Everton 10 point deduction for breaching Premier League financial rules reduced after appeal

Granada Reports Sports Correspondent Chris Hall reports

Everton has had their penalty for breaching Premier League financial rules reduced following an appeal.

The club received the biggest sporting sanction in Premier League history after they were found to have breached profitability and sustainability rules in November 2023.

The Toffees were hit with a 10-point deduction after an independent commission found they had exceeded permitted losses under the league’s profitability and sustainability rules (PSR) by £19.5million over an assessment period ending with the 2021-22 season.

Following the deduction, CEO Colin Chong released a statement saying they were "shocked and disappointed by the ruling" and believed "the sanction is disproportionate and wholly unjust".

The club later lodged a formal appeal to the independent commission, and had been waiting since December for the outcome.

Now, after a three-day hearing in February, an independent Appeal Board has cut the deduction by four points, which moves the club on to 25 points in the table and up to 15th place.

In response to the outcome, Everton said they were "satisfied" with the reduction in points.

They said: "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 appeal board, comprising of Sir Gary Hickinbottom (Chair), Daniel Alexander KC and Katherine Apps KC, upheld two of the nine grounds the club appealed on.

Everton's appeal related to the sanction, rather than the fact of the breach, which the club admitted.

The Toffee's statement continued: "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.

"Notwithstanding the Appeal Board’s decision, and the positive outcome, the Club remains fully committed to cooperating with the Premier League in respect of the ongoing proceedings brought for the accounting period ending in June 2023."

The league referred Everton to the commission in March for an alleged breach of its profitability and sustainability rules in the period ending in the 2021-22 season.

The rules allow clubs to lose a maximum £105million over a three-year period or face sanctions.

The appeal board’s summary said Everton relied on nine grounds of appeal against the initial 10-point sanction, seven of which related to how the original commission dealt with various mitigating and aggravating factors.

Those seven were dismissed but the appeal board did conclude on the other two grounds that the original commission made legal errors.

The appeal board found the original commission was wrong in finding Everton had been “less than frank” in relation to what they told the Premier League about debt linked to their new stadium, and finding that in being so the club had breached a league rule requiring an obligation to act in utmost good faith.

While Everton’s representations regarding the stadium were found to be materially wrong, it was not the Premier League’s case that that was anything other than an innocent mistake.

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

Following today's announcement, Liverpool Metro Mayor Steve Rotheram - who has consistently voiced his disappointment at the original punishment - said in a statement:

"The Premier League's culture of secrecy has done nothing to foster confidence or trust."

How do Financial Fair Play rules work?

The Premier League reviews clubs’ accounts every year and sets a limit on the extent to which they can keep running at a loss. In summary, clubs must not lose more than £105m over a three-year period.

In terms of revenue, only a club's outgoings in transfers, employee benefits (including wages), finance costs and dividends will be considered over income from match-day sales, TV revenue, advertising, finance, player sales and prize money.

Funds spent on infrastructure, training facilities or youth training will not be included.

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