An independent Commission has imposed an immediate deduction of 10 points on Everton FC for a breach of the Premier League’s Profitability and Sustainability Rules (PSRs).
The Premier League issued a complaint against the Club and referred the case to an independent Commission earlier this year. During the proceedings, the Club admitted it was in breach of the PSRs for the period ending Season 2021/22 but the extent of the breach remained in dispute.
Following a five-day hearing last month, the Commission determined that Everton FC’s PSR Calculation for the relevant period resulted in a loss of £124.5million, as contended by the Premier League, which exceeded the threshold of £105million permitted under the PSRs. The Commission concluded that a sporting sanction in the form of a 10-point deduction should be imposed. That sanction has immediate effect.
Click here to read the independent Commission’s full written reasons.
Click here to read a further decision by the Chair of the Commission, dated 9 May 2023, regarding applications from Leicester City FC, Burnley FC, Southampton FC, Leeds United FC and Nottingham Forest FC.
Commissions are independent of the Premier League and member Clubs. The members of the Commission were appointed by the independent Chair of the Premier League Judicial Panel, in accordance with Premier League Rules W.19, W.20 and W.26.
Profitability and Sustainability Rules (see Premier League Handbook Section E)
- All Premier League Clubs are assessed for their compliance with the Profitability and Sustainability Rules each year.
- Compliance is assessed by reference to the Club’s PSR Calculation, which is the aggregate of its Adjusted Earnings Before Tax for the relevant assessment period.
- A Club’s Adjusted Earnings Before Tax figure for each season takes account of its profit or loss after depreciation and interest, but before tax, and then applies a series of ‘add backs’.
- These ‘add backs’ are costs that the Premier League and its Clubs recognise to be in the general interest of the club and football e.g. investment in infrastructure, community, women’s football, youth development and depreciation of tangible fixed assets. Exceptionally, in relation to years 2019/20, 2020/21 and 2021/22 COVID-19 costs were also permitted to be included as ‘add backs’.
- Ordinarily, a Club’s PSR Calculation is the aggregate of its Adjusted Earnings Before Tax over a three-year period. Following amendments made to the PSRs during COVID-19, the relevant figures for Seasons 2019/20 and 2020/21 are now averaged. In the present case, therefore, the relevant period included Season 2021/2022, the average Adjusted Earnings Before Tax for Seasons 2020/21 and 2019/20 and Season 2018/19.
- A Club will be in breach of the PSRs if its PSR Calculation over the relevant period results in a loss in excess of £105 million (with that threshold reduced by £22 million for each season that the relevant Club has been in the Championship during the relevant period).
Premier League investigations and independent Commissions
- The Premier League Board have the power to investigate any suspected or alleged breach of Premier League Rules.
- Where, following the conclusion of an investigation or otherwise, the Board believes that there is a suspicion or allegation of a Rule breach, it has a number of options available to it. One of these options is to issue a written compliant and refer the matter to a Commission.
- The League has access to an independent Judicial Panel, comprising a number of legal, financial and other experts. Members of the Judicial Panel are appointed by its independent Chair, Murray Rosen KC, an experienced barrister. It is the Chair who selects members of the Judicial Panel to sit on Commissions, which are independent of the Premier League.
- All proceedings are confidential and heard in private.
- There are a range of sanctions available to the Commission which include fines, points deductions and other sporting sanctions.
- At the conclusion of proceedings, a Commission’s final decision will be published on the Premier League website.
- For further information on the disciplinary process, please see Section W of the Premier League Handbook.