Everton deducted 10 points by Premier League over financial fair play breach

Everton have been docked 10 points, the heaviest punishment handed to a Premier League team, for breaching financial fair play rules. The ruling leaves the club second from bottom, two points from safety.

Everton said they were “shocked and disappointed” by the decision after an investigation by an independent commission and would appeal. The appeal will be concluded before the end of the season.

Leeds, Leicester and Burnley have previously written to Everton’s prospective new owners, 777 Partners, warning they intend to sue for damages in the event of a guilty verdict. All three clubs were relegated in the past two seasons when Everton narrowly survived. Southampton, another relegated club, have also threatened to take legal action that collectively could run into tens of millions of pounds. Built-in clauses relating to the purchase of Everton mean the price will drop for 777 Partners if the charges are upheld.

Everton were referred to the commission after an audit of Premier League clubs’ financial records for the 2021-22 season. Last year Burnley and Leeds wrote to the Premier League to question whether Everton had broken the rules after they recorded losses of £371.8m over the last three years. Everton have always denied wrongdoing.

Under Premier League rules, clubs are allowed to lose a maximum of £105m over three years – and clubs who break its profitability and sustainability rules (PSRs) can be fined or deducted points.

A Premier League statement said: “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.”

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The problem centres around the club’s initial spend on their new stadium at Bramley Moore Dock. Everton believe they have a number of mitigating factors, which they explained to the commission. One issue Everton faced was having to pull out of a lucrative naming rights deal for the stadium with Alisher Usmanov’s holding company, USM, which was worth about £200m, after Russia invasion of Ukraine.

The ruling surpasses the nine-point deduction handed to Portsmouth in 2010 for going into administration. Middlesbrough are the only other club to have been punished in this manner. They received a three-point deduction for postponing a fixture against Blackburn at short notice, saying they were unable to field a team because of injury and illness.

Everton said in a statement: “The club believes that the commission has imposed a wholly disproportionate and unjust sporting sanction

… 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.”

Manchester City have been charged with more than 100 alleged breaches of the rules by the Premier League but are yet to have a verdict amid legal wrangling on both sides. City have denied wrongdoing. Chelsea are under investigation for alleged breaches relating to the era of Roman Abramovich’s ownership.

Steve Rotheram, mayor of Liverpool city region, said: “This is an excessive and grossly unfair punishment for a single charge – and makes a rod for the PL’s back in future. I’ll be supporting the club in their appeal.”