Everton's Premier League Points Deduction

I Am The Law

Everton have been found guilty of breaching the Premier League’s Profitability and Sustainability Rules (PSR) and been hit with a 10-point deduction that has sent them into the relegation zone.

Although many had expected such a verdict, the magnitude of the punishment, which is the largest points deduction in the Premier League’s history, came as a shock. Indeed, Everton described this as “wholly disproportionate and unjust”.

This blog will look at why Everton have struggled to meet the PSR targets, which are also known as Financial Fair Play (or FFP), then reviews the workings of the Independent Commission in detail.

Everton’s Strategy

Everton owner Farhad Moshiri’s arrived at Goodison Park with a grand vision. As the Commission said, “He wanted to transform the club into one of the top teams in the Premier League, regularly playing in Europe. And he wished to provide the club with a new, state of the art, stadium.”

That was obviously going to take a substantial amount of money, which was duly spent on the squad and invested in the new stadium at Bramley-Moore Dock. Moshiri saw this as “all part of a normal investment cycle in a football club following a change of ownership”, analogous to Manchester City’s “master plan”, when the shareholders also pumped in huge sums in order to deliver success.

Large Losses

However, initially this investment simply delivered hefty financial losses, amounting to £417m in the four years from 2018/19 to 2021/22. In fact, the club has not posted a profit since six years ago 2016/17. The only small crumb of comfort is that the loss has reduced two years in a row from the £140m peak in 2019/20.

In fairness, almost all football clubs lost money over this period, due to the adverse impact of the COVID pandemic, but Everton’s £417 deficit was by some distance the worst in the Premier League, around £150m more than the next highest loss, namely Arsenal with £259m.

This poor financial result is important, as this covered the period that was the starting point for the Premier League’s PSR calculation that resulted in Everton being charged.