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Everton slugged with 10-point deduction by EPL over financial breach

Everton slugged with 10-point deduction by EPL over financial breach

The English Premier League (EPL) has announced a 10-point deduction for Everton due to the club’s violation of the league’s Profitability and Sustainability Rules (PSRs).

The breach, stemming from the 2021-22 season, reveals that Everton incurred a loss of £124.5 million, surpassing the PSRs limit of £105 million by nearly £20 million.

This significant points deduction, which could have led to relegation in the past two seasons, was handed down by an independent commission following the league’s referral of Everton in March. Despite admitting the breach, the club contested the extent of its violation.

The commission’s full report criticised Everton for being “less than frank” regarding the PSR calculation related to interest payments for its Bramley Moore Dock stadium development. Everton argued that these payments should be considered as expenditure, a stance disputed by the Premier League. The club also highlighted the loss of stadium naming rights due to the Russian invasion of Ukraine, leading to government intervention.

While the Premier League did not accuse Everton of dishonesty regarding stadium interest, the committee asserted that the club “failed to discharge the duty of utmost good faith”, heightening its culpability.

The independent committee stated, “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 […] the failure to comply with the PSR regime was the result of Everton irresponsibly taking a chance that things would turn out positively.”

In response, Everton expressed disappointment at what the club deemed a “wholly disproportionate and unjust sporting sanction” and declared their intent to appeal.

The club’s statement read:

“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.

“[Everton] 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.”

Everton now joins an exclusive group, becoming only the third club in EPL history to face a points deduction, following Middlesbrough in 1997 (three points for failing to fulfil a fixture) and Portsmouth in 2010 (nine points for entering administration).

The public response questions the league’s focus on Everton, highlighting perceived leniency toward giants Chelsea and Manchester City, the latter facing 115 charges of breaching financial rules.

“It calls into question the processes and governance of the Premier League,” said Conrad Wiacek, GlobalData Sports analyst.

“Manchester City were charged in February, but no movement has happened there, whereas Everton were only charged in March. It also exacerbates accusations of bias, with referees recently taking trips to the UAE to officiate matches for substantial financial compensation.

“Any breach of financial rules resulting in a points deduction means the Premier League will have to apply the same punishment to City and Chelsea if both clubs are found guilty.

“In City’s case, with 115 charges pending, that could result in multiple relegations and losing honours.”

The Everton saga adds fuel to debates about the Premier League’s governance, especially given the delay in regulatory approval for the club’s recent takeover by US-based private equity firm 777 Partners.

As it stands, the 10-point deduction has seen Everton – with four wins and two draws from its 12 matches so far in the 2023-24 EPL campaign – plummet from 13th on the ladder to second-last and genuine relegation danger.

Image credit: Ben Sutherland

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