold of £105million losses. The PL calculated Everton’s excess loss at £19.5million (18.6%) so advised a further 4-point deduction making a total of 10.
- Where, we wonder, did the fixed 6 points come from? We know the EFL agreed rules back in September 2018, unlike the PL. But EFL decisions on breach of the PSR have not involved such a fixed penalty, rather a tariff1 related to the scale of breach;
- Everton’s loss as calculated by the PL is £19.5m (18.6%) above the PL permitted threshold of £105million over 3 years. Applying the EFL formula, this would imply a deduction of 5-6 points, probably 5 to reflect that there are 24 teams in the EFL leagues compared with 20 in the PL, meaning a given points deduction in the PL sends a club nearer to relegation than in the EFL.
In summary then, we have no confidence in the process for deducting points from Everton FC, and feel very strongly that the severity of the deduction must be reduced by the new Commission assessing the appeal, or, ideally, replaced with a fine. We feel Everton have been unfairly punished for co-operating and making this a “quick” case. The Appeal will now take its course.
We urge the PL to reconsider its approach to ensure actions in respect of PSR are fully explained, predictable, proportionate, fair and timely for all.
- Focus on EFC Owners and disregard for fans and the local community.
We are disappointed about this aspect of the process too. Tracey Crouch MP’s Fan Led Review of Football Governance, published
in November 2021, the Government White Paper in February 2023 and update in September 2023 led us all to believe fans would have more of a say. Legislation to reform Football Regulation & Governance announced in the King’s Speech on 7
November 2023 is expected to enshrine this, so it was reasonable to expect the PL to have made some effort to factor in the likely impact on fans and the local community and businesses in their proposed guidelines. Ironically, the PL published their fan engagement standard just the day before launching action against Everton who share top place in the PL for fan engagement.
Yet, as the Fan Advisory Board’s letter emphasises, the views of supporters were not sought at any point.
A few commentators, such as Ian Byrne MP 2, have alluded to the impact of the IC decision on fans and the local community. We would emphasise the following points:
- Everton fans are extremely worried about their Club’s finances, the state of which of course underlie your decision at the PL to pursue the case for breaking the PSR rules. The severity of the points deduction, not to mention substantial legal costs, will only make things worse. The decision to recommend a sporting sanction rather than a fine is misleading as a points deduction brings with it a loss of revenue; 10 points are worth at least £20 million, about the same amount as the alleged excess loss of £19.5 million. This financial penalty is compounded as attracting commercial investment and sponsorship will doubtless become harder for any club with the spectre of sanctions hanging over them.
- All of this makes it harder to comply with the next set of PSR calculations. We would then hope that PSR calculations can be adjusted to reflect revenue lost from points deductions; higher losses from points deductions have not conferred sporting advantage.
- Fans are feeling there are now plausible scenarios where the club is no longer a going concern; precisely the kind of situation the Fan Led Review of Football Governance seeks to avoid in future. Everton is located in one of the poorest areas of the UK; their economic impact is considerable, directly and through local businesses, and would be even more so if the significant investment in the new stadium comes to fruition. Investment in a new stadium ought to be encouraged.
- Equally important for Everton fans is the social impact of the club which is amongst the best, if not the best in the PL. The work of Everton in the Community3 reaches out to the unemployed, disabled people, veterans, people living in poverty, as well as contributing to the fight against drugs and addiction, all very real issues locally. The Everton Free School4 is unique in providing for 120 13-16 year olds excluded from other schools, and 200 in the Football College – with astonishing success stories. The School seems likely to be assessed by Ofsted as Outstanding.
- Everton’s Blue Family campaign supported over 29,000 individuals and families with urgent support during the COVID-19 pandemic. Since then the Blue Base Pantry provides a food bank available for everybody to access in the local community.
In summary then we feel very strongly that some mitigation should be made to reflect the impact on the fans and local community.
Sir Brendan Barber
Mark Carney
Dame Sue Owen1 The EFL tariff is a 12 point deduction for losses of £15million + (38%) above the permitted £39million 3-year loss. The points deducted are scaled back from 12 for smaller excess losses, for example a loss of £6-8million (15-20%) above the £39million would get a 6 point deduction, a loss of £4-6 million above £39 milion (10-15%) would get a 5 point deduction. Other factors can then be taken into account to vary the scale of the deduction at the margin, or indeed the timing.
2 https://edm.parliament.uk/early-day-motion/61551/sanctions-imposed-on-everton-football-club
3 https://www.evertoninthecommunity.org/about-us
4 https://www.evertonfreeschool.com/about-us/
Meanwhile, Rotherham and Burnham were guest speakers at a special Everton Fan Advisory Board meeting before today’s clash with Aston Villa at Goodison Park.
Burnham, in particular, has been vocal in his condemnation of the points penalty and the process by which the League and the commission arrived at their decision.
“Every single football supporter has a right to know what was discussed with what they called ‘the formula’ for Everton,” Burnham told the supporters assembled at Arnot St Mary.
“We fight for our club but we fight for the game. We must make the football regulator powerful and independent, we need an independent regime with transparent sanctions … we need to see that debate start tomorrow, not just about Everton’s treatment but the wider world of football.