Everton have been docked 10 points with immediate effect for a breach of the Premier League’s Profitability and Sustainability Rules (PSRs).
The ruling comes after a five-day hearing last month at which an independent commission determined the club had exceeded by £19.5million the £105m threshold permitted for the period ending at the culmination of the 2021/22 season.
The guilty verdict also opens the door for Leeds, Leicester and Burnley to follow through on their intention to sue the club for damages after they suffered relegation over the past two seasons while Everton survived.
The punishment sees the Toffees slip to 19th in the Premier League table, two points from safety and in relegation danger. The club’s position has always been that an accounting issue should not result in a sporting sanction and they have already outlined their intention to appeal.
An Everton statement read: “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.”
— Everton (@Everton) November 17, 2023
In the written reasons for the verdict, the independent commission said Everton’s was a “significant breach that requires a significant penalty”.
It wrote: “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. The reality is that Everton failed to manage its finances so as to operate within the generous threshold of £105 million.
“Its mismanagement led to that threshold being exceeded by £19.5 million. This was a serious breach that requires a significant penalty. The Commission considers that it should order an immediate deduction of 10 points.”
There has been speculation the overspend came about due to interest payments on the club’s new ground, but the commission suggested instead it was related to issues with player trading and an optimistic forecast of finishing sixth in the Premier League.
The commission added: “The cause of Everton’s PSR difficulties was the fact that it overspent (largely on its purchase of new players and its inability to sell other players), and because it finished lower in the league than it had projected in financial year 2022 (16th against the projected 6th – causing a loss of expected income of c.£21 million).
“Everton’s understandable desire to improve its on-pitch performance (to replace the
non-existent midfield, as [Everton’s majority shareholder Farhad] Mr Moshiri put it in evidence) led it to take chances with its PSR position: those chances resulted in it exceeding the £105 million threshold by £19.5 million.”