In November 2023, Everton were deducted 10 points by an independent panel after being referred by the Premier League for breaching the English top flight’s Profit and Sustainability Rules (PSR).
The decision sent shockwaves through English football as a set of regulations many assumed to be toothless showed unexpected bite.
After being lumbered with the biggest points penalty in Premier League history, Everton launched an appeal against that punishment. They played on in the aftermath in a manner for which players and manager Sean Dyche deserve credit, winning four straight league matches in early December to boost their survival bid. However, a run of just one victory in 13 games in all competitions since has meant they enter March 2023 just a point outside the drop zone.
When will Dyche’s team learn their fate over their appeal, and what impact will it have upon their fight against relegation in the 2023/24 season?
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What are Premier League Profit and Sustainability Rules?
The Premier League Profit and Sustainability Rules dictate the amount of money that clubs are permitted to lose over a specific period. They determine how much these teams can spend on things like transfers, in the sense that each club must toe the line when it comes to balancing income and expenditure.
The rules are not the same as UEFA’s Club Licensing and Financial Fair Play Regulations, which apply to teams that play in competitions such as the Champions League and Europa League, although there are similarities.
In the simplest terms, PSR allows clubs to lose £105 million ($134m) over the course of three seasons, or £35m per season, on a rolling basis.
This is on the proviso that £90m is covered by secure funding from owners, such as buying up more shares instead of giving their clubs a loan. The three-year losses allowed without such guarantees are £15m.
These calculations do not include spending on a variety of exempt categories, such as youth development and infrastructure projects. Additionally, after the 2019/20 and 2020/21 seasons were heavily affected by the coronavirus pandemic, the Premier League made allowances for clubs to write off losses suffered as a result of the COVID-19 crisis.
If clubs without secure funding exceed the £15m parameter, they can have their budgets limited and transfers restricted by the league in order to bring their finances back into line.
However, the reason for the fixation on the £105m figure is that this is the amount, the big red line, that applies to most clubs. Go beyond this, and you end up being referred to an independent commission to be faced with more severe punishments, as was the case with Everton.
What did Everton do to break Premier League rules?
In their representations to the Premier League, Everton accepted they had exceeded the PSR threshold but cited the cost of interest on loans taken out for the development of their new Bramley-Moore Dock stadium, COVID-19 costs, and the impact of lost sponsorship revenue when oligarch Alisher Usmanov — an ally of their then-owner Farhad Moshiri — was sanctioned following Russia’s 2022 invasion of Ukraine.
Ultimately, Everton were unable to make these arguments stick sufficiently and the independent commission found in favour of the Premier League’s assertion that the Merseyside club’s losses for the three-year period up until 2021/22 tallied at £124.5m — £19.5m beyond the PSR threshold. An independent commission decided the Toffees should be deducted 10 Premier League points.
Everton formally appealed against that punishment, and the result of that appeal is expected to be announced soon. They have since been charged on similar grounds in relation to their 2022/23 accounts, along with Nottingham Forest.
MORE: English Premier League table 2023/24
When will Everton learn outcome of points-deduction appeal?
Multiple reports suggested Everton would learn the result of their appeal during the week commencing February 19. However, a verdict was not forthcoming, continuing an agonising wait for the club’s players, staff and supporters.
It is not yet known when the appeal outcome will be announced, but it is expected to be done soon, perhaps as early as the week beginning February 26.
If the ruling goes in Everton’s favour — either in the form of a reduced points penalty or it being expunged altogether — that should inspire confidence when it comes to contesting their most recent charges.
Everton and Forest must face an independent commission to decide what, if any, punishment they will face, or to lodge an appeal against any sanctions. The cut-off for that process is May 24, which is five days after the final round of Premier League fixtures.
Will Everton be relegated from the Premier League?
Everton’s 1-1 draw against Brighton & Hove Albion on February 24 put them a point and a place outside the relegation zone in 17th, having played a game more than third-bottom Luton Town.
In a best-case scenario of the Toffees being given their 10 points back, they would vault up to 13th place, all but ending their relegation fears.
Then we must factor in what, if any, punishment they will receive for the most recent alleged PSR breach. At this point it should be acknowledged that Forest are a place above Everton and only four points clear of the drop zone.
As such, if the midlands club have any points taken off, it could prove terminal to their survival hopes.
