Premier League club Everton has received a 10-point deduction for breaching financial rules, reportedly caused by interest payments for its £500m new stadium.
The penalty, imposed by a Premier League independent commission, is the heaviest points deduction in the competition’s history. Everton, which was found to have lost £124.5m in 2021-22, has already launched an appeal against the “wholly disproportionate” sanction.
The deduction means Everton drop into the relegation zone, sliding to 19th in the Premier League table. If they are relegated they could play their opening games at Bramley Moore Dock in the second-tier during 2024-25.
Why Everton were penalised
The points deduction was imposed after Everton were referred to an independent commission in March. The Premier League made the referral over a potential breach of profit and sustainability rules (PSRs). During the proceedings, the club admitted it was in breach of the PSRs during 2021-22. However, the extent remained in dispute.
Following a five-day hearing, the commission determined that Everton’s PSR calculation for the relevant period resulted in a loss of £124.5m, as contended by the Premier League. This exceeded the threshold of £105m permitted under the PSRs.
Tthe nature of the alleged breach has not been disclosed. However, Sky Sports News reports that the charge relates to interest payments on the cost of building the stadium.
Everton launches appeal
The club said in a statement: “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.”
Everton’s new stadium, which is being built by Laing O’Rourke, is scheduled for completion in the final months of 2024. The stadium was included on a list of 10 venues proposed to host UEFA Euro 2028.
Everton marked a new milestone last month as it installed the first seats at the 52,888-capacity stadium. The club hopes to have all seats in place across the upper tier of the bowl by Christmas.
777 Partners, the club’s prospective new owner, has reportedly provided a loan totalling “tens of millions” to support the project.
How PSR system works
All Premier League Clubs are assessed for their compliance with the PSRs each year. Compliance is assessed by reference to the club’s PSR calculation. This is the aggregate of its Adjusted Earnings Before Tax for the relevant assessment period. A club’s Adjusted Earnings Before Tax figure for each season takes account of its profit or loss after depreciation and interest, but before tax, and then applies a series of ‘add backs’, such as investment in infrastructure.
A club is in breach of PSRs if its calculation over the period results in a loss in excess of £105m.