What you need to know about the Everton point deduction

The 10-point deduction sees the club plunge into the relegation zone.

Why has Everton received a points deduction?

The Premier League said that, during a five-day hearing with an independent commission, the club admitted it was in breach of the league’s profitability and sustainability rules (PSR).

Financial fair play rules state that Premier League clubs can lose a maximum of £105 million over three years. Clubs that break the rules can be fined or have points deducted.

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.”

Why were the club under investigation in the first place?

An audit of Premier League clubs’ financial records in the 2021-22 season saw Everton referred to the commission. Two teams relegated from the division last season had also written to the Premier to question whether Everton’s loss of £371.8m in the previous three years meant they had broken the rules. Everton deny wrongdoing.

The issue concerns the club’s initial spending on their new Bramley Moore Dock stadium. Everton believes they have several mitigating factors, which they outlined to the commission. One financial issue relates to Everton having to pull out of a £200m naming rights deal for the stadium with Alisher Usmanov’s holding company, USM, after Russia invaded Ukraine.

What happens next?

As the point deduction is immediate, the club have dropped from 14 points to 4, dropping from 14th position to 19th.

Everton have issued a statement and submitted an appeal. The club said:

“The club believes that the commission has imposed a wholly disproportionate and unjust sporting sanction.

The club has already communicated its intention to appeal the decision to the Premier League. The appeal process will now commence and the club’s case will be heard by an appeal board appointed pursuant to the Premier League’s rules in due course.

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.”

Will the points deduction affect other Premier League Clubs?

Burnley, Leeds and Leicester, all relegated in the last two seasons, have previously contacted Everton’s prospective new owners, 777 Partners, to inform them they intend to sue for damages should the commission return a guilty verdict. Southampton, relegated last season, have also threatened legal action.

Manchester City and Chelsea will closely watch developments as both clubs face investigations into alleged breaches of financial fair play.

Has anything like this happened before?

Only two other clubs have ever received points deductions from The Premier League. Middlesbrough were deducted three points for failing to fulfil a fixture during the 1996/97 season. Portsmouth were imposed with a nine-point deduction after going into administration in 2010.

The sanction issued to Everton is the heaviest in Premier League history.

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 PLs’ back in the future. I’ll be supporting the club in their appeal.”