Everton risks a second points penalty in a new financial case

Everton, who have fallen in the Premier League table after a record 10-point deduction in November, face the prospect of a second penalty for further breaches of the competition's financial rules.

Everton confirmed the new case in a statement on Monday, as did a second team, Nottingham Forest, which was accused of its own breaches of the league's so-called profit and sustainability rules. The rules are designed to prevent teams from overspending and risking their financial futures to maintain their place in the Premier League, one of the world's richest domestic sporting leagues.

For Everton, a founding member of the Premier League now on the brink of collapse, the new charges could not have come at a worse time. A deal to sell the club to US private equity firm 777 Partners remains in doubt months after the club's current owner, British-Iranian businessman Farhad Moshiri, announced the sale last year.

It also significantly increases the risk of Everton and Forest suffering a financially disastrous relegation from the Premier League at the end of the season, when each year the bottom three teams are relegated to the second tier of the Championship. Forest currently sit 15th in the 20-team Premier League, two places above Everton. If a serious points penalty were imposed, both would immediately fall to the bottom three places.

The cases against Everton, a founding member of the Premier League who were last relegated in 1951, and Forest, a former two-time European champion, are part of the league's new regulations on how financial matters should be handled. A fast-track process was created last year amid long-standing complaints about the sometimes glacial pace at which the league is completing investigations into its teams, which include some of the world's richest clubs.

Under the revised rules, the league requires its 20 teams to provide up-to-date financial data by December 31. The league then has fourteen days to review any violations. The cases against Everton and Forest are due to be concluded by the end of May, including any appeals, which could result in any penalties being imposed on the teams' points tally for the current season.

Everton were previously handed a 10-point penalty in November – the biggest in Premier League history. The club is appealing the deduction, which has angered many of the club's fans, who claim the penalty was wrongly imposed. The league remains under pressure to conclude a years-long case involving serial champions Manchester City, who were accused of 115 rules violations last year, and a newer case against Chelsea, which self-reported payments last year in related to transfers from the previous owner, the club. Russian oligarch Roman Abramovich.

The new accelerated financial investigation process is exclusively intended for violations of financial stability rules. Under these rules, clubs must keep their losses below the maximum of 105 million pounds (about $133 million) over a three-year period.

Forest's allowable losses were limited to 61 million pounds (approximately $77 million), as the team played in the Championship for the first two seasons of the rating period.

In a brief statement, Nottingham Forest said that “the club intends to continue to cooperate fully with the Premier League in this matter and is confident of a quick and fair resolution.”