Everton drop into relegation zone with 10-point deduction for breaking rules

Everton have been deducted 10 points for breaches of profit and sustainability rules, the Premier League has said.

The penalty, effective immediately, leaves the club with four points and plunges them into the relegation zone.

The Merseyside club said it was “shocked and disappointed” by the “wholly disproportionate” ruling and plans to appeal.

It comes after the league referred Everton in March to an independent commission after reviewing the financial records of all top-flight clubs for the 2021-22 season.

According to the rules, clubs can sustain losses of up to £105m in three years or potentially face penalties.

However, Everton FC reported losses of £124.5m for the relevant period.

Everton FC said in a statement after the points deduction: “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.”

What rules were broken – and what about other clubs?

The Premier League’s financial rules are designed to ensure clubs “operate within their financial means”.

They were introduced following concerns that teams were spending far more on players than they were earning in ticket sales, merchandise and other income – sparking fears some could build up unsustainable levels of debt and go bust.

The rules include a requirement that teams must not lose more than £105m over a three-year period.

However, during the 2021/22 season, investigators ruled that Everton lost £124.5m – although the club claims there were mitigating factors.

Three clubs have previously been docked points in the league. Middlesbrough were deducted three for failing to fulfil a fixture against Blackburn in 1996/97, and Portsmouth were stripped of nine after going into administration in March 2010.

Tottenham were handed a 12-point deduction before the 1994/95 season for financial irregularities, but the punishment was later revoked.

The only other current team to have been charged with breaking the rules is Manchester City, which was accused of 115 breaches in February. However the case is still ongoing amid reported wrangling between legal teams behind closed doors. It is unclear when it will be resolved.

In August, the Premier League also announced it had launched an investigation into Chelsea over their finances. However, the club has not been charged with breaking any rules and that case is also ongoing.

Everton said 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 added that it would also “monitor with great interest the decisions made in any other cases concerning the Premier League’s profit and sustainability rules”.

Everton said they could not comment any further until the appeal process was over.

Steve Rotheram, the mayor of Liverpool City Region, said the points deduction was an “excessive and grossly unfair punishment”.

Writing on X, formerly Twitter, he said: “I’ll be supporting the club in their appeal and writing to the Premier League to ask them to rescind it.

“This is about fairness, not partisan rivalry.”

The Premier League said in a statement: “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.”