Every Everton fan and indeed all football fans will have a view on the 10-point penalty imposed on Everton, a founding member of the Football League and Premier League. I posted a lengthy comment (#10) on the ToffeeWeb thread that presented the Statement from Director of Football, Kevin Thelwell back on 23 November. 

Having posted this, I decided it was time for more detailed thought and then to set out how I hope this is going to unfold. There are many fans taking active steps and this is crucial as is the weight of public opinion. The intervention of various Members of Parliament, Steve Rotherham, and Andy Burnham is to be applauded. Everton have submitted our appeal. It is an emotional time for us all; there is, I think, a need to try and be dispassionate and to review again the facts and the way our club and the Premier League has dealt with this matter.

Background

Each club owns one share in the Premier League. Relegation means you lose your share. The Owners have a Charter and there are 10 points in it. Point 10 states:

We believe that all shareholders in the Premier League should have an equal voice. We will conduct our club’s dealings with good faith, honesty and the highest possible standards of professional behaviour and sporting integrity.

The Premier League Rules run to some 438 pages. Each club in its dealings with the Premier League have to act in utmost good faith. E.35 is the rule that says insolvency means a sanction by way of a 9-point penalty. It must be the case that breaching a rule that has such a defined sanction is very serious indeed.

The rules we are dealing with are in Section W. There is no specific sanction. A Commission has complete discretion as to any penalty it may impose. An Appeal Board may allow an appeal, dismiss it, vary any penalty imposed, and vary or discharge any order for compensation. To say the rules are detailed and complex would be an understatement!

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Chronology of Key Events

2013: The Premier League introduce their Profitability and Sustainability Rules (PSR) with effect from 2015. 

March 2016:  Mr Moshiri acquires beneficial interest in Everton FC.

June 2019: Everton borrow £26.25m from Metro Bank for working capital.

23 February 2021: Everton given planning permission for the new stadium which initially is to be funded by Mr Moshiri via Everton with interest-free loans going from Everton to the Stadium Development Company. 

29 April 2021: Everton borrow £150m from Rights & Media Funding for working capital which goes into the same bank account as the Moshiri interest-free loans.

31 August 2021: An agreement is entered into between Everton and the Premier League, giving Everton an extra allowance of £39.3m under PSR in respect of new stadium costs incurred prior to the financial years in which planning permission was granted, subject to conditions which included the PL giving permission for player purchases by Everton. The PL say each time they subsequently gave permission, they cautioned Everton, saying they were not managing their finances and told Everton they were responsible for complying with PSR.

January 2022:  Mr Moshiri now owns more than 90% of Everton FC.

February 2022:  Everton levy all the interest on Metro Bank and Rights & Media Funding loans to the Everton Stadium Company. 

18 March 2022: Everton submit audited accounts for the period July 2020 to June 2021.

31 March 2022: Everton submit PSR calculation for the previous 3 years including setting off £17.4m of interest on Metro Bank and R&MF loans.

28 May 2022: Everton finish 16th in Premier League, Leeds finished 17th, and Burnley 18th. 

30 June 2022: Everton sell Richarlison to Tottenham Hotspur for £60m.

9 December 2022: The Premier League phone Everton Head of Legal Services to say they do not accept some of the setting off exclusions in the PSR figures submitted for 2020-21. It seems it was stated this would be dealt with once the 2021-22 accounts were filed in March 2023.

1 March 2023: Everton file audited accounts for July 2021 to June 2022.

2 March 2023: Everton file their 3-year PSR calculation on the same basis as the previous year, including the loan interest set off.

24 March 2023: The Premier League charge Everton with a breach of PSR and the independent Commission is then set up.

31 March 2023: The Commission decides it is unrealistic to deal with proceedings and any appeal in the current season.

24 April 2023: Everton respond denying that they were in breach of the PSR limit of £105m over the 3-year period ending with 2021-22.

28 May 2023: Leicester City, Leeds Utd and Southampton are relegated from the Premier League; Everton finish 17th, 2 points ahead of Leicester, 5 points ahead of Leeds and 11 points ahead of Southampton.

12 June 23: Barrett-Baxendale (CEO) and Ingles (CFO) leave Everton's Board and their employment. They both subsequently refused to give evidence before the Commission. 

10 August 2023: The Premier League Board adopt a sanction policy for breaches of PSR. By using this calculation, the likely penalty is circa 10 or 12 points. The Commission subsequently refused to adopt the sanctions policy stating that they should act in accordance with the rules which gave them total discretion as to the penalty to be imposed.

4 October 2023: Everton now admit to the Commission for the first time that they were in breach of the PSR rules albeit their calculation was by £7.9m making a breach figure of £112.9m for the 3-year period in question. The Premier League responded with a revised figure of £124.5m making Everton £19.5m over the limit. Everton still claimed an interest allowance for the period prior to the grant of planning permission and the transfer levy deduction totalling together £11.6m.

16 October 2023: Start of the commission hearing behind closed doors which lasted 5 days.

25 October 2023: A story is leaked to The Telegraph claiming the Premier League have recommended to the independent commission that the club be docked up to 12 points as punishment.

17 November 2023: the date of the Commission decision which upheld the PSR breach figure of £124.5m which was £19.5m over the £105m limit for the 3 years in question. The sanction imposed was an immediate deduction of 10 points from 14 to 4 putting Everton 2nd from bottom on goal difference and ordering Everton to pay the costs of the Premier League commission which is likely to be several million pounds.

1 December 2023:  Everton file their appeal.

The starting point and PSR dispute

There is an excellent podcast by Kieran Maguire on this subject and he makes the point that the starting position is that our losses for the 3 years in question were actually £287m as at 30 June 2022. An eye-watering sum.

Our accounts for 2021-22 were submitted in March 2023 and we also submitted our PSR calculation which reduced the loss figure from £287m to £88m. So we therefore said to the Premier League for PSR purposes we were £17m under the £105m limit. Everton included, as they did in March 2022, amongst the deductions, the interest we were paying on £176m of working capital loans. Everton had levied this interest, ie, transferred responsibility for it, in February 2022 to the Stadium Development Company. 

The Premier League decided to charge us later in March with being in breach of the PSR limit by £15m and subsequently that figure was increased to £19.5m. So the Premier League actually agreed allowances of £162.5m but not the figure of £199m we originally claimed. We the fans understood our club were not in breach and were fighting the complaint vigorously.

Our guilty plea

To make it very clear, and for reasons never made public by Everton, it was at the start of October 2023 that our lawyers announced to the Commission that Everton would no longer be contesting the complaint. Presumably based on legal advice, Everton abandoned its position that it was £17m under the limit of £105m and now admitted it was £7.9m over. We therefore accepted £24.9m of PSR deduction claims were not in fact allowable.

This was made up of the £10m claimed in respect of Player Y and post-planning-permission interest that had been incurred on the working capital loans and levied on the Stadium Company. There was still an issue of fact to be determined, however, in that whilst the figure of £199m for allowances was abandoned, it was replaced by Everton with a figure of £174.1m.

The Premier League maintained we were entitled to allowances of £162.5m. This meant it was for the Commission to determine the sum at the forthcoming hearing, once it had heard the arguments about transfer levy/pre-planning permission interest, and then to decide the appropriate penalty after representations from the Premier League and Everton legal teams.

The Lawyers

So who are our lawyers who gave Everton this advice? Pinsent Mason are solicitors acting for us, they were our commercial lawyers and were it seems instructed to deal with this matter. They engaged the services of two barristers, James Segan KC and Celia Rooney. Both are said to be experts in sports law. You can find their details on the website of Blackstone Chambers.

You will also note the Premier League barristers and indeed the barristers representing the clubs seeking compensation are from the same Chambers. This is not unusual, especially since Blackstone Chambers promote their members’ expertise in sports law.

Indeed the “Lionel Messi” of the Bar, David Pannick KC, who is retained by Manchester City to deal with their battle with the Premier League, is in the same Chambers. Maybe he might join us on loan to assist with our appeal as it would certainly benefit City!

Incidentally the Premier League use City of London Magic Circle firm Linklaters as their lawyers. Very, very expensive but they have a great reputation. Linklaters instructed Adam Lewis KC and Jason Pobjoy. The members of Blackstone Chambers representing the clubs seeking compensation from Everton are Nick de Marco KC and David Lowe.

The Commission

In basic terms, the Premier League has a pool of independent members to sit on any Commission that is set up in accordance with a very complicated set of rules. A Member of this pool selects each Commission that is needed. Each club in the Premier League sign up to the rules. The Commissioners are to act in accordance with the rules.

Any appeal is dealt with by a separate Judicial Panel with Members drawn from the same pool. Rule W.79 does not allow any appeal thereafter to a court or to an arbitration body – the decision is final.

The members of our Commission were David Phillips KC, Alan Greenwood, who is a Judge, and Nick Igoe, who is the finance expert on the panel. Igoe was Finance Director of West Ham at the time of the Carlos Tevez affair. 

The Hearing

This took place in private over 5 days in mid-October. We only have the decision report from which to try and work out what precisely went on as the hearing was behind closed doors.

There is mention of 28,000 documents, expert witnesses and oral evidence being given. No transcript has been made available. It is therefore hard to objectively comment on the evidence and arguments put forward by both sides.

In a nutshell, everything argued by Everton to say we were £7.9m over the limit and not £19.5m was rejected. Would it have made much difference? – Maybe 8 points instead of 10 points, so the answer is Yes. My view – and it is only based on what I have read, like everyone else – is that our case was not strong and, in any event, our credibility went with the guilty plea.

From then on, we were portrayed as a club totally out of control in terms of spending on player wages and transfers – but does a £19.5m overspend over 3 years truly represent such a position…? An average of £6.5m a year, equivalent to, for example, the annual loss on Jean-Phillippe Gbamin, signed in 2019 for 5 years for £25m plus salary! Did he really make any difference to our performance on the field?

Our mitigation was rejected out of hand, save for an acknowledgement that our trend was improving. In the last 5 years, I have read, our net spend on transfers is the least in the Premier League save for Brighton. Was this type of information put before the Commission? I know not. 

The increases in stadium costs and difficulties obtaining loans caused by the Ukraine war was said to be no more than the type of event businesses have to deal with on a daily basis. Really?

The Commission have undoubtedly, in my view, made an example of Everton, which is what the Premier League set out to achieve, looking at the way it presented its case, but was it really justified? Suffice to say that our arguments on the appropriate penalty were rejected out of hand.

Trying to read between the lines, the Commission were less than impressed as to how our club was run by the owner and the Board. I fear how they will rule on the compensation issue.

For the moment, however, it is time to concentrate on the appeal against our 10-point penalty. Can we get it reduced? We can surely point to the fact that we received a 10-point penalty which was not explained but this, surprise surprise, is as near as dammit to the penalty the August 2023 sanction policy put forward by the Premier League came up with.

When you stand back from all of this, is it any wonder that this process has met with the wrath of our fanbase?  Can we have any faith in the continued process and the appeal?

The forthcoming appeal

We can only hope and pray that the lawyers representing our club do very carefully review the almost unanimous condemnation of the 10-point decision and put forward the strongest possible arguments to the Appeal Panel against the rejection of their mitigation and arguments as to penalty.  I set out in my initial post some of my thoughts. I would add three additional matters. 

Firstly, the message sent out by the All Together Now group about the importance to our community of the new stadium cannot be understated. The stadium is breathtaking. It is magnificent. It is undoubtedly the Fourth Grace.

Our owner has put huge sums into it on an interest-free basis. He is to be applauded for that and perhaps not castigated quite as much as he has been in this decision. It seems to me, as I ponder this situation, that more than anything, the building of the stadium was the real reason why the PSR limit was breached.

Consider this scenario: namely our owner simply putting his money into the club interest free and as working capital. Then our owner agreeing with the lenders that the interest-bearing loans went into the stadium cost. It would appear we could then have rightly claimed to set off that interest and maybe have been under the limit or thereabouts.

It is not a defence but it must be pretty solid mitigation that, if one mistake had been rectified by our management team, we would not be in this position. I just wonder if this has been considered as, to me, it is strong mitigation.

Secondly the issue of Everton being less than frank, which Everton still deny. This is complicated. If I understand it, this actually revolves around the interest claim submitted in the March 2022 PSR submission and documents in support sent in August 2022. Did Everton mislead the Premier League?

The Commission found they did but my concern is Everton were never charged in respect of that March/August submission. Remarkably, the evidence was that, by December 2022 at the latest, the Premier League had decided they did not agree with the deductions in the March 2022 PSR submission. However, they told our Head of Legal Services they would hold it over until the March 2023 submission was received.

Everton made exactly the same deductions in the PSR submissions in March 2023, but crucially at this point in time the Premier League fully understood those deductions, particularly the one for interest, and in response immediately charged Everton and the matter was referred to the Commission by the Premier League.

I simply do not see on the facts as I read them how it can be said Everton were less than frank in regards to the 2023 PSR submission. If Everton were less than frank, it was only in respect of the interest deduction in the March 2022 submission. To my mind, Everton should not be punished in respect of the March 2022 submission when the Premier League took no action on that.

Clearly, I was not at the hearing and did not hear the arguments. Maybe I as a fan have misunderstood the sequence of events but there it is on my reading! 

I can fully understand why Everton feel the Commission have got a critical issue in this case wrong which, together with the refusal to accept anything Everton said about the appropriate sanction, led to such a severe sentence being imposed.

Finally, it seems to me that the Premier League actually treated us pretty fairly in August 2021 when allowing us to set off all the pre-planning-permission costs of £39.3m. They also were in no hurry to take any action against us in respect of our March 2022 PSR submission, to say the least.

What changed in March 23…? Was it the fear of independent regulation which had now reared its ugly head so far as the Premier League were concerned? It seems very clear to me that was the answer and Everton became the sacrificial lamb.

The Fans

You would like to think that someone at our club is monitoring each and every point our fans are making in response to the decision and feeding back to the lawyers. After all, Point 1 of the Owners Charter says “We understand the vital role of our fans and we commit to listening to their views and protecting our club’s heritage”.

There has never been a more important time for our club to listen to our fans and also indeed the Premier League and especially its Appeal Panel. Perhaps Sky ought to do the same. The lack of coverage of the protests at Goodison Park last Sunday was a disgrace. 

Summary

The disproportionate nature of this penalty must be varied on appeal. Whatever Everton have done wrong, and we have to accept Everton admitted wrongdoing by its guilty plea, the penalty imposed of a 10-point deduction is a decision no fair and reasonable tribunal, properly directed, could have arrived at.

This was a first offence. Everton has demonstrated a commitment to financial responsibility over the years. It is now clearly determined to do so going forward even whilst £760m is being invested into a new stadium. Certainly a more balanced and independent approach would contribute to the overall credibility and fairness of the process.

The starting point has to be the 9-point sanction for going into administration and our deduction should be far less than that – if indeed there should actually be a deduction of points rather than a fine and another sporting penalty such as a transfer ban.

The sooner this appeal is dealt with the better for us all.

Reader Comments (57)

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Kim Vivian
1 Posted 04/12/2023 at 15:19:08
I was pleased to read this comment from Garth Crooks in the Dwight McNeil summary in his team of the week this morning on the Beeb page.

"Everton seem to have taken their punishment on the chin and got on with matters. No-one is doubting that if a club breaks the rules, then they also deserve sanctions. However, to ensure the integrity of the game remains intact, football fans need to be absolutely sure that if other clubs are found guilty of similar practices, they must be punished in proportion to their offences."

Nice to see these points being made in the media.

Barry Hesketh
2 Posted 04/12/2023 at 15:29:21
Kim @1
Very carefully worded by Garth Crooks, he's not saying that the punishment is harsh, which it is, or unwarranted, which it is. Rather, he's saying other clubs who transgress the rules should be punished in a similar way to Everton. I'd argue that to retain the integrity of the league, the deduction should be removed and a financial penalty issued in its place, perhaps with a suspended points deduction if we transgress within a certain period of time.
Anthony Hawkins
3 Posted 04/12/2023 at 15:31:07
Part of the challenge is the timing of the out-going members of our board. They knew commission was coming but all left before the hearing (BK excused on this occasion). Why would you let the board go knowing they were the ones in the know? Or is that the absolute point? If they're not in situ and cannot be forced to give account, that relieves some pressure?
Kim Vivian
4 Posted 04/12/2023 at 15:37:19
Yes Barry that would be one route to follow.

The point I was making really is that it's nice to see more comments in the media here and there asserting that it should be one (rule) for all not just one for EFC - the unspoken inference of course being that we have been hit bloody hard.

And you're right - it is a carefully structured comment.

He has Pickford as his GK choice and makes somewhat supportive references in those comments as well. He clearly thinks we are hard done to as I read it.

John Keating
5 Posted 04/12/2023 at 15:43:21
Great article Peter
Well done and thank you.

The biggest thing I take out of your piece is something that has been mentioned time after time - the "independent" commission.

All the legal eagles come from the same chamber how on God's given earth can that in any way shape or form constitute "independent"

Surely like all professions, the legal world is just a boy's only Club, with the odd few females thrown in to make it more acceptable to these day's of wokery.

I cannot believe that a group of guys working together who know each other intimately, no doubt enjoying each others company at work and socially, and could at various times be working together on various committees be impartial.

I believe regardless of all the excellent point you and others far more knowledgeable than most of us in these matters mention, the only path for us as a Club is self help.
Dyche and the players have to get points on the board, get us in to mid table and hope further punishment does not put us back down

Les Callan
6 Posted 04/12/2023 at 15:49:33
Peter, have you sent this to our lawyers or the PL ?
Jay Harris
7 Posted 04/12/2023 at 15:56:17
Great post Peter and as you say one would hope that our lawyers are picking up snippets from the media, government representatives and fan's posts.
Mark Taylor
8 Posted 04/12/2023 at 16:43:03
This is a very useful summary of the state of play. A couple of points I'd add:

1) Is it the case that the CEO and CFO actually refused to testify? Or were they not asked to? If the former, I'm truly astonished that a requirement to do so was not included in the agreement for their allegedly very large severance pay.

2) Given there is no published tariff at all, I think we would be right to question whether a points penalty fits not just the crime, but also the intent of P&S, which by its name, suggests it is to avoid clubs getting into financial problems and going bust. That would imply mandatory cost control is the remedy.

3) If we are to receive a points sanction on the basis of enhanced performance, that would surely have consider what our typical cost per point actually is. For 21-22 we had £225M of costs for 39 points, so a cost of £5M or so per point. If we are less than £20M over the £105M limit, that would equate to roughly 4 points – 1 point per season – which could be argued was our sporting advantage.

Point 3 might be a convoluted way of looking at calculating the points deduction that is appropriate. In fact, even I can see the holes in it. But did the commission have a better way? Is there in fact a better way than merely plucking a figure from thin air?

If we can't get success on 2), a 4- or even 5-point penalty under a version of 3) would be handy. If we can get a detailed agreed calculation, it would also undermine the compensation claims of the other clubs.

Dale Self
9 Posted 04/12/2023 at 17:24:32
Peter, this is an absolutely massive contribution to our collective understanding. To use an American phrase, my head is full. The organisation and coverage is a thorough and satisfying read so thank you very much for this work.

I still think we are somehow a test case for the work they have yet to undertake with City and Chelsea. If we can game that out wisely without aggressively embarrassing anyone while legitimately questioning process, we win. I would avoid any request to redress the ruling on the Ukraine war. That is our price of risk for getting in bed with an oligarch, let them have that.

I will return to your work here continually until the noise in my head over this begins to fade. Thank you once again for this, I thought I would just have to carry a load of anxiety until another ruling. Now I can, as you say, dispassionately work through enough to get some peace of mind. We are not a bad club damnit!

David McMullen
10 Posted 04/12/2023 at 17:50:53
There seems to be an awful lot wrong with this case. I'm no lawyer I know you don't have to be to see the flaws.

The mitigation being dismissed casually out of hand.

The briefing both publically by the Premier League and in the statement by Masters for a 12-point deduction.

The fact that they had no specific punishment for this – it was kind of put in place in August but on the rules outside the Premier League where Andy Burnham has established that the Premier League (the clubs themselves) did not vote for.

Citing Sheffield Wednesday when again different league and different set of circumstances.

The changes from the Premier League whilst dealing with Everton as Peter mentions, which I didn't know.

The indisputable disproportionate penalty for which administration, seemingly the worst-case scenario, would be just 9 points.

The independent Commission ruling that a financial penalty would not be appropriate as we have a "wealthy owner"! – which is laughable anyway because he is selling up but at odds with the penalty laid down to the Super League 6 teams, who are all with wealthy owners, more so than Everton.

The fact that we apparently had no sporting advantage – we did not deliberately plan to go over the spending – and yet we are given a sporting punishment, not a financial one. Ludicrous.

I'm sure Everton's legal team will be able to pick holes in this.

That's just from what I can see. I'm sure there is more but I would take Andy Burnham's point of view that this is an 'abuse of process'. The actions of the Premier League in how they have handled this and clearly steered the commission into basically only being able to make one decision. Their decision based on false statements from Masters.

Mike Gaynes
11 Posted 04/12/2023 at 17:52:29
Peter, top contribution. Thank you for your hard work and scholarship on this.
Dave Cashen
12 Posted 04/12/2023 at 18:08:14
Fantastic post, Peter.

Reading stuff from yourself, Lyndon and Andy Burnham I cant help wondering what our official representatives are being paid for.

John Keating
13 Posted 04/12/2023 at 18:23:12
My big bug is that regardless of what fantastic points guys like Peter and Andy come up with at the end of the day we are dealing with exactly the same shysters.

The "independent" commission who have given us the 10-point deduction and say other clubs have called for a financial fine are the same shysters who will look at the potential financial fine!

The same mob will be put in place for our appeal.

The whole thing stinks. Stinks of ego and corruption.

The only acceptable outcome would be a financial decision and not a points deduction.

Once this sham is over, we must do everything we can to get the corrupt mob at the Premier League out.

Len Hawkins
14 Posted 04/12/2023 at 18:52:19
Do the Premier League really believe that they are squeaky clean?

For 30 years, they have presided over a competition which pays a bonus for league position. Only a handful of clubs have won the Premier Leage Title, with three interlopers who crashed the party, so the most money has gone to that handful of clubs,

They took very little action over the handful of clubs that have won the Premier League plus Spurs when they decided to really clean up and swell their bank accounts even more in the greed-filled European Super League. The Premier League and their paymasters are happy to see a league which only concerns 6 clubs and sod the also-rans to pick up the crumbs.

It is a complete and utter joke that they want to continue the status quo and punish any club that spends money trying to break in to the Premier League's elite. (I thought 'elite' was an illumination device in Wigan!)

It is anti-football, until money took over, half the old 1st Division started the season with hopes of winning the league but now three-quarters of the Premier League are hoping not to get relegated.

Graham Fylde
15 Posted 04/12/2023 at 18:53:51
Great job, Peter.

Re your summary regarding the Premier League initially treating us fairly and then changing its mind, that is documented at para 76 and goes to the heart of the case. Everton had claimed back interest on stadium loans where the loans had actually come from Moshiri and there was no interest on them in the first place.

We then changed our submission to say if EFC had taken out a loan specifically for the stadium, Moshiri would have paid the commercial loans back and therefore, we were entitled to a return of interest for the equivalent payments on the stadium.

This argument was somewhat undermined by Everton submitting the loan agreements to the tribunal with clauses that said, specifically, they could only be used for operational matters (not the stadium project). The Premier League felt Everton had been misleading in its submission to them previously.

I do not expect any of this detail to change at appeal. It is surely now only about the 10 points which is obviously not proportionate – the need for which the commission acknowledges at para 91. The commission did not detail any reasoning it used to get to 10 points and, as you point out, 9 points is used in the case of insolvency.

Together with the policy document issue that Burnham highlights with the commission coming to the same answer as the Premier League, the points decision will, I'm sure, be overturned but replaced with what, I don't know.

Brent Stephens
16 Posted 04/12/2023 at 19:03:37
Peter, great contribution.

What sticks in my craw is that Everton (naively?) allocated the Metro Bank and R&MF loans (ostensibly taken out for the stadium build, capital expenditure!) to current expenditure not capital expenditure (ie, not to the stadium build); that gave us no sporting advantage but we are penalised through the interest from those loans being included in calculations of our general current expenditure.

There would have been no sporting advantage if, as you would have expected, we had allocated the loan interest to the stadium build, and used Moshiri's loan for current expenditure. Instead we pointlessly(?) allocated Moshiri's interest-free loan to stadium development.

All this seems to have been merely an accounting quirk on Everton's part, with no sporting advantage in what we did, but all pain through the Commission's points penalty - for a so-called sporting advantage.

Do I understand that correctly?

Graham Fylde
17 Posted 04/12/2023 at 19:12:37
Brent (16)

Yes, you are substantially correct.

The reason Moshiri's loans went to stadium pay down was the commercial bank loans had clauses specifying they were to be used for operational purposes only. The Premier League lawyers used our own submissions to point this out.

To be honest, naive might be pushing it and to try to obscure things as to what we were trying to do is a lot closer to stupid!

Brian Harrison
18 Posted 04/12/2023 at 19:27:19
Peter

Reading your very detailed post, what comes across is that we should have employed David Pannick who you describe as the Lionel Messi of the bar who is also representing Man City in their case with the Premier League.

I noted that you were concerned as to Everton pleading guilty to the breach which they initially disputed. Unless I have misunderstood, you reckon that made it easier for the commission?

Your posts along with Andy Burnham's 2nd letter to the commission certainly highlight some flaws in the commission's findings.

What I find unfair both to Everton and the clubs involved in the relegation battle is the reports are that this commission when it does finally meet to consider the appeal may not make a decision until quite late in the season.

So, if they don't publish their decision till say April and Everton get a reduction of the original deduction, that could put another club in trouble with just a handful of games left.

John Connor
19 Posted 04/12/2023 at 19:51:18
Decent analysis of what is in the public domain.

The concern is what actually went on at the hearing, which has not yet been made public. Only the result of the inquiry.

What arguments were put forward by Everton (besides the accountants being stupid)?

Also in the narrative we are told "The members of Blackstone Chambers representing the clubs seeking compensation from Everton" — is this actually a thing? Are Leeds, Leicester and Burnley seeking legal advice to pursue a claim for compensation? If so, we need to be told the basis of the claim (Blackstone Chambers must know) and the amount of compensation they are seeking.

The last point I would make is there has been no mention of Usmanov in all of this, and I am surmising the majority of Moshiri's money came from him. Was he involved in any of the underhand accountancy practices? Did he encourage them?

Barry Hesketh
20 Posted 04/12/2023 at 20:07:09
John @19,

I doubt much of the hearing or that of the appeal will be put into the public domain, although it might be interesting for some people to see how things were presented.

We'll get the headlines and the Commission's reports, but I can't see much of the nuts and bolts of the whole shebang, ever seeing the light of day.

Brian Williams
21 Posted 04/12/2023 at 20:19:21
It puts things into context when you see that Man City have a team of 30 lawyers working on their "case" and recently Everton didn't have a single lawyer on the books! 😱
Howard Don
22 Posted 04/12/2023 at 20:20:49
Thank you for a very informative and interesting article, Peter.

If ever there was a time for everyone to add their bit, no matter how small, to the general weight of feeling being generated, it has to be now before the appeal commission sits.

I'm sure many on here and elsewhere will have taken this step, but I recently had an email exchange with my MP in West Lancs, Ashley Dalton. I was left in no doubt as to Ashley's sympathy for our cause (happy to put up emails if anyone interested) and she sent me a copy of an email she sent to The Department for Culture, Media and Sport.

I'm pretty sure there will have been lots of similar letters gone in, but surely the more the better so if you haven't written why not give it a shot. Thanks to Ashley for her support:-
https://pbs.twimg.com/media/F_uGxbKX0AAR3l8?format=jpg&name=large

Danny O’Neill
23 Posted 04/12/2023 at 23:14:19
A great and very detailed article, Peter.

I am no legal expert, but we should push this through.

It is over the top and seems not very well thought out. Almost a decision made on a whim. Finger in the air type of stuff.

Great letter from Ashley to back up Andy Burnham.

Keep fighting, Everton. On and off the pitch.

If they (the Premier League) don't back down, they are making a rod for their own back and have to proportionally do the same to others.

Neil Farrell
24 Posted 04/12/2023 at 23:37:58
This may seem out-of-the-box thinking but I wouldn't put it past the the Premier League.

Perhaps we are being used as an example knowing we would appeal, dropping it way down to (guessing 3 points) therefore setting a precedent to give Man City and Chelsea a hit that won't relegate the Premier League darlings and again have an uneven playing field. With Man City as an example, doc 25 points (in lieu of our 3) they could still qualify for Europe.

Fucking bastards.

Stu Barnes
25 Posted 04/12/2023 at 23:46:39
A really helpful chronology and legal analysis, Peter, thanks.

Just to embolden concerns raised in your assessment:

1) The independence of the panel – we had no chance of a fair hearing when the whole aim of this is to demonstrate the might of the Premier League in being able to sort its house out via conflicted individuals, planted to deliver a pre-ordained outcome.

2) The legitimacy of the process – set up by the Premier League to preserve its commercial interests and disregard any considerations of sporting integrity.

3) Shifting sands – the rules set up after the investigation had commenced, if one would be paranoid, this might seem like it was being manipulated.

4) The ludicrously disproportionate penalty, beyond the much graver transgression of administration, or the setting up of a breakaway league.

5) The lack of consistency in the pace of our investigation compared to that of others.

6) The fact that these rules are probably being broken monthly and by many clubs, but it's so murky it's impossible to see this ever being controlled.

Tell any Blackburn fan of a certain age that Jack Walker was a sporting fraud who destabilised the league, distorted the transfer system and bought the title. There may be an element of truth in that but I would strongly expect each and every Rovers fan would tell you to fuck right off. And I'd be right behind them.

Paul Kossoff
26 Posted 05/12/2023 at 00:34:28
If we had taken the £30M loan off the council to put towards the stadium, would we have been okay?
Mark Taylor
27 Posted 05/12/2023 at 00:50:25
Paul @26,

As I understand it, no, it's the interest on the other loans that is disallowable. I believe what we were trying to do was put the entire interest arising from the £250M or so loans as an interest charge against the stadium and so deductible.

Unfortunately the loan agreements we signed did not support that use, it was for general working capital. Interest (or the reduction in it for the other loans) on a £30M loan wouldn't come close to the £19.5M we are over.

Ed Prytherch
28 Posted 05/12/2023 at 03:30:13
The money spent hiring and firing managers is many tens of millions and this must have appeared in the accounts as losses. Likewise the high salaries and transfer fees for players who rarely played.

This is the mismanagement that got us into the deep hole. Wages and salaries accounted for about 96% of the club income. Paul Quinn argued repeatedly that it was not sustainable, particularly with the high loan interest. The shit was going to hit the fan sooner or later.

Our appeal can only be about the size of the penalty.
It is not a good idea to attack the credibility of the commission, Donald Trump is in the process of proving that.

David McMullen
29 Posted 05/12/2023 at 06:18:59
Perhaps Ed the new phrase with Everton is the shit hitting the fans.

The owner and boardroom should be held to account for their mismanagement down the years. The docked points should be removed and replaced by a financial penalty – one that Mr Moshiri is told to pick up the tab. The other board members and Mr Everton get off scott free.

Matt Traynor
30 Posted 05/12/2023 at 07:00:14
Len #14,

I'm not commenting on how clean or otherwise the Premier League is but in terms of the distribution of finance, it is the best model in Europe. The difference in payment between the team at the bottom and the team at the top is 1.6 (ie, position 1 gets 1.6 times that of position 20).

Reality is there's ways around this. TV appearances etc. But this is being eroded as more and more games are shown on TV. Next TV deal has 270 of the 380 games shown live in UK. (In overseas territories, all 380 games are shown live as part of the rights package.)

The problem for years has been related to the overseas TV deal, which is split equally between the 20 clubs. Certain clubs (no prizes for guessing) have been regularly trying to force a change to give them more as they are more of a global brand. There's an argument of sorts there, but there's limited ways to measure it – and to date they haven't been able to get the 14 votes to carry it.

The Premier League wasn't angry about the Super League Six — they were shit scared about what it potentially meant. That's why they are clear to distance our punishment with any for Chelsea and Man City.

All of this is because we've been poor in relative terms for most of the Premier League's life, and when we did get moderately rich, we pissed it up the wall. Man City, remember, were in tier 3 not so long ago.

Sadly, I fear the Premier League will find a mechanism to give the big teams more revenue and leeway, and the other clubs will get bought off in some way, which in hindsight will prove the death of competition.

I do wish the "Super 6" had pissed off to the European "Super" League, but I only wish they'd taken the Premier League with them. Sadly, Uefa had more money to lose than even the Premier League.

Kim Vivian
31 Posted 05/12/2023 at 07:47:01
Ed - 28. Yes, indeed.

I made a very similar point a few days ago and asked the question does anyone know actually how much has been spent since Moshiri arrived in compensation to sacked managers and their respective teams, incentives to lure them and so on? I'd be very surprised if it was not more than the amount by which we have transgressed.

As you say – management ineptitude exemplified.

John Keating
32 Posted 05/12/2023 at 07:58:07
Ed,

I believe it is justifiable to question the credibility of the commission.

The Premier League and others are continually pushing the independence of the commission, however, how can it be when both sides and all involved are from the same source?

KCs and lawyers all from the same Chambers. All working with each other on a daily basis. Why would these well paid legal flunkeys bite the hand that feeds them?

How can a result be fair if nobody has seen how that result was determined?

How can another independent commission be charged to look in to potential third-party financial claims when it is the exact commission that said there was a case to be brought in the first hearing?

No sorry, Ed, in my opinion, there is no “independence” in this kangaroo court and once this sham is over, Masters and the Premier League should be cleaned and cleared out.

Problem is, our sentence will stand and Man City, Chelsea et al will benefit from a cleaner regime.

Pete Neilson
33 Posted 05/12/2023 at 08:58:32
Kim (@31) in January 2022, The Echo calculated close to £50M, that doesn't include £4M to Watford for Silva or Lampard's payoff, so add another £10M at least.

Farhad Moshiri knows £50m Roberto Martinez truth with Everton mistakes clear

It'd certainly be a multiple of our £19.5M transgression. The staggering cost of a staggering level of mismanagement.

Kim Vivian
34 Posted 05/12/2023 at 09:47:30
Thanks Pete. Useful link that. And, as one of the comments say below the article, as yourself, we not only paid compensation to Watford but also to Southampton for Koeman.

I wonder also if it includes whatever we would have paid to the various flotsam and jetsam that each manager brings with him as part of his team. I guess they have contracts as well.

It's all honestly near to tear-inducing. Thank God (and Moshiri, I suppose we must concede), for the stadium, even if it is a further financial millstone at this time.

Mike Doyle
35 Posted 05/12/2023 at 09:53:59
Brian #18,

Paul the Esk & Co discussed this point in last weekend's 'Talking the Blues' podcast.

In the interests of fairness to all clubs, ideally the appeal should be heard and decision announced before the start or close of the January transfer window as the position of Everton many impact spending decisions of other clubs in the window.

However ,given the speed of these things, that looks unlikely. Paul speculated that it could be February or March before the outcome is known (which sounds a long time, but February is only 8 weeks away).

Brian Harrison
36 Posted 05/12/2023 at 10:19:00
Mike @35,

Should Paul be right and the decision on the appeal is not published till March, it could have a major impact on clubs in and around the relegation zone.

Hopefully, even with the 10-point deduction, let's hope we aren't in a relegation position. I think we should carry on as if there will be no reduction in the 10-point deduction, and plan accordingly.

As far as the January transfer window, I doubt it will affect us as we have no money to spend, and I know Paul has suggested that we are sailing close to the wind on breaking the P&S rules when this year's figures are published just before Christmas.

Also a report said that the appeal panel could take that into account if we have again transgressed P&S rules.

Peter Mills
37 Posted 05/12/2023 at 10:23:44
This post adds greatly to the insight I have gained into the situation from people like Michael Kenrick, Lyndon Lloyd, Barry Hesketh and many others, as well as Andy Burnham's excellent letters.

I hope this intelligent research, writing and challenging can contribute to a more just outcome. Thanks to everyone concerned.

Mal van Schaick
38 Posted 05/12/2023 at 11:01:28
Throughout this process, I am being educated by those who scribe intelligent words on this matter. Thank you all.

We are fighting for our very existence as historic members of the Football Leagues and Association, with a fanbase as good as any other team, if not better.

However, it looks like that counts for nothing as avarice presides over the current Premier League and its co-conspirators, who seek to rule in a totalitarian style, dictatorial and subservient.

Never stop fighting this regime, until such time that we have our name and pride restored, over what appears to be a minor transgression and misdemeanour.

Barry Rathbone
39 Posted 05/12/2023 at 12:48:12
Can anyone play devil's advocate and put a case for the 10-point deduction? In the interests of balance.

Possible danger of unreasonable hopes here because of preaching to the converted.

Robert Tressell
40 Posted 05/12/2023 at 13:09:26
Barry, industry regulators (independent or not) do not find it hard to come up with credible positions for what can look unfair / inconsistent action.

They will have worked through this extensively already and probably taken legal advice too.

John Chambers
41 Posted 05/12/2023 at 13:15:05
Barry, before I start, I just want to state I don't support the 10-point deduction. With no clear guidelines re the calculation of the penalty, or explanation of how they arrived at 10, it is impossible to properly argue for or against a number.

However, the simple argument supporting it is we, eventually, admitted we broke the rules. You can question if it was £8M or £19.5M but my understanding is the rules say you could be deducted 12 points for breaking £105M losses, so why not 10?

Dave Waugh
42 Posted 05/12/2023 at 13:24:42
Great article.

I note that the Premier League's own statement of principles states they will be "Fair: Being objective, responsible and trustworthy. Safeguarding the integrity of the game. Thinking of tomorrow when making decisions for today."

I'd say that in this situation they are anything but!

Pete Neilson
43 Posted 05/12/2023 at 13:27:06
Sheffield Wednesday's appeal reduced their points deduction from 12 to 6 simply because the appeal panel found the original punishment was “excessively severe”. The appeal panel felt it was also significant that Wednesday had tried to meet financial regulations.

So, much as with us and, if they are a precedent, one for hope. It's not a case of reopening all our previous mitigation arguments, it's simply excessively severe.

We do have one new significant argument. That of the Premier League Sanction Policy and its retrospective application along with all the questions of who, how, when was this devised and published, and is it watertight?

This is one the Premier League probably doesn't want to open as it appears to be made up on the back of a fag packet. Maybe this will be the bargaining chip.

Michael Kenrick
44 Posted 05/12/2023 at 14:16:24
Barry @39,

The simple answer is surely out there already: breaching the £105M threshold = 6 points… plus 1 point for every £5M (or part thereof) you are over the threshold.

That's the Premier League's formula and that's what the independent commission did.

But they wanted to appear "independent" –and may have already foreseen the problem with the Premier League developing sentencing guidelines deep into the process – so they expressly said they weren't following that formula.

But they strangely… maybe deliberately… provided no other rationale. Leaving a gaping hole for the appeal lawyers to jump into, as the commission perhaps recognized that the Premier League had unduly influenced and compromised their so-called independence.

Or is that otherwise known as "Wishful Thinking" on my part?

Tony Abrahams
45 Posted 05/12/2023 at 14:25:36
They didn't want to punish the fans of the clubs who wanted to break away from the Premier League, but they want to punish the fans of Everton, who have been protesting against the board and the way the club has been allowed to run for a good few years now.

Only in football do two wrongs appear to make a right, and this is something that we are witnessing most weeks now.

I'd like to think it's ineptitude, but sometimes I get the feeling that some things have already been pre-conceived, but maybe I'm just a paranoid schizophrenic when it comes to understanding modern-day football and the idle technology, which is seemingly tampering with the game beyond a lot of my previous recognitions.

Michael Kenrick
46 Posted 05/12/2023 at 16:31:50
John @41,

"My understanding is the rules say you could be deducted 12 points for breaking £105M losses."

That's not something I recall seeing specifically stated in the rules, John, but you could say it's one of the myriad outcomes that could be levied upon us as the rules do say that they can punish us in whatever way they see fit.

Ernie Baywood
47 Posted 05/12/2023 at 18:53:46
Excellent post, Peter.

I'm not sure I agree with some of your points regarding the hearing itself. For example, I didn't think that we argued the invasion of Ukraine cost us loans. We argued that our future naming rights deal with USM was being renegotiated to take effect before the stadium was built. That sounds like a very, erm, creative mitigation. It doesn't pass the pub test.

And on stadium interest, the way it was tested wasn't really an error. We admitted that even if we had thought to capitalise it, we wouldn't have done so.

The 10 points is the focus for our appeal. We're guilty, we have limited mitigation... but 10 points is a very severe punishment. That's about all we can muster.

I'm still undecided on whether the punishment really needs to be less than the administration punishment. A deduction for administration isn't any statement on sporting advantage. It's to deter clubs from entering that particular situation whereby they fob off their creditors with pennies on the pound.

Barry Rathbone
48 Posted 05/12/2023 at 18:59:20
Thanks, John @41 and Michael @44.

My reaction is the commission attempt at independence boils down to swerving the 12-point deduction.

Seems likely the Premier League formula was used and their counter will be: "We like Everton, they're a doozey, so we knocked a couple of points off the penalty. No idea what they're moaning about, m'lud?"

Lyndon Lloyd
49 Posted 05/12/2023 at 19:49:17
To add to the discussion, this thread in response to Peter's article was posted to Twitter/X today by @EFCTRUTH:

I think the article’s author has got confused about the treatment of interest. Which is not surprising as it’s tackled in various parts of the report and isn’t always clear.

In his timeline he states that in March 22 Everton submit PSR (presumably for 20/21) incl £17.4m interest.

This is not stated in the report. Indeed in Paragraph 32 it’s clear that Everton changed the way it reported interest in March 22 and it impacted the 2022 accounts.

In fact £17.4m is first mentioned in Paragraph 33. In August 22 Everton submitted a FY22 PSR submission. This is obviously a draft submission for 21/22.

The timeline is complicated by a referral in paragraph 72 to the PL agreeing that interest can be deducted. They subsequently changed their view when they fully understood Everton’s treatment.

It’s unclear what they were agreeing in April 22 (or the quantum).

The whole question of interest is confusing but it seems clear that it is Everton that changed treatment (and calculations) through the time period.

The reason Everton were “less than frank” was in claiming the loans related to the stadium when that is clearly not the case.

One last point:

We sacked Benitez in Jan 22 at a cost of £10.5m.

It’s bizarrely not mentioned in the report but it’s clear that we paid that knowing we might breach and that decision almost certainly kept us up.

Sorry, another point:

There is a big question about whether our initial 2022 PSR submission was made in good faith.

Barry Hesketh
50 Posted 05/12/2023 at 20:26:42
That Twitter account looks as if it has viewed Everton and the points deduction, with 'red tinted glasses'. If we're not careful we'll be asking for the Commission to significantly increase the punishment because we pleaded guilty to one offence.

The Commission for the appeal should have already have been chosen, and the date set in stone, but oh no, the Premier League will drag this out as long as it can, because 'X' accounts similar to EFCTRUTH and other media outlets, will keep chipping away until we and the club celebrate only suffering the initial 10 points.

We've had “the Everton case is not at all similar to what Man City have done and therefore we've kicked it into the long-grass”. We've had “the Everton punishment is possibly unfair but, so long as other clubs suffer the same fate, it's okay” routine.

Let's be straight here, we shouldn't accept any points deduction for the club's wrongdoing, only one person should carry the can for this and that's the owner, he should be made accountable and some of the money that he manages to get from the sale of Everton should be used to pay a whopping fine and the points be immediately put back on Everton's tally. They can also make a statement that disbars Moshiri from having any influence on any football club in England for life. That would be fair… that would be proportionate.


Jay Hughes
51 Posted 05/12/2023 at 21:35:39
The premier league decide for themselves which rules to enforce and which to ignore.

The attempted formation of a European Super League has been well discussed but what about behaviour of Manchester United fans forcing the game v Liverpool to be postponed? No action.

There is a clear rule, supposedly enforced by law, that clubs are not allowed standing areas and yet Liverpool and Man Utd fans continually deliberately stand throughout their matches (in the Kop and Stretford End) and yet the Premer League don't sanction the clubs for this. I know the rules are being loosened in this regard but those clubs have stuck the middle finger up at the Premier League for years.

I think we know where the power lies so don't get your hopes up about this appeal.

Premier League – corrupt as Fuck.

Svein-Roger Jensen
52 Posted 05/12/2023 at 22:17:07
An inquiry into the unacceptable conduct by Erling Haaland in the 3-3 draw with Tottenham Hotspur has been held. Following remonstrations with referee Simon Hooper, the Manchester City player subsequently tweeted 'Wtf' in response to a video of the passage of play. The FA take such actions extremely seriously and have therefore decided to dock Everton 5 points.
Ernie Baywood
53 Posted 06/12/2023 at 00:33:34
Barry, personally I think that account has it right. If the Commission's timeline and version of events is to be believed (and unfortunately we have nothing else to go on) then it looks like we were "less than frank".

I'm assuming "less than frank" means we lose brownie points with the Commission. Whereas Man City are being accused of actually cooking the books which is a Premier League charge.

Barry Hesketh
54 Posted 06/12/2023 at 00:56:20
Ernie @53,

Everton have pleaded guilty, they expected a punishment to be meted out. I doubt even the most pessimistic among the movers and shakers at the club expected the club to be docked any, never mind so many points.

I and most of the Evertonians that I know, agree that we are bang to rights, but all of them agree that the points deduction is a step too far, for what after all, was a financial breach.

People can argue until they're blue or even red in the face about the merits of what Everton presented in the accounts and how they presented it; however, I will continue to contend that a financial penalty should have been the only punishment, perhaps added to with a suspended points deduction, to act as a deterrent for further possible breaches.

Moshiri should be made to pay for his awful leadership of the club, during his seven years at Goodison, but he won't, he'll walk away with some money, perhaps not as much as he might have liked, when he eventually sells the club.

In a few years time, even if it takes that long, he'll forget he was even involved with the destruction of the club's hard won reputation and who knows, perhaps, the actual destruction of it, a club that has been around for nearly 150 years.

A sporting penalty does not fit the bill, it never did, and it never will, regardless of whether the owner and his cohorts were less than frank about what they presented and how.

Ernie Baywood
55 Posted 06/12/2023 at 11:20:30
I can understand suspended points.

I can't understand the idea that it should only be a financial punishment. It makes no sense to me. The rules have been put in place to either stop clubs being reckless with their future, or to stop rich owners from spending whatever they want on their play thing. If it's a financial penalty that doesn't dissuade the latter.

Can you imagine if Man City were offered a financial penalty for spending their owner's money? They'd go out and spend billions and then happily cough up a fine.

It may well be true that the club didn't expect a points deduction, but that just further indicates their recklessness. The owner and anyone else who was complicit.

Ray Jacques
56 Posted 08/12/2023 at 17:05:43
We all know what a shambles the running of EFC has been over the past 6 years, all down to the board and the owner.
Our guilt is acknowledged so the appeal can only be about the punishment given.

I would drag Little Miss Dynamite out in a headlock from wherever she is hiding and ask for a public explanation of how she oversaw such a mess.

Fine the owner and the board, don't punish the fans who have done nothing wrong. If I commit a crime I shall be punished, not my family.

Will be happy if we get 4 points back, doubt we will do better than that. It has to be less than 9 points for administration, that's common sense, but then again.

Jerome Shields
57 Posted 18/12/2023 at 22:34:44
Sacrificial lambs is right.Everton will be the only one.

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