Everton have been handed a big 10-point penalty after being found guilty by the Independent Commission of violating Premier League Profitability and Sustainability Rules (PSR).
The deduction, the first imposed under the League’s spending regulations and the biggest sporting sanction in English top flight history, comes into immediate effect and puts the club into the relegation zone on only four points.
In the panel’s decision, Everton were found to have exceeded the permitted threshold by a mere £19.5m, although the Commission deemed this to be “a serious breach that requires a significant penalty”.
In the Commission’s report, it was detailed that Everton had admitted to breaching PSR but only by £9.7m, an assertion the Premier League countered with their own calculation that the club had gone over the limit by £19.5m. Mitigating factors put forward by the club’s counsel relating to the outbreak of the war in Ukraine that led to the suspension of key sponsorship deals with USM Holdings; the club’s firing of Player X following his arrest in December 2021; interest paid on costs related to the construction of Everton Stadium; further losses and complications caused by the COVID-19 pandemic, including the inability to raise funds with the sale of Player Y; and the Premier League’s 4% Transfer Levy on transfer fees were all dismissed as considerations.
Instead, the League put forward a number of Aggravating Factors that they felt were appropriate in determining the extent of Everton’s culpability, including “overspend despite repeated warnings”, “misleading the Premier League about stadium interest” and “misleading the Premier League about the intention to sell Player Y”. The Commission decided to eliminate the last factor from consideration and agreed with Everton’s assertion that an improving trend towards PSR compliance went “some limited way to diminish [the club’s] culpability” but ultimately sided with the League on the other factors, agreed that Everton had, to an extent, acted in bad faith, and ruled that only a sporting sanction not a financial penalty would be appropriate for “a serious breach” given owner Farhad Moshiri’s personal wealth.
As expected, the club have announced their intent to appeal what they described as a shocking and disappointing decision in a statement this afternoon:
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.
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 ruling opens Everton up to the prospect of being sued by clubs who were relegated in the past two seasons after the chair of the commission, David Phillips KC, indicated that Leeds, Leicester, Southampton, Burnley and Nottingham Forest all had “potential claims” for compensation.