Everton became the first Premier League club to have points deducted for breaching profitability and sustainability rules (PSR) on Friday, 17 November 2023. The league imposed a 10-point deduction on the Merseyside club for their finances in the 2020-2021 season.
The independent commission immediately imposed cuts that would see Everton drop from 14th in the standings to the relegation zone on four points, above bottom team Burnley on goal difference. Everton said the decision was unfair and would appeal.
The Premier League said it had issued a complaint against Everton and referred the case to an independent commission earlier this year.
“During the hearing, the club admitted it violated the PSR for the period ending the 2021-2022 season but the extent of the violation remains in dispute,” the league said in a statement.
“The Commission determined Everton’s PSR calculations for the relevant period resulted in a loss of £124.5 million, as stated by the Premier League, which exceeds the threshold of £105 million permitted under the PSR.”
Everton’s latest figures show losses for five consecutive years, with their total losses during that period amounting to more than 430 million pounds. The club said they had recorded a loss of 44.7 million pounds for the 2021-2022 season.
After three consecutive years of losses of more than 100 million pounds, Everton said they had made significant cuts, down 76 million pounds from the previous year’s loss of 121 million pounds.
Although Everton’s deduction of 10 points for breaching financial rules is unprecedented, clubs in the top flight of the Premier League have also received points deductions.
Middlesbrough, for example, had three points deducted in 1997 when they failed to fulfill a match against Blackburn Rovers, while Portsmouth were given a nine-point penalty in 2010 for financial problems.
Everton narrowly avoided relegation last season, finishing 17th with 36 points. Leicester City (34 points), Leeds United (31 points) and Southampton (25 points) dropped to the second division or EFL Championship.
Everton said the sanctions were completely disproportionate and unfair. The club announced its intention to appeal the decision to the Premier League.
“Everton insists it is open and transparent in providing information to the Premier League and always respects the integrity of the process,” he said.
“The club does not acknowledge the finding they failed to act in good faith and does not understand these are allegations made by the Premier League throughout the process. The harshness and severity of the sanctions imposed by the Commission do not reflect fair and reasonable evidence.”
Everton was sold to 777 Partners last September in a deal reportedly worth more than 550 million pounds, with the company acquiring British-Iranian billionaire Farhad Moshiri’s 94.1 percent stake in the club. The deal is expected to be completed by the end of this year.
The US private equity firm declined to comment on the points reduction while the process of changing control is still underway.
Earlier this year, Manchester City was also referred to an independent commission over more than 100 alleged breaches of financial rules since the club was acquired by City Football Group based in Abu Dhabi, United Arab Emirates. No decision has been reached in the City case.
“The club will also monitor with interest the decisions made in other cases relating to the Premier League Profitability and Sustainability Regulations,” Everton added.
Chair of the Culture, Media and Sport Committee, Caroline Dinenage, said the sanctions imposed on Everton were another sign that the sport needed independent regulation.
“It is clear the status quo cannot continue,” Dinenage said in a statement. “So I repeat my call on the government to immediately introduce the Football Governance Bill, as announced in the King’s Speech, to enable independent legal regulation to be implemented as soon as possible.”