The arguments Everton hope will help them avoid a second FFP points deduction
Everton repeatedly raised the issue of “double jeopardy” with the Premier League before being charged with a second successive breach of financial regulations, i can reveal.
The Premier League analyses the previous three seasons of spending when it determines if clubs have spent over the permitted maximum of £105m, an average of £35m per season.
Yet, having already been charged and deducted 10 points, Everton have, effectively, been punished again for a large percentage of the same accounting period.
Such is the link between the two cases, i understands that an independent commission tasked with determining what, if any, punishment Everton face will not consider the new evidence until after their appeal has been heard for the initial charges.
Everton’s appeal is expected to be heard before the end of February.
A club statement said: “Everton Football Club acknowledges the Premier League’s decision to refer a breach of Profit & Sustainability rules [PSR] for the assessment period ending with the 2022/23 season to an independent Premier League commission.
“This relates to a period which covers seasons 2019-20, 2020-21, 2021-22 and 2022-23. It therefore includes financial periods [2019-20, 2020-21 and 2021-22] for which the club has already received a 10-point sanction. The club is currently appealing that sanction.
“The Premier League does not have guidelines which prevent a club being sanctioned for alleged breaches in financial periods which have already been subject to punishment, unlike other governing bodies, including the EFL. As a result – and because of the Premier League’s new commitment to deal with such matters ‘in-season’ – the club is in a position where it has had no option but to submit a PSR calculation which remains subject to change, pending the outcome of the appeal.
“The club must now defend another Premier League complaint which includes the very same financial periods for which it has already been sanctioned, before that appeal has even been heard. The club takes the view that this results from a clear deficiency in the Premier League’s rules.
“Everton can assure its fans that it will continue to defend its position during the ongoing appeal and, should it be required to do so, at any future commission – and that the impact on supporters will be reflected as part of that process.”
One of Everton’s most compelling arguments is around the costs of the new Bramley-Moore Dock stadium and how that impacted expenditure. The club lost a £200m naming rights pre-agreement with USM after Alisher Usmanov, the company’s owner, was sanctioned for links to Russia’s war in Ukraine.
Two key arguments are expected to be the disproportionate scale of the punishment and the interpretation of mitigating circumstances in the original case.
There was also disagreement over writing off interest on loans for the club’s new stadium build.
The Premier League, and subsequent commission, ruled last October that Everton had overspent by £19.5m for the accounting period up to 2021-22.
Football finance expert Kieran Maguire has pointed out that the spending threshold for the profit and sustainability rules (PSR) – formerly known as Financial Fair Play (FFP) – has not been increased since 2013.
“If Premier League limits had risen in line with football inflation since 2013 [based on player wages] clubs could lose up to £218m over three years,” he posted on X.
“Non adjustment of limits is similar to fiscal drag when government doesn’t raise tax thresholds. The non-increase of the PSR limits has hit clubs with new owners since 2013 hardest, such as Newcastle, Everton and [Aston] Villa.”
The club were informed by the Premier League on Monday morning that they will be referred to an independent commission for a second breach of the PSR over the four year period from 2019-23. The pandemic has meant for some periods the accounts are analysed for four years.
i understands Everton are particularly frustrated by the timing of the referral, which comes before an appeal of November’s commission that will rule on many of the issues that are central to any new breach.
If the appeal finds in Everton’s favour the club believe it will have a huge impact on this new breach – perhaps to the extent where the Toffees are compliant with PSR and it is not needed.
i understands there was “significant dialogue” between the club and the Premier League over both the timing of the new referral – before an appeal of their 10 point deduction which will rule on many issues pertinent to the new charges – and over the principle of “double jeopardy”, whereby it is almost impossible for a club to avoid another sanction in a three-year period in which they have already been found to be in breach of the permissible losses.
A rule to prevent that situation is already in place in the EFL – who cap a club’s losses – but the Premier League has not introduced it.
Everton’s position is that the new referral covers 75 per cent of the period they have already been sanctioned for, so they are being punished twice despite taking steps to address issues in the last financial year.
One source likened it to being in credit card debt and unable to get out of a spiral of debt.
It represents another costly and time-consuming problem for Everton to deal with at a critical juncture in the club’s history.
They are in the thick of a relegation fight and serious questions continue to swirl over their financial state. They have been lent £150m by would-be owners 777 Partners to continue to meet the funding requirements of their new stadium.
There is also the ongoing saga of a potential sale to the American private investment firm, which had an original timeline of being concluded by the end of the year. That has dragged on for over three months and is still going through the Premier League’s owners and directors’ tests.
It remains to be seen how the new charges will impact on that, although sources said 777 Partners are “fully aware” of the club’s financial situation and have had full access to the accounts for an extended period of time.
The new charges will prompt fury from Everton supporters, who have protested against the Premier League since November’s bombshell judgement.
