February 28, 2024
Everton deducted 10 points for breach of Premier League financial rules

Within Everton’s indignant statement in response to being deducted 10 points for breaching the Premier League’s spending rules, there is a line that stands out.

“The club will monitor with great interest the decisions made in any other cases concerning the Premier League’s Profit and Sustainability Rules,” Everton declare. For the phrase “any other cases” they could easily insert the words: Manchester City and, potentially in the future, Chelsea.

 

By punishing Everton so apparently severely through the independent commission, the Premier League − which was pushing for a 12-point deduction − has not just bared its teeth, but sunk them deep into one of its member clubs.

 

It has also shown that we are now in the realm of “sporting sanction” where guilty clubs can expect points being lost rather than fines being levied. In fairness to the Premier League, it had issued details of this in its updated handbook. All of a sudden, this is all far more serious and a far greater punishment.

 

Dealing with Everton obviously brings back into sharper focus the progress of the Premier League’s 115 charges made against City. And those are 114 more charges than Everton faced although, obviously, they vary in gravity.

 

So what might now constitute an appropriate sanction for City if they are found guilty of all of those charges given the vast scale of the alleged offences and the nine-year period they cover? Even if only a fraction of the case against them is proven, how will they now be dealt with given what Everton face?

 

It would not be too alarmist to suggest that relegation from the Premier League is a very real possibility for City if the charges are proven. The independent commission has unlimited powers to punish, and although there is no tariff or sliding scale, what happens to City will be benchmarked against Everton by all of us.

After all, City are accused of 50 breaches of providing inaccurate financial information, eight breaches in relation to manager remuneration from 2009-03, 12 breaches in relation to player remuneration from 2010 to 2015, five breaches linked to UEFA financial regulations, 25 profitability and sustainability breaches and 30 of failing to co-operate with the Premier League investigation.

Part of the mitigation Everton tried to put forward was that they argued they co-operated fully.

In a nutshell, City are accused of misrepresenting their accounts for almost a decade.

 

That would appear to be quite some charge sheet, which partly explains why their case is taking far longer to deal with than Everton’s, whose breaches took place over three seasons. Even so, there were 40,000 documents sifted through by the commission, which admitted: “This is a complicated case.” So goodness knows how much paperwork will have to be handled with City.

 

Like Everton, City vehemently deny any wrongdoing and it would be a serious and unjust mistake − even if it has already happened in the court of public opinion − to merge the two cases. City claim there is a “comprehensive body of irrefutable evidence” to support them and they may successfully defend themselves.

They are certainly confident of doing so. Obviously, we have to wait to see what that evidence is when the commission’s work is done and its findings are published. and not rush to judgement.

 

But the punishment that has been meted out to Everton cannot be ignored by City or, indeed, by Chelsea, who are the subject of scrutiny from the Premier League and Football Association over fresh allegations of hidden payments during the Roman Abramovich era.

Chelsea will hope that the fact they have self-reported will head off a points deduction, and instead, be heavily fined and maybe face a transfer ban (hence ring-fencing £100 million when the club were bought), but they must be shifting nervously post-Everton.

As Simon Leaf, partner and head of sport at the law firm Mishcon de Reya, commented, the Everton judgement will “cause shock waves − particularly in the boardrooms of Chelsea and Manchester City”.

City, and presumably Chelsea, would also fight it through the courts if found guilty. City have already shown an appetite with UEFA − overturning a two-year ban through the Court of Arbitration for Sport − and the Premier League to take the most robust legal route possible.

Even points deduction or relegation, if guilty, might not be the end of it for other reasons, also. Everton face the nightmare scenario of rival clubs suing them for tens of millions of pounds.

 

Leeds United, Leicester City, Southampton and Burnley were all relegated during the seasons that Everton were breaking the rules − so what happens if City and Chelsea are similarly punished?

 

How many clubs will argue they missed out on trophies, on European places, on Premier League merit money for where they finished in the table, on the financial bonuses and commercial revenue as well as the sporting glory, and how can that be quantified over such a long time? The Premier League would be stretched to almost breaking point trying to work its way through that.

 

The stakes could barely be higher for the future of English football. It will not be just Everton who are carefully monitoring what happens next with City and then Chelsea.

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