On Monday 6 February, news of alleged breaches and subsequent charges, brought by the Premier League against Manchester City, radiated through the media. These charges were said to include more than a hundred breaches of financial rules, following a four-year investigation, including what was described as a failure to provide "accurate financial information that gives a true and fair value of the club's financial position". This spanned various monetary injections, including revenue from sponsorship, match day income, club licensing, player & staff salaries and operating costs. A breakdown of the charges can be found in one of our earlier pieces here.
Another Monday morning and we see numerous reports of the Premier League turning their attention to Merseyside, as Everton Football Club have been referred to an independent commission for alleged breaches of the Premier league's Profitability & Sustainability rules (the Rules). A detailed breakdown of these rules and the necessity for conformity by Premier League clubs can be found here.
The Premier League's statement read:
"In accordance with Premier League Rule W.82.1, the Premier League confirms that it has today referred an alleged breach of the League’s Profitability and Sustainability Rules by Everton Football Club to a Commission under Premier League Rule W.3.4. The assessment period for which it is alleged that the Club is in breach is the period ending Season 2021/22.
Commissions are independent of the Premier League and member clubs. The members of the Commission will be appointed by the independent Chair of the Premier League Judicial Panel, in accordance with Premier League Rules W.19, W.20 and W.26."
In a similar manner to Manchester City, Everton are "prepared to robustly defend [their] position to the commission". Unlike Manchester City, however, Everton have stated that the "club has, over several years, provided information to the Premier League in an open and transparent manner and has consciously chosen to act with the utmost good faith at all times."
Reports in the media, in conjunction with the Premier League's statement on the matter, suggest that Everton may have exceeded the threshold of debt carried over a three-year period. Under the Rules, clubs are able to only take a maximum loss of £105 million over a three-year period. Everton's latest financial summary reveals losses of up to £372 million.
Further controversy stemmed over the weekend when it was revealed that rivals Leeds United and Burnley each reportedly wrote to the Premier League in May 2021, claiming that the Toffees may have breached the Rules and requesting that the club be investigated via the independent commission. Everton, of course, insisted that they had been fully compliant at that juncture. The Premier League reportedly took a different view at shareholders meetings on two separate occasions last year, first in March and then during the summer transfer window. Everton were indeed scrutinised for their transfer dealings, which resulted in a mandate to raise capital via player sales before the end of the 2021-22 financial year.
Evidence supporting this is perhaps to be found in the £50 million transfer of star player Richarlison from Merseyside to Tottenham Hotspur. Furthermore, Everton had restrictions imposed on incoming transfers if they weren't offset by further outgoings.
Both Leeds and Burnley were said to be frustrated that the Premier League had failed to act at the time when their attention was first drawn to the potential breaches, instead taking action toward the end of the current season, almost 12 months later.
This might also explain the unexpected transfer of boyhood Everton fan, Anthony Gordon, to Newcastle United for a reported fee of £45 million during the recent January transfer window.
Everton now face the prospect of a potential points deduction, if the independent commission holds against them. According to the Premier League:
"The proceedings before the Commission will, in accordance with Premier League Rule W.82, be confidential and heard in private. Under Premier League Rule W.82.2, the Commission’s final award will be published on the Premier League’s website. The League will be making no further comment until that time."
Any ruling by the commission isn't expected to come until the summer at the earliest, meaning that any punishment levied against Everton, currently sitting 15th in the table, won't be implemented until next season, despite a mere 4 points separating 12th and 20th position.
If the breaches against the Toffees are upheld, the consequences for the club could include relegation to the Championship via a points deduction, or a transfer ban for a period of time. The latter could force new manager Sean Dyche to operate with a thinner squad next season; a situation that English football has seen before, when he was in charge at Burnley.
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