Everton face points deduction threat after Premier League FFP charge

Everton are facing the threat of a points deduction or heavy fine after being charged by the Premier League with breaching financial rules.

After recording mammoth losses of £371.8 million over three years, Everton are alleged to have broken the League's Profitability and Sustainability rules (previously known as Financial Fair Play) in the period ending for the 2021-22 season and are in danger of punishment.

Premier League clubs are allowed to lose a maximum of £105 million over three years but Everton's big spending in the transfer window under owner Farhad Moshiri means they could face a number of sanctions.

Potential punishments include a points deduction, heavy fine and spending restrictions, but the Premier League's move to charge Everton is regarded as significant. Everton are currently two points above the relegation zone but a deduction this season, if it was to be applied, would almost certainly send them down to the Championship.

Towards the end of last season Burnley - who were relegated to the second tier  - and Leeds both indicated they were prepared to take legal action against the league and Everton if breaches were proven.

Around £700 million has been spent by Everton on more than 50 players since Moshiri's takeover seven years ago, including high-profile arrivals Amadou Onana (£31.5m), Alex Iwobi (£28m) and Yerry Mina (£27m).
They are due to move to a new stadium at Bramley Moore Dock in 2025 although it is understood there have been difficulties in funding the project.

Moshiri and his long-time business partner Alisher Usmanov, a Kremlin-friendly Russian businessman, both held a stake in USM Holdings - with Usmanov a large minority shareholder and Moshiri holding a stake of 10 per cent, which he reduced to five per cent -  until Moshiri ended his interest with the firm after Russia attacked Ukraine.

After taking over at Goodison, Moshiri used his USM connections to arrange the naming rights to the club's Finch Farm training ground and matchday sponsorship at Goodison Park, as well as first option on naming rights at Bramley Moore Dock. Those deals ended when Usmanov was sanctioned by the Government because of his links to the Russian government.

Everton have been working formally with the league in a bid to meet regulations but the club will now be referred to an independent commission. There is no time frame yet on when the case will be heard, but it is thought unlikely that any decision will be made this season.

It is understood Everton’s losses cover four seasons from 2018-19 to 2021-22, with the two campaigns affected by Covid-19 put together and averaged out. Everton announced losses of £120.9 million last March. There were also reported losses in the three years before that – the highest being £139.9 million – and £13.1 million in 2018.

Everton said in a statement last night it was "disappointed" to hear of yesterday's developments.

It added: "The Club strongly contests the allegation of non-compliance and together with its independent team of experts is entirely confident that it remains compliant with all financial rules and regulations.

"Everton is prepared to robustly defend its position to the commission. The Club has, over several years, provided information to the Premier League in an open and transparent manner and has consciously chosen to act with the utmost good faith at all times. The Club will not be making any further comment at this time.

The Premier League's statement read: "In accordance with Premier League Rule W.82.1, the Premier League confirms that it has today referred an alleged breach of the League’s Profitability and Sustainability Rules by Everton Football Club to a Commission under Premier League Rule W.3.4. The assessment period for which it is alleged that the Club is in breach is the period ending Season 2021/22.

"Commissions are independent of the Premier League and member clubs. The members of the Commission will be appointed by the independent Chair of the Premier League Judicial Panel, in accordance with Premier League Rules W.19, W.20 and W.26.

"The proceedings before the Commission will, in accordance with Premier League Rule W.82, be confidential and heard in private. Under Premier League Rule W.82.2, the Commission’s final award will be published on the Premier League’s website. The League will be making no further comment until that time."

This article was amended on March 27 to clarify Farhad Moshiri and Alisher Usmanov's shareholding in USM Holdings