Premier League reduces Everton’s points penalty, reducing relegation fears
Everton, a storied English soccer club trying to weather a serious financial storm, secured a modest victory Monday when a record penalty that sent the club to the bottom of the Premier League standings was reduced on appeal.
Everton’s original penalty, a ten-point deduction for breaches of financial rules, was reduced to six points, boosting its chances of staying in the division – and retaining access to the tens of millions of dollars in annual revenue that brings with it a place in the Premier League. brings.
The successful appeal immediately lifted Everton to 15th in the standings and allayed the club’s fears of relegation and possible financial ruin. However, the reprieve could be short-lived.
The Premier League announced in January that Everton and Nottingham Forest, another club at risk of relegation, faced additional charges for breaching cost control rules. If the teams are found guilty, the new case will almost certainly lead to another points deduction.
Everton, a founding member of the Premier League, has become a symbol of poor management and financial risk-taking in recent years. Crippled by expensive contracts and the cost of building a new stadium, the club faces debts of around $1 billion and continues to regularly require millions of dollars in outside financing to keep its operations afloat.
One of the largest creditors is 777 Partners, an American investment company. That company began lending money to Everton around the time in September that 777 announced a deal to buy the club from Farhad Moshiri, a British-Iranian businessman who has owned the club since 2016.
But the change of ownership has shown little sign of completion amid increasing scrutiny of 777 Partners by the Premier League, which must approve the deal before it can go ahead.
The Everton case is also important in other respects. The original charges against Everton came when the British government wanted to impose a regulator for the football industry. The Premier League has reluctantly accepted the idea of a regulator, but is trying to shape the powers of such a body. Until now, the league has been largely self-run, owned by and for the twenty teams that play in it each season.
For Everton, the prospect of relegation from the Premier League to the Championship, the second tier of English football, would most likely escalate the sporting and financial crisis even further. Relegation would trigger a massive sell-off of players and almost certainly lead to administration, a form of protection against bankruptcy. Nevertheless, recent news reports have said there are potential alternative investors for the club, which is building a 53,000-seat stadium on the banks of the River Mersey in home city Liverpool.
Under a process agreed by Premier League teams last year, all cases related to breaches of so-called profit and sustainability rules, including any appeals, must be decided before the start of next season. The rules were changed because Everton’s original breach came in a season in which they narrowly avoided relegation, leading to the threat of legal action from a group of clubs who believe they lost as a result.
Everton were originally punished for violating rules that state clubs can lose a maximum of 105 million pounds (about $133 million) over three seasons, excluding spending on infrastructure, youth programs and other specific elements. Everton exceeded that limit by £19.5 million.
The Premier League said Everton’s 10-point penalty, imposed by an independent review panel, had been reduced because the club had successfully refuted two of the nine justifications underpinning the original deduction. “This revised sanction has immediate effect and the Premier League table will be updated today to reflect this,” the league said. The league had arbitrarily arrived at the penalty of 10 points, and the new one of six points; it has no set schedule for deductions for financial violations.
Part of the league’s original punishment was based on the claim that Everton had not acted in good faith with the league. The reduction in the points penalty was partly because the appeals panel rejected that assessment, Everton said.
“That decision, together with reducing the points deduction, was an incredibly important point of principle for the club on appeal,” Everton said said in a statement.