Merseyside outfit, Everton has just been dealt a significant blow with an instant 10-point deduction following a breach of financial fair play rules in the Premier League. This penalty has caused Everton to drop from the 14th position to the 19th spot in the league table. They are now five points away from the safety zone, narrowly avoiding the bottom spot due to their better goal difference compared to Burnley.
Before the deduction, Everton had accumulated 14 points from their first 12 games this season, winning four, drawing two, and losing six matches. However, this total has been slashed to four points following a ruling by an independent commission. The commission found that Everton had incurred a loss of £124.5 million for the period ending in 2021-22, surpassing the £105 million threshold outlined in the Premier League's Profit and Sustainability Rules.
In response to the decision, Everton has promptly expressed their intention to appeal, arguing that the punishment is "wholly disproportionate" and "unjust."
"An independent Commission has imposed an immediate deduction of 10 points on Everton FC for a breach of the Premier League's Profitability and Sustainability Rules (PSRs)," read a statement from the Premier League announcing the decision.
"The Premier League issued a complaint against the club and referred the case to an independent Commission earlier this year. During the proceedings, the club admitted it was in breach of the PSRs for the period ending season 2021-22 but the extent of the breach remained in dispute.
"Following a five-day hearing last month, the Commission determined that Everton FC's PSR Calculation for the relevant period resulted in a loss of £124.5m, as contended by the Premier League, which exceeded the threshold of £105m permitted under the PSRs. The Commission concluded that a sporting sanction in the form of a 10-point deduction should be imposed. That sanction has immediate effect."
The Premier League had pushed for a points deduction, arguing that the financial breaches gave Everton a "sporting advantage" and so deserved a "sporting sanction".
On the flip side, Everton contended that a monetary penalty, or at most, a ban on transfers, would constitute appropriate punishment.
"Everton Football Club is both shocked and disappointed by the ruling of the Premier League's Commission," read a statement from the Merseyside outfit.
"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. Everton cannot comment on this matter any further until the appeal process has concluded."
In explaining their decision in writing, the independent commission concurred that only a deduction of points would be adequate. They asserted that merely imposing a financial penalty on a club backed by a wealthy owner is not a substantial enough punishment.
Furthermore, the commission rejected the idea that Everton's breaches of Financial Fair Play (FFP) regulations were primarily linked to the construction of a new stadium. Instead, they asserted that the issues stemmed from overspending, particularly in acquiring new players and the difficulty in selling others.
Additionally, the commission attributed part of the problem to Everton finishing lower in the league than projected for the fiscal year 2022, securing the 16th position instead of the anticipated 6th, resulting in a loss of expected income amounting to approximately £21 million.
"Everton's understandable desire to improve its on-pitch performance (to replace the non-existent midfield, as Mr Moshiri put it in evidence) led it to take chances with its PSR position: those chances resulted in it exceeding the £105m threshold by £19.5m.
"The position that Everton finds itself in is of its own making – it is Everton's responsibility to ensure that it complies with the PSR regime. The excess over the threshold is significant. The consequence is that Everton's culpability is great.
"We take into account the fact that Everton's PSR trend over the relevant four years is positive, but cannot ignore the fact that the failure to comply with the PSR regime was the result of Everton irresponsibly taking a chance that things would turn out positively. Further, Everton was less than frank in its dealings with the Premier League over the stadium interest issue."
This decision might establish a precedent for potential breaches of Profit and Sustainability Rules (PSR) in the future, particularly relevant to Manchester City, who faced allegations earlier this year of 115 financial breaches.
Meanwhile, Everton is undergoing a proposed takeover by 777 Partners. Previous reports have suggested that any points deduction wouldn't impact the ongoing deal.
