Everton was handed the biggest sporting sanction in the Premier League’s 31-year history on Friday for breaching the competition’s financial rules, with a deduction of 10 points dropping the team into next-to-last place in the standings and threatening its 70-year status in the top division.
The club was found by an independent commission to have made a loss of 124.5 million pounds ($155 million) over three years up to the end of the 2021-22 season. The league’s profit and financial sustainability rules allow clubs to lose a maximum of 105 million pounds ($130 million) over a three-year period or face sanctions.
The punishment means Everton falls from 14 points to four with immediate effect. The team is now on the same number of points as last-place Burnley, with Everton only higher because of its superior goal difference.
Everton said it was “shocked and disappointed” by the ruling and will be appealing.
“The club believes that the commission has imposed a wholly disproportionate and unjust sporting sanction,” Everton said.
“The club,” it added, “does not recognize the finding that it failed to act with the utmost good faith … Both the harshness and severity of the sanction imposed by the commission are neither a fair nor a reasonable reflection of the evidence submitted.”
Everton, which is one of England’s most storied teams as a nine-time league champion and a top-division club since 1954, said it would be monitoring “with great interest” decisions made in other cases concerning the league’s financial rules.
Both Manchester City and reportedly Chelsea have been accused by the league of various breaches of regulations. City, the defending English and European champion, was accused by the league in February of providing misleading information about its finances from 2009-18, covering 115 alleged breaches.
Two clubs — Middlesbrough and Portsmouth — have received points deductions in the Premier League since the competition’s inaugural season in 1992 and they both wound up getting relegated.
Middlesbrough got a three-point penalty for pulling out of a match against Blackburn in the 1996-97 season. Portsmouth was deducted nine points in 2010 after going into administration — a form of bankruptcy protection.
The Everton case could run and run. Aside from the club’s own appeal, the five rival teams who made a complaint against Everton for alleged bending of financial rules — Leeds, Nottingham Forest, Southampton, Leicester and Burnley — were notified in May that if it was upheld, they would have 28 days to inform the commission they wished to pursue a claim of compensation.
Leeds, Southampton and Leicester are no longer in the Premier League.
Everton avoided relegation by four points in the 2021-22 season and by two points — and on the final day of the campaign — last season.
The team managed by Sean Dyche will go into its next game, against Manchester United on Nov. 26, two points from safety. Relegation was looking an unlikely prospect for Everton this season, with Dyche having finally stamped his imprint on the team and guided it to four wins in its last seven league matches, but now there will be renewed concerns about its survival hopes.
The league referred Everton to an independent commission in March because of the alleged breach of financial rules. A five-day hearing was held last month and the commission has now published its verdict, saying its overspending was “the result of Everton irresponsibly taking a chance that things would turn out positively.”
“The cause of Everton’s 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 … causing a loss of expected income of 21 million pounds ($26 million),” the commission said.
“The reality,” the commission added, “is that Everton failed to manage its finances so as to operate within the generous threshold” of $130 million.
Everton’s majority owner is British-Iranian billionaire Farhad Moshiri, a business partner of Russian metals tycoon Alisher Usmanov. Everton announced in March 2022 that it had halted its major sponsorship with companies belonging to Usmanov after he was sanctioned by the European Union in the wake of Russia’s invasion of Ukraine.
Moshiri bought Everton in 2016 but has been looking to sell the club in recent months.
The commission said Moshiri came to Everton “with great aspirations” and “wanted to transform the club into one of the top teams in the Premier League, regularly playing in Europe.” Its last major trophy was the FA Cup in 1995.
Moshiri wanted to build a new stadium at Bramley-Moore Dock — it is due to open for the start of the 2025-26 season, at an estimated cost of 760 million pounds ($945 million) — and those joint ambitions were described by interim CEO James Maryniak as a “challenging plan,” the commission said.
Moshiri, the commission said, has invested around 750 million pounds ($930 million) during his tenure at Everton, with his wealth a factor in the commission’s decision to punish the club with a sporting sanction rather than a financial one.
“A financial penalty for a club that enjoys the support of a wealthy owner is not a sufficient penalty,” it said. “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.”
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