Everton has incurred a two-point deduction due to a second violation of Premier League financial regulations.
The Profit and Sustainability Rules (PSR) allow clubs to incur losses of up to £105m over a three-year period. An independent commission discovered that Everton exceeded this limit by £16.6m for the period up to 2022-23.
Consequently, they have slipped to 16th place in the league standings and are now just two points clear of the relegation zone.
Earlier this year, Everton had a 10-point deduction reduced to six following an appeal for the period up to 2021-22.
The club has announced its intention to challenge this latest decision.
There is a possibility that Everton may face an additional points deduction related to interest expenses linked to the construction of their new stadium at Bramley-Moore Dock. However, this matter is unlikely to be resolved before the conclusion of the current season.
The independent commission, in its report, revealed that the Premier League had initially requested a five-point deduction for Everton. Ultimately, the commission determined that any breach of the PSR warrants a three-point deduction, with an extra two points imposed due to Everton’s significant breach of £16.6m, which exceeds the £105m threshold by 15.8%.
The latest deduction coincides with a period of considerable uncertainty at Everton. The financial report for the 2022-23 season, released on 31 March, revealed losses amounting to £89.1m.
/cdn.vox-cdn.com/uploads/chorus_image/image/73263772/1990225685.0.jpg "Officially, Everton was deducted 2 more points for violating financial fairness 3")
In September, Farhad Moshiri, the club’s owner, reached an agreement to sell his 94% ownership to American investment firm 777 Partners. The acquisition is currently undergoing regulatory approval, pending the Premier League’s authorization.
Furthermore, Everton is in the midst of constructing a new stadium at Bramley-Moore Dock along the River Mersey, scheduled for completion in 2024.
During his testimony to the independent commission, Kevin Thelwell, Everton’s director of football, mentioned the club’s shift towards a more sustainable recruitment strategy, departing from its previous business model. However, he acknowledged the challenges of steering such a large organization in a new direction.