Everton have been hit with an unprecedented 10-point penalty after being found to have “taken chances” with the Premier League’s financial rules.
An independent commission found the club’s desire to improve their on-pitch performance had resulted in them acting “irresponsibly” and exceeding permitted losses under the league’s profitability and sustainability rules (PSR).
The points deduction drops Everton to 19th in the table and leaves major question marks over whether a sale of the club by current owner Farhad Moshiri to an American investment firm, 777 Partners, will proceed.
The club immediately indicated their intention to appeal against the sanction. It is understood the appeal will be heard during the course of the current season.
Everton could also now face compensation claims against them over the case.
The Premier League published a commission judgement from May which granted five clubs – Leeds, Nottingham Forest, Southampton, Leicester and Burnley – 28 days from Friday to inform the commission of their intention to pursue a compensation claim.
None of those clubs have so far commented on this matter.
The Premier League’s PSR permit losses of £105million over a three-year period. Everton’s losses up to 2021-22 were found to be £124.5million, exceeding the limit by £19.5million even accounting for allowances made for the Covid-19 pandemic.
The club put forward various items they felt should be excluded from the PSR calculation, including interest costs related to the construction of their new stadium at Bramley-Moore Dock, the portion of the club’s transfer levy related to youth development and the £10m lost on the club’s decision not to seek damages against a player whose contract was terminated in 2021.
Everton also argued that a depressed summer transfer market in 2020 owing to Covid-19 reduced the revenue they would have earned from player sales. They also said they had lost out on a £200m stadium naming rights deal with USM as a result of Russia’s invasion of Ukraine and the subsequent sanctions imposed by the British Government. USM is a conglomerate whose single largest stakeholder is Russian billionaire Alisher Usmanov.
However, the commission concluded: “The cause of Everton’s PSR difficulties was the fact that it overspent (largely on its purchase of new players and its inability to sell other players), and because it finished lower in the league than it had projected in FY 2022 (16th against the projected 6th – causing a loss of expected income of c.£21 million).
“Everton’s understandable desire to improve its on-pitch performance (to replace the non-existent midfield, as Mr Moshiri put it in evidence) led it to take chances with its PSR position: those chances resulted in it exceeding the £105 million threshold by £19.5 million.
“The position that Everton finds itself in is of its own making – it is Everton’s responsibility to ensure that it complies with the PSR regime. The excess over the threshold is significant. The consequence is that Everton’s culpability is great.
“We take into account the fact that Everton’s PSR trend over the relevant four years is positive, but cannot ignore the fact that the failure to comply with the PSR regime was the result of Everton irresponsibly taking a chance that things would turn out positively.
“Further, Everton was less than frank in its dealings with the Premier League over the stadium interest issue.
“The reality is that Everton failed to manage its finances so as to operate within the generous threshold of £105m. Its mismanagement led to that threshold being exceeded by £19.5million.
“This was a serious breach that requires a significant penalty.”
The commission concluded that a sporting sanction was the only option for a club owned by a billionaire like Moshiri.
“A financial penalty for a club that enjoys the support of a wealthy owner is not a sufficient penalty,” the commission’s written reasons stated.
“We agree with the Premier League that the requirements of punishment, deterrence, vindication of compliant clubs, and the protection of the integrity of the sport demand a sporting sanction in the form of a points deduction. The issue is not the form of sanction, but its extent.”
The written reasons show Everton’s position was that any sanction imposed by the commission should be financial rather than sporting in nature, but said if it had to be a sporting sanction then a transfer ban would be more appropriate than a points deduction.
The club said in a statement: “Everton Football Club is both shocked and disappointed by the ruling of the Premier League’s commission.
“The club believes that the commission has imposed a wholly disproportionate and unjust sporting sanction.
“The club has already communicated its intention to appeal the decision to the Premier League. The appeal process will now commence and the club’s case will be heard by an Appeal Board appointed pursuant to the Premier League’s rules in due course.
“Everton maintains that it has been open and transparent in the information it has provided to the Premier League and that it has always respected the integrity of the process.
“The club does not recognise the finding that it failed to act with the utmost good faith and it does not understand this to have been an allegation made by the Premier League during the course of proceedings.
“Both the harshness and severity of the sanction imposed by the commission are neither a fair nor a reasonable reflection of the evidence submitted.
“The club will also monitor with great interest the decisions made in any other cases concerning the Premier League’s Profit and Sustainability Rules.”
Portsmouth and Middlesbrough are the only other clubs to have been docked points in Premier League history. Pompey were hit with a 10-point sanction in March 2010 after entering administration while Boro’s three-point penalty in January 1997 related to a short-notice match postponement the previous month. Both clubs were relegated at the end of the season.
Terzic: Dortmund have made up for last season's Bundesliga failure
Borussia Dortmund's 2-0 aggregate win over Paris Saint-Germain made amends for last season's disappointing Bundesliga finale, coach Edin Terzic said.
Dortmund showed great composure to reach their third Champions League final and first since 2013 after Mats Hummels' second-half goal earned a 1-0 victory on the night in Paris on Tuesday.
Terzic went to the Dortmund fans after the game and said he felt he had to make up for last season's failure to win the Bundesliga title after slipping up on the very last day.
"Last season, we lost the championship at home on the last matchday. I'm happy that we can now give something back to the fans," Terzic said, remembering how Bayern Munich snatched the Bundesliga title from Dortmund on goal difference.
"[Going to the fans] was a very emotional moment, a beautiful moment. We wished it for last season's last matchday. But today we could pay something back, keep them dreaming and now we'll do everything to bring the trophy back home," he said.
PSG hit the woodwork four times but failed to find the net as Kylian Mbappe, widely expected to leave at the end of the season, was a shadow of his usual brilliant self.
Dortmund will now meet either 14-time European champions Real Madrid or their Bundesliga rivals Bayern in the June 1 showdown at Wembley.
"Before the first game against PSV, we talked for the first time about how short the journey to London could be," Terzic said.
"Back then, many were still puzzled. We've grown with every game and eventually realised that we could be the team that surprises everyone in the end. Now I'm very happy to be in the final with my team."
Dortmund have played a roller-coaster Bundesliga season and sit in fifth place with two games left.
"That plays no role," Terzic said. "In 2013 when Dortmund were in the Champions League final they were 25 points behind in the league and in 1997 when they won it they were also not doing well.
"The season had highs and lows but our season is still not finished."
'I don't see why we shouldn't win' - BVB hero Hummels bullish ahead of Champions League final
Mats Hummels sees no reason why Borussia Dortmund cannot go on and win the Champions League following their hard-earned semi-final victory over Paris Saint-Germain.
The Black and Yellow are through to the final of Europe's premier club competition for only the third time after sealing a 2-0 aggregate over the reigning Ligue 1 champions, who struck the woodwork six times across both legs.
After Niclas Fullkrug settled last week's first leg at Signal Iduna Park, Hummels' second-half header was the difference in the return at Parc des Princes, where Edin Terzic's side produced another defensive masterclass as they claimed their sixth clean sheet in this season's competition.
Dortmund, who lifted the trophy 27 years ago, will face either Real Madrid or Bayern Munich in the final at Wembley on June 1, and Hummels is confident he and his team-mates can go all the way.
"I've scored far too few Champions League goals in my career, just five," he told DAZN via Uefa.com. "Now is a good time to add to that number.
"Since the second match of the group stage, we've believed that we could prevail in every game - and I don't see why we shouldn't win at Wembley now.
"We remained active today and were able to take so much pace out of the game and atmosphere out of the stadium. That was our recipe for success today."
Hummels was part of the Dortmund side beaten 2-1 by Bayern in their most recent Champions League final appearance in 2013, along with Marco Reus.
The veteran midfielder announced last week that he would be leaving the club at the end of this season, and is thrilled to have one more crack at landing the biggest trophy in European club football.
"[It is] indescribable," he told DAZN. "After more than 10 years, I am in the final with Borussia again. Ousmane [Dembele] and Achraf [Hakimi] brought a tremendous amount of pace, and we suffered a lot.
"How we won the game, no-one will ask tomorrow. Shots against the post won’t matter tomorrow. What counts is that Borussia Dortmund are in the final again. Nobody expected this. It's just incredible."
Meanwhile Terzic, who saw his side surrender the Bundesliga title on the final day of last season, saluted the strides his players have made as the competition has progressed.
"Before the first game against PSV [in the round of 16], we talked for the first time about how short the journey to London could be," he said. "Back then, many were still puzzled. Last season, we lost the championship at home on the last matchday.
"I'm happy that we can now give something back to the fans. We've grown with every game and eventually realised that we could be the team that surprises everyone in the end. Now, I'm very happy to be in the final with my team."
'We weren't efficient' - Marquinhos bemoans PSG profligacy after Champions League exit
Marquinhos believes Paris Saint-Germain paid for their profligacy after suffering Champions League semi-final heartbreak against Borussia Dortmund.
Mats Hummels' second-half header from a Julian Brandt corner - the only goal at Parc des Princes - wrapped up a 2-0 aggregate victory for the Bundesliga side, who advanced to their third final and first since 2013.
Meanwhile, PSG's wait to land the elusive European crown goes on, despite a whopping 44 shots across the two legs, while they also struck the woodwork on six occasions - their overall tally of 14 the most recorded by a team during a single campaign.
Indeed, Luis Enrique's side failed to find the net in a home match for the first time since their 0-0 draw with Lorient in their first Ligue 1 match of the season, as their hopes of completing the treble vanished for another year.
"We lacked efficiency," Marquinhos told Canal+. "They scored two goals from corners and a through ball that we had worked on. We had to defend better. These are small details.
"We created chances, a lot more than them. We weren't efficient. They were efficient, they scored two goals and won both matches."
But despite the disappointment, the PSG skipper urged his team-mates to focus on the positives from their run to the semi-finals.
They recovered from a disappointing 4-1 defeat against Newcastle United to finish second behind Dortmund in Group F, before overturning a 4-2 aggregate deficit to deny Barcelona in the quarter-finals.
"There are a lot of things to take away from this competition," Marquinhos added. "At the beginning of the season, no one believed that we would get this far. We've overcome a lot of obstacles, we shouldn't throw everything away now just because we're eliminated.
"You have to remember that it's a new team, with a new coach. There are some positives to bring back for next season. We wanted to go to Wembley for the fans and our families.
"You have to stay calm after the elimination. It's very hard. We've come very close. We had to win tonight and be more efficient."
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