Why was the initial 10-point penalty reduced?
The appeal board imposed a six-point deduction on Everton, which imposed the largest sporting sanction in the history of the Premier League last year, concluding that “the commission made legal errors”. The commission said it was wrong to say Everton had been “not very forthcoming” about the debt incurred to build the new stadium at Bramley-Moore Dock and had therefore breached another Premier League rule, B.15. Clubs have an obligation to act in “extreme good faith”.
Secondly, the commission was wrong in not taking into account the existing criteria when deciding on the penalty. For example, not taking into account the sanctions formula used by the EFL was a significant mistake. Everton argued that the fines and deferred points deductions imposed on the six Premier League clubs trying to qualify for the European Super League should be used as a reference.
Relating to: Everton’s Premier League cutoff reduced from 10 points to 6 points
So is the appeal a victory for Everton?
No. The club claim that they “got it right” by appealing, and this is true to some extent (to the extent of four points to be exact), but more importantly the board rejected seven of the nine grounds of appeal put forward by the Commission. “super silk” Laurence Rabinowitz KC. Everton had presented as mitigating factors for the breach the £19.5 million loss of sponsorship deals with companies linked to oligarch Alisher Usmanov, who was sanctioned by the UK government following Russia’s invasion of Ukraine in 2022. Usmanov and his former business partner and Everton owner Farhad Moshiri claimed that he was close to signing a lucrative naming rights deal for the new stadium when the war broke out. The interest on loans taken during the accounting period, which Everton claimed were linked to the stadium but which the Premier League claimed were for working capital, was another, on top of an estimated £10 million loss incurred when Everton canceled the contract of an arrested player. on suspicion of child abuse.
The club’s failure to cooperate with the Premier League on expenses, failure to consider alternative sanctions such as transfer bans or fines, and errors in the approach to the club’s excessive spending and associated sporting advantages were among others. The appeals panel found that the commission was correct in rejecting all of these as mitigating circumstances.
So will Everton be at risk of another points deduction?
Yes. Details of the second charge and the extent of Everton’s alleged breach for the three-year period until 2023 have not been disclosed, but the case is expected to be heard and resolved by the end of the Premier League season. If the appeal panel had accepted, for example, that the Usmanov sponsorship deals and the costs of the new stadium project were mitigating factors for the club’s losses, then the defense against both charges would have been strengthened.
After all, the second charge covers two of the three years for which Everton was found guilty. But both the original commission and the appeal panel have now rejected the gist of Everton’s claim that the profit and sustainability rules (PSR) for the period to 2022 had been breached. “The board agrees with the commission that the main reason for the club’s breach was that it failed to manage its finances prudently. [as] should have done this,” their findings read.
Premier League victory then?
Not at all. The appeal panel’s decision not only highlights legal errors made by the commission, but also raises further questions about the Premier League’s regulatory processes, or lack thereof. In the absence of an agreed sanctions formula for PSR breaches, the Premier League adopted a sanctions policy specific to Everton’s case on 10 August 2023, five months after the club was charged.
Richard Masters, the Premier League’s chief executive, suggested a six-point penalty plus an extra point for every £5 million lost as a starting point. The Premier League later clarified that it had not sought to impose a policy on the commission at the pre-hearing review in October 2023, but had made a submission, as was its right. The commission rejected the application but ultimately imposed a 10-point deduction, which was fully in line with the Premier League’s offer. Masters has refused a request from the culture, media and sport committee to publish minutes of an August meeting at which the Premier League agreed its proposed sanctions policy for Everton.
The appeal panel rejected the Premier League’s view on the level of penalty the £19.5m breach would warrant. Steve Rotheram, mayor of Liverpool city region, said: “A 40% reduction in fines shows how harsh this penalty is [initial] The decision was as follows; however, the club is potentially facing double jeopardy, having been penalized twice for alleged breaches in a similar period. But this is much more than this individual case. Fans and clubs need to have confidence in the rules and processes that govern our beloved game. The Premier League’s culture of secrecy has done nothing to encourage trust or confidence. How can any fan, club or player have confidence that the Premier League’s sanctions process will proceed without a clear and transparent framework for sanctions? The league must now publish the formula it plans to use when calculating penalties for similar violations. “This is an urgent matter, given the two cases that need to be solved this season.”