On 17th November 2023, it was announced that Everton would be hit with a 10-point deduction following breaches of the Premier League’s Profitability and Sustainability Rules. However, what are these rules and what was the reason the club were hit with the points penalty? To provide a background, first an explanation of the Profitability and Sustainability Rules (PSR) and the procedure will be provided.
PSR and procedure
Clubs were required to submit financial accounts by 1st March, covering the prior two years together with an estimate for the current year. A recent change means that this requirement must instead be fulfilled by 31st December. If the combined accounts for the preceding two years show a loss, clubs must provide a PSR calculation which shows adjusted earnings before tax (AEBT) for the current year and each of the two preceding years. AEBT excludes certain costs, like those benefiting football (e.g., Women’s Football). Notably, exemptions were allowed for the seasons 2019/20 to 2021/22 with respect to costs directly pandemic-related. The PSR calculation for FY 2022 comprised FY 2019, an average of FY 2020 and 2021 (due to an exceptional amendment made in August 2020), and FY 2022. This Profit and Sustainability Reporting (PSR) aims to ensure clubs operate within their means, while allowing owner support.
If the PSR calculations show a loss of up to £15 million, then the Premier League will determine whether in the next financial year (T+1) the club can fulfil its obligations to the league and pay its creditors and employees when due. If the clubs’ calculation shows a loss of greater than £15 million but less than £105 million, then the club must provide forecasting to the Premier League until the end of T+2 and satisfy the League of its ability to provide evidence of secure funding. In the event of losses greater than £105 million, then the club is considered to have breached the PSR and referred to a Commission to determine the case. In this case, the Premier League alleged that Everton made losses under the PSR calculation of £124.5 million for FY 2022, more than the £105 million permitted.
Timeline of events
Following on from a background to the PSR rules, an explanation of the timeline of events that led to this complaint being issues will be provided. Back in 2016, Farhad Moshiri acquired an interest in Everton, before then becoming majority shareholder in September 2018, and he sought to transform them into one of the top league clubs while also providing them with a new, state-of-the-art stadium. In a bid to realise his aspiration of a new stadium for the club, they embarked on the construction of a new stadium at Bramley-Moore Dock. A wholly-owned subsidiary, Everton Stadium Development Limited, was set up to carry out the development. This project cost was considerable and is now estimated to total £760 million. Everton Stadium Development Limited had no income and was wholly reliant on funds from the club to enable to it carry out the development.
Everton’s plan was that part of the stadium cost would be funded by Moshiri, but mostly it would be funded by third-party debt, which was intended to fund the stadium for a period of 30 years. Until such debt could be obtained, Everton continued to fund the stadium development by means of an intercompany loan to Everton Stadium Development Limited. Moshiri provided the club with interest-free loans, some of which were then converted into shares and his investment is estimated to total £750 million.
In addition, Everton secured commercial loans from Metro Bank PLC and Rights & Media Funding Limited on April 29, 2021. As per the accounts dated June 30, 2022, the club borrowed £26.25 million from Metro Bank PLC and £150 million from Rights & Media Funding Limited. Everton asserted that the incoming funds, whether from Moshiri or the commercial lenders, were not ringfenced and could be considered fungible.
In early 2019, Everton identified an anomaly in the treatment of stadium expenditure, as given that the location of the project on Bramley-Moore Dock is a UNESCO World Heritage Site, a significant level of investment was made before planning permission was granted. Financial Reporting Standard (FRS) 102 provided that expenditure could not be capitalised until it was probable that a future economic benefit (which in practical terms, meant granting of planning permission) associated with the expenditure would flow to Everton. Therefore, instead of the expenditure being capitalised, it had to be recorded as a cost for AEBT and so in the PSR calculation, and in October 2019, Everton engaged in discussions with the Premier League about this so-called capitalisation anomaly. In fact, on 20th February 2020, the then-Everton CEO, Denise Barrett-Baxendale, wrote to the Premier League requesting that Everton Stadium Development Limited should be excluded from Everton’s reporting perimeter.
On 5th January 2021, Barrett-Baxendale issued a New Stadium Project update and the club stated that roughly £54 million of investment could not be capitalised due to a lack of planning permission. On 14th January 2021, the Premier League issued a report to its board on Everton’s expenditure and noted that the club was forecast to breach the maximum permitted PSR loss of £105 million but would not do so if stadium expenditure was excluded. The report went on to recommend that the Premier League negotiate an agreed sanction with Everton for PSR breaches with the sanction reflecting the anomaly identified by the club.
On 23rd February 2021, Liverpool City Council granted Everton planning permission, with the Secretary of State confirming on 26th March 2021 that the issue would not be called in, hence the granting of planning permission meant that stadium expenditure incurred in and after FY 2021 could be capitalised.
Discussions between Everton and the Premier League regarding the club’s inability to capitalised stadium expenditure before FY 2021 continued and culminated in the 13th August 2021 agreement, which stated:
· The club incurred costs of roughly £39.3 million in respect of the stadium from FY 2017 till FY 2020 (both years included), which could not be capitalised and had to instead be included in its PSR calculation.
· The club was forecast to be non-compliant with PSR by having a calculation with losses exceeding £105 million for the 2020/21 season and potentially even for seasons 2021/22 and 2022/23.
· If the club’s PSR calculation for seasons 2020/21, 2021/22 and 2022/23 did not exceed the £105 million limit and such portion of the costs as falls to be reported in the relevant period, the Premier League agrees that it would not:
o Exercise its powers set out in Rule E.15 in respect of potential non-compliance AND/OR
o Refer the potential non-compliance to a Commission.
In 2017, Everton signed Player X, who was arrested in July 2021 and then dismissed by the club on 23rd August 2021 (Player X has never been named publicly for legal reasons ever since the arrest, was not named in the Commission’s report, and will not be named in this article despite near-certainty as to the identity of the player). Everton sought advice on the possibility of suing him for a breach of contract, but ultimately elected against this.
By early 2022, it was clear that the club would struggle to meet the PSR target even allowing for the 13th August 2021 agreement, due to underperformance on the pitch. On 30th June 2022, Everton sold Richarlison to Tottenham Hotspur for £60 million, rather than the planned amount of £80 million, which they considered directly attributable to its PSR calculations. In addition, Everton cited that ongoing negotiations for a stadium naming rights agreement with USM Services Limited were halted by sanctions imposed on Russia following its invasion of Ukraine.
In February 2022, Everton opted to pass on interest charges payable under Rights & Media Funding and Metro Bank PLC loans by charging interest on the inter-company loan to Everton Stadium Development Limited, with the intention of calculating interest retrospectively from FY 2018 and all included in the FY 2022 accounts.
The club then submitted its audited accounts for FY 2021 to the Premier League on 18th March 2022, before submitting its 2021 PSR calculation on the 31st of March. In its calculation, Everton sought to make four key exclusions, namely:
1. £17.4 million interest charge passed onto Everton Stadium Development Limited
2. £5.8 million relating to that part of the transfer levy passed on by the Premier League in respect of Youth Development
3. £10 million in respect of loss incurred for not suing Player X
4. £61 million relating to player trading losses attributable to COVID, in addition to permitted costs by the rules dating 6th August 2020
On 9th December 2022, in response the Premier League Board provisionally indicated that none of the exclusions were permissible for the PSR calculation. On 2nd March 2023, Everton submitted its PSR calculation for FY 2022, and showed an adjusted loss of £87.1 million, which would be compliant since it is less than £105 million, but the Premier League refuted the club’s additional exclusions and, on 24th March 2023, referred Everton to the Commission and argued that the club’s PSR calculation should show a £120.8 million loss.
The Premier League had requested an expedited hearing over the issue so as to conclude the matter before the end of the 2022/23 season (which was 2 months after the complaint), but the Commission determined that this was unrealistic to expect a hearing and any appeal to be concluded in the timeframe considered.
Initially, Everton argued that the exclusions producing an £87.1 million loss were legitimate, and also cited 4 substantial mitigating factors, namely: the stadium project, losses because of Player X, the impact of COVID-19 and the fact that the club co-operated transparently with the Premier League. The Premier League took issue with all additional exclusions and challenged many of Everton's mitigating factors.
On 4th October 2023, in its Amended Response, Everton admitted to breaching the threshold of the PSR calculation, claiming losses of £112.9 million, £7.9 million above the limit while maintaining it was entitled to mitigation. The Premier League, on the other hand, rejected the club’s claimed entitlement to mitigation and additional exclusions, arguing instead that there were aggravating factors which put the loss at £124.5 million rather than the initial £120.8 million.
The Premier League identified four areas of dispute:
1. Post-planning stadium costs – Everton claimed to exclude £14.5 million in costs relating to charges that were incurred after planning permission was obtained, and the Premier League argued that this expenditure falls outside the 13th August 2021 agreement, while also suggesting that the sum is incorrect.
2. Transfer levy: clubs pay a 4% levy on transfer fees, which sums are used to fund the footballers’ pension scheme, and any surplus is distributed by the Premier League to the Professional Game Youth Fund. Everton argued that the surplus is part of Youth Development Expenditure and should be excluded from the PSR calculation. On the other hand, the Premier League asserts that this attempt was unprecedented, and thus objected due to it being both unprecedented and wrong in principle.
3. Player termination loss: Everton sought to exclude £10 million loss on a potential claim against Player X from its PSR calculation, but the Premier League objected on grounds of principle and uncertainty.
4. COVID: Everton sought to exclude the sum of £43.9 million on grounds of impact of player trading in the 2020 summer transfer window caused by COVID. The Premier League objected and argued that this did not fall within COVID-19 provisions, while further asserting that Everton chose not to sell Player Y and no COVID-based deduction can be claimed.
In its amended complaint, the Premier League went on to advance four aggravating factors, namely:
1. Everton overspent on players and failed to take steps to reduce player spending.
2. The amount by which Everton’s losses exceeded the threshold.
3. The fact that Everton submitted misleading information about stadium financing costs.
4. The fact that Everton decided not to sell player Y, contrary to its COVID-19 related representations.
In its amended answer, Everton did admit a PSR breach but disputed the size, arguing that the Premier League should have excluded transfer levy sums worth £7.6 million and pre-planning stadium interest sums of £4.1 million. In addition, Everton argued six mitigating factors:
1. It could have treated stadium post-planning charges of £9.3 million as capital expenditure, therefore reducing loss before tax by that sum.
2. The player termination loss on Player X should be considered a mitigating factor.
3. COVID-19 prevented Everton from selling players and the opportunity to realise amortisation and wage savings.
4. Everton co-operated fully and proactively with the Premier League in relation to its PSR challenges.
5. Everton’s PSR adjusted losses demonstrated a positive trend.
6. The impact of the Russian invasion of Ukraine caused a significant and unexpected impact on its investment and sponsorship income.
Everton concluded by saying that the club’s alleged overspend arose from a combination of unforeseen circumstances, which thus imply that there should be no sporting sanction. In its amended reply, the Premier League addressed Everton’s points.
With respect to stadium interest, the Premier League put forward 3 arguments. First, it claims that any costs incurred in the financial year of which planning permission was obtained cannot be excluded from the PSR calculation, and thus the maximum possible exclusion was equal to £2.2 million. Secondly, it argues that in any event, only interest costs incurred in relation to the stadium could have been included, therefore the entirety of the pre-planning interest should not have been excluded. Thirdly, it argued that the interest is an inter-company charge that does not impact earnings before tax in the consolidated accounts and so cannot be excluded from the PSR calculation. With respect to the transfer levy point, the Premier League argues that firstly it is not expenditure by a club but by the Premier League of funds derived from the levy, and secondly, levy payments are not directly attributable to Professional Game Youth Fund.
The Premier League also addressed the mitigation points advanced by Everton:
· Stadium interest – if the Premier League’s construction of the August 2021 agreement is correct, then there is no basis for holding that Everton’s belief could constitute mitigation.
· Player termination – Everton could not show that the alleged loss (allegedly £10m on player X) was in fact due, or recoverable, and thus it cannot stand as mitigation.
· COVID – the sums to which Everton refers to fall outside the COVID concessions and are of a nature borne by other clubs, therefore there is no basis of saying that they can constitute a mitigating factor.
· Co-operation – the Premier League accepts that in principle this could be a mitigating factor but rejects the suggestion that the facts of this case can constitute mitigation.
Issues to be determined
Ultimately, there were seven key issues that were in the hands of the Commission to determine, as follows:
1. Quantifying the extent of Everton’s PSR breach – the amount by which its PSR calculation exceeded the £105 million threshold for FY 2022.
2. Determining the principles that should be applied when determining the appropriate sanction.
3. Determining the character of facts capable of constituting aggravation.
4. Application of the principles relating to aggravation to the facts relied on.
5. The principles to be applied to evaluation of what Everton advanced as mitigating factors.
6. Application of those principles relating to mitigation to the facts relied on.
7. Determination of the appropriate sanction, together with the Commission’s reasons.
In relation to quantification of the breach, there were two key issues: youth development and pre-planning stadium interest. The PSR regime allows clubs to exclude Youth Development Expenditure, and Everton in addition opted to exclude the proportion of the transfer levy, relating to a 4% charge on transfer payments made by a club which was passed on by the Premier League to the Professional Game Youth Fund for youth development. Everton argued that this expenditure is directly attributable to the development of academy players. The Premier League, however, disagreed and argued that the purpose of Youth Development expenditure is to encourage clubs to make such expenditure while the transfer levy principally is aimed at funding player pensions. Therefore, the Premier League argued that Everton’s expenditure is not directly attributable to academy players development but simply a transfer levy, and it also went on to argue that if this deduction were permissible, it would be impossible to complete the PSR calculation within the timescale set out in the rules. Ultimately, with regards to the transfer levy, the Commission agreed with the Premier League’s argument and rejected Everton’s proposed exclusion, thus the sum of £7.6 million had to be added as a loss in the PSR calculation.
In respect of pre-planning stadium interest, Everton agreed that it was able to capitalise interest payments from 1st July 2020 and thus expenditure it claimed to be excluded automatically fell from £4.1 million to £2.2 million. Everton argued that any interest attributable to stadium expenditure should be excluded from the PSR calculation, and pointed out that although no interest was charged on loans provided by Moshiri, interest was charged on commercial loans from Metro Bank PLC and Rights & Media Funding Limited. Furthermore, it went on to argue that it was not necessary for it to demonstrate that these commercial loans were used to fund stadium development in order to exclude interest charges from the PSR calculation, implying that on a proper application of Financial Reporting Standard (FRS) 102 it is sufficient that, if on a counter-factual analysis, it can show that those commercial loans (and thus the interest payable under them) would not have existed were it not for the stadium development. The club claimed that there was no need to look beyond the fact that Moshiri repaid the commercial, interest-bearing debt upon acquiring an interest, making it probable that he would have done something similar in the counter-factual scenario of there being no stadium development, with the consequence that Moshiri would have had additional funds available.
The Premier League advanced several different arguments in response to Everton’s case. In April 2022 it believed that the financing of the stadium development had been carried out with the use of commercial loans, and that the sum sought to be excluded from the PSR calculation had therefore been calculated by reference to interest charged on those loans. Therefore, the Premier League’s change of position was simply to correct a mistake that had been made because of misleading information provided by Everton.
In response to Everton’s case regarding the post-planning permission stadium interest, the Premier League submitted two main arguments:
1. Pre-planning permission stadium interest paid on commercial loans from Metro Bank PLC and Rights & Media Funding Limited could be excluded from the PSR calculation only if it fell within the terms of the 13th August 2021 agreement, i.e., only if these costs were incurred in respect of the stadium.
2. Pre-planning stadium charges had not been incurred in respect of the stadium because it had not been funded by commercial loans but by Moshiri’s interest-free loans. The Premier League also relied on the wording of commercial loan agreements with Metro Bank PLC and Rights & Media Funding Limited.
The Commission considered the Premier League correct in saying that the stadium was funded from Moshiri’s interest-free loans. It was considered that there was overwhelming evidence that the stadium was funded from loans made by Moshiri and not those loans by Metro Bank PLC and Rights & Media Funding Limited. Everton countered that the central question is whether the borrowing costs of the commercial loans from Metro Bank PLC and Rights & Media Funding Limited would have been incurred if the stadium development had not taken place.
Ultimately, the Commission concluded that there was material to support both parties’ cases but found that the outcome of the counter-factual analysis was too uncertain to find that if it had not been for the stadium, the Metro Bank PLC and Rights & Media Funding Limited borrowings would not have been incurred or would have been paid off if incurred. The Commission found it clear that commercial loans were advanced for working capital purposes.
Therefore, the pre-planning stadium interest on the commercial loans from Metro Bank PLC and Rights & Media Funding Limited cannot be excluded from the PSR calculation. As a result, the consequence of the findings relating to the pre-planning stadium interest and youth development is that Everton’s FY 2022 PSR calculation was a loss of £124.5 million, £19.5 million above the £105 million threshold.
Sanction principles
On 17th September 2018, the English Football League (EFL) approved sanctioning guidelines for breaches of its own Profitability and Sustainability (P&S) rules, with the starting point being a 12-point sanction that is then reduced to reflect quantum of breach as well as other mitigating factors. If losses show an improving trend, then further reductions can be made while increases can be made in the event of aggravating factors. However, the Premier League did not incorporate any such guidelines into its rules, with Rules W50 and W51 of its handbook allowing a Commission broad discretion regarding any sanctions imposed.
On 10th August 2023, the Premier League board adopted a sanction policy it deemed appropriate to PSR breaches: a fixed starting point of a six-point deduction, with a one-point increase for every £5 million by which the club exceeded the threshold. Further adjustments could be made in the event of aggravating or mitigating factors.
Ultimately, the Commission declined to adopt the Premier League’s proposed structured formula, on the basis that this would be inconsistent with its unrestricted powers provided for in rules W50 and W51.
The Premier League also made submissions as to the principles that should be applied by the Commission when determining the appropriate sanction, and it identified four separate heads:
1. Punishment
2. Vindicating compliant clubs
3. The sanction must act as a deterrent to the clubs that might be tempted to breach the PSR.
4. Protect the integrity of the game.
The Commission undoubtedly agrees that one of the primary purposes of the sanction is to punish the transgressing club. It also agrees that any PSR breach involves a significant overspend, which in this case relates to a loss exceeding £105 million. The Commission recognises that one of the purposes of the sanction is to provide a deterrent effect while not imposing anything disproportionate and recognises the need to protect the integrity of the game.
Aggravating/mitigating factors
The Premier League advanced factors it considered to have aggravated the breach, while Everton advanced factors it considered to have mitigated the breach. The burden of proof fell on the party asserting the aggravating or mitigating factor, based on balance of probabilities.
Aggravating factors
The Premier League advanced 4 key factors it considered to have aggravated Everton’s PSR breach:
1. Overspend despite repeated warnings: in relation to this, the Commission felt that while Everton may have taken unwise risks, it did so in the belief of achieving PSR compliance and thus deemed this to not be a case of a deliberate breach. Therefore, the Commission dismissed this as an aggravating factor.
2. Extent of the breach of the PSR threshold: the Commission considered this as an important indicator of level of culpability but dismissed this as an aggravating factor because of double-counting.
3. Misleading the Premier League about stadium interest: the Premier League complained that Everton deliberately misled it about the source of funds used for the stadium development, as well as complaining that Everton failed to disclose the fact it was in discussions with Rights & Media Funding Limited to secure a waiver of a breach of the terms of its loan agreement, arguing that on this point, the club must have known of this fact and thus must have consciously chosen not to disclose it. Rule B.15 of the Premier League refers to the obligation of clubs, officials and directors to act in good faith in all matters and transactions relating to the League. The Commission felt that Everton misled the Premier League in relation to the stadium interest for the PSR calculation. The Premier League explicitly did not allege dishonesty, and thus, the Commission ruled that Everton did not consciously intend to circumvent the rules but that the club clearly breached rule B.15, and so considered the fact that Everton misled the Premier League over stadium interest as an aggravating factor.
4. Misleading the Premier League about the intention to sell Player Y: in its FY 2022 submission Everton identified player Y as being one player who they intended to sell but were unable to do so, but the Premier League argued that this was false. The Commission hesitated over this issue, but ultimately concluded that the Premier League did not prove its case over this issue and rejected this as an aggravating factor.
Mitigating factors
Everton, meanwhile, advanced factors it considered to have mitigated the breach:
1. Post-planning permission interest: Everton argued that substantial amounts of interest incurred in relation to the stadium development could have been capitalised after planning permission had been obtained, and that could be considered as good expenditure. The Commission considered this argument to be based on a false premise, namely that post-planning permission interest could properly have been capitalised and thus be excluded from the PSR calculation. This issue was already determined against Everton in relation to the pre-planning stadium interest, thus post-planning permission interest also could not have been capitalised. Ultimately, on this issue the Commission concluded that the post-planning permission interest claim could not stand as a mitigating factor.
2. Positive trend: Everton argued that its PSR calculation shows a downward trend for losses, pointing to the EFL’s P&S rules that allow credit for such a downward trend. The Premier League on the flipside firstly disputed Everton’s reliance on the EFL P&S rules and secondly argued that Everton could only show a positive trend by averaging FY 2020 and FY 2021, while thirdly arguing that any positive trend was not continued into FY 2023. Ultimately, the Commission considered Everton to have put forward the better argument on this issue and considered that a consistent improving trend is something that can be credited as a matter of principle. Therefore, the Commission accepted that an improving trend could be considered as a mitigating factor to a limited extent.
3. Player X: Everton maintained its entitlement to credit for not pursuing an economically viable claim against player X. The Commission had difficulty with their argument on 3 counts: firstly, as a matter of principle it did not see why this should stand as mitigation. Secondly, there was no evidence of his psychological state when a decision was made not to pursue the claim. Thirdly, the value of £10 million on the claim put by Everton was speculative as it may have faced difficulties and there was no evidence that player X would have been able to meet whatever judgment might have been obtained.Therefore, the Commission dismissed the claim, citing that circumstances around this claim are the sort of events that occur in management of football clubs where a player’s value can be lost for various reasons and thus it ruled that this claim could not stand as mitigation.
4. Ukraine: Everton claimed that the Russian invasion of Ukraine helped create mitigating factors. The club had the benefit of an option agreement which would have entitled USM Services Limited to call down a Naming Rights Agreement worth £10 million per annum for Everton, with effect from the 2025/26 season. Everton claimed that it had been in negotiation with USM Services Limited to bring the agreement into force early, producing an accelerated annual receipt of £10 million from FY 2022. Mitigation was claimed because of the possibility of any agreement (none of which had yet been reached) cased upon imposition of sanctions on Russian entities by the UK government following the Russian invasion of Ukraine.
The Commission agreed with the Premier League that this could not be considered a mitigating factor, firstly due to uncertainties about an agreement being reached, and secondly the loss of a proposed agreement, even when that agreement might have been thought likely, is a type of event businesses experience, and thus not something that can constitute a mitigating factor. In addition, Everton put forward an argument that the invasion of Ukraine increased stadium construction costs and made it harder for them to secure the senior debt it was seeking as a mitigating factor, but the Commission dismissed this as well.
5. COVID impact on player market: Everton football director Marcel Brands had placed values on eight players who had been targeted for sale, producing a total value more than £80 million. In the event, sales did not take place as projected, with Everton arguing that this was down to the impact of COVID-19. The Commission ruled that this claimed mitigation could not stand, for three reasons. Firstly, the values that were put on the players by Mr Brands were no more than just target prices. Secondly, the ability to sell players is inherently uncertain as events and market forces may operate against a selling club. Thirdly, these are the types of events that a club is expected to have in mind when planning its expenditure.
6. Transparency and co-operation with Premier League: Everton claimed that it behaved openly and responsibly in its dealings with the Premier League in relation to its PSR challenges which should stand to its credit. The Commission recognised that Everton engaged extensively with the Premier League in relation to problems caused by its inability to capitalise pre-planning expenditure but considered that no feature of Everton’s dealings with the Premier League was of an exceptional nature to be considered as a mitigating factor and thus this factor was dismissed.
Nature of sanction
The Premier League argued that the only appropriate sanction was a sporting sanction in the form of points deduction. Everton argued that only a financial penalty was necessary, or a transfer ban if any form of sporting sanction were to be imposed.
The Commission agreed with the Premier League’s position as a points deduction satisfies the requirements of punishment, deterrence, vindication of compliant clubs, and protection of integrity of the sport.
Quantification of sanction
The size of the sanction was determined by Everton’s culpability, with no fixed formula being applied and the extent of culpability being determined by the Commission.
The Commission felt that Everton’s PSR difficulties were not attributable to stadium development costs but the fact it overspent and because it finished lower than projected in the League in FY 2022. Ultimately, it concluded that Everton’s PSR position is self-inflicted, as it is the club’s responsibility to ensure it complies with the PSR regime. The amount by which Everton exceeded the threshold was deemed significant (£19.5 million given a £105 million allowance), and thus the consequence is that Everton’s culpability is considerable.
Conclusion
Ultimately, the Commission concluded by saying that Everton failed to manage its finances so as to operate within the £105 million threshold and mismanagement led to the breach, which was deemed and thus a significant penalty was applied, that of an immediate 10-point deduction.
Everton lodged an appeal against this decision on 1st December 2023, the outcome of which is still to be determined.