Everton 10-point deduction cut to six but club still face further financial case

Everton are up to 15th in the Premier League after their penalty for breaching the competition’s financial rules was reduced to six points on appeal, but they face the threat of further sanction with a second case still to be heard.

An independent appeal board set aside the 10-point sanction originally imposed by a commission in November for breaching league profitability and sustainability rules (PSR), with the new reduced penalty lifting the Toffees’ points tally from 21 to 25.

Everton said they were “satisfied” the appeal had resulted in a reduction in the points penalty, but the club are not wholly out of the woods and could have a further points sanction imposed in relation to a second PSR complaint which was laid on January 15.

Club Statement. https://t.co/16Xc0qrLtv

— Everton (@Everton) February 26, 2024

That one has to be completely concluded before June 1 – the date when promoted clubs receive their Premier League ‘shares’.

It is also unclear whether the club may face compensation claims related to the first PSR breach. A ruling published at the time of the original 10-point penalty said five clubs – Burnley, Leeds, Leicester, Nottingham Forest and Southampton – had 28 days from written receipt of a copy of the decision against Everton to pursue a claim.

None of those clubs confirmed whether they had pursued a claim when contacted by the PA news agency last week. One of them, Forest, have had a PSR complaint lodged against them since the original sanction was issued against Everton.

The reduced six-point penalty for Everton relates to breaching PSR in the assessment period up to the 2021-22 season. The appeal board rejected seven grounds for mitigation put forward by Everton but did find the original commission made legal errors.

The first of those was in relation to club representations to the Premier League in August 2022 over stadium debt, which the original commission said were “less than frank”.

While the appeal board found these representations were “materially wrong”, it accepted that it had never been the Premier League’s case that this was anything other than an innocent mistake by Everton.

Similarly, the appeal board said a breach of Premier League rule B.15, which requires clubs to act in utmost good faith, was never part of the original complaint against the club.

“The first time rule B.15 appeared was in the commission’s decision,” the appeal board ruling stated.

The appeal board also found it was wrong of the commission not to take into account available benchmarks for sanction, such as EFL guidelines.

The appeal board revealed it considered other possible sanctions, such as a fine or a ban on registering players, but concluded a points deduction was warranted.

“The unfair advantage achieved by a breach may include a financial advantage over other clubs, but it is most immediately a sporting advantage and consequently the sanction for breach can legitimately focus on sporting disadvantage,” the appeal board decision said.

The reduction in penalty means Luton are now four points from safety in the Premier League, but their manager Rob Edwards accepted the issue was out of the Hatters’ hands.

Forest drop to 17th, and their manager Nuno Espirito Santo said: “Regarding the hearing and the decision, we are waiting.

“There are people in the club that are taking care of that. So these questions are not appropriate for me.”

Everton released a statement following the publication of the revised sanction.

“While the club is still digesting the appeal board’s decision, we are satisfied our appeal has resulted in a reduction in the points sanction,” the statement read.

“We understand the appeal board considered the 10-point deduction originally imposed to be inappropriate when assessed against the available benchmarks of which the club made the commission aware, including the position under the relevant EFL regulations, and the nine-point deduction that is imposed under the Premier League’s own rules in the event of insolvency.

“The club is also particularly pleased with the appeal board’s decision to overturn the original commission’s finding that the club failed to act in utmost good faith.

“That decision, along with reducing the points deduction, was an incredibly important point of principle for the club on appeal. The club, therefore, feels vindicated in pursuing its appeal.”

I was proud to be able to take the fight against Everton’s disproportionate & unfair penalty to Parliament & am pleased to see their points deduction reduced today. https://t.co/5dztSEEp9t

— lan Byrne MP (@IanByrneMP) February 26, 2024

The club said they remain fully committed to co-operating with the Premier League in respect of the second complaint, which relates to a PSR breach in the assessment period up to the end of the 2022-23 season.

If clubs breach PSRs in consecutive seasons, they can provide evidence and make submissions to the independent commission hearing their case that any crossover should be treated as a mitigating factor.

Labour MP Ian Byrne, who tabled an early day motion in the House of Commons in response to the initial 10-point deduction, wrote on X: “I was proud to be able to take the fight against Everton’s disproportionate & unfair penalty to Parliament and am pleased to see their points deduction reduced today.”