Everton earned a points deduction of 10 points for violating Financial Fair Play (FFP) rules. The sanction is the harshest punishment ever for a Premier League club. As a result of the deduction, the Toffees now sit 19th in the table with just four points.

The Merseyside club previously posted losses of just over $55 million for the 2021/22 financial year. At the time, Everton admitted to having breached profit and sustainability rules (PSR) during this season. It was the fifth consecutive year that the club reported a loss. In total, Everton racked up $550 million in combined losses over the last five seasons.

Premier League rules state that their teams cannot lose over $130 million during three years. The top flight brought the case against Everton to an independent commission last month. This panel officially agreed with the Premier League regarding Everton’s financial issues. The commission has ruled that Everton posted losses of about $154 million during this three-year stretch.

“Everton’s understandable desire to improve its on-pitch performance (to replace the non-existent midfield, as Mr. Moshiri put it in evidence) led it to take chances with its PSR position,” the commission said in a statement.

“Those chances resulted in it exceeding the $130 million threshold by $24 million. The position that Everton finds itself in is of its own making. The excess over the threshold is significant. The consequence is that Everton’s culpability is great.”

“We take into account the fact that Everton’s PSR trend over the relevant four years is positive, but cannot ignore the fact that the failure to comply with the PSR regime was the result of Everton irresponsibly taking a chance that things would turn out positively.”

Everton already planning to appeal the decision

The Merseyside club quickly issued a statement of their own on Friday regarding the unfortunate news. “Everton Football Club is both shocked and disappointed by the ruling of the Premier League’s Commission,” read the statement.

“The club does not recognize 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. 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 points deduction has plunged Everton down in the table, where it is joint bottom with Burnley.
The points deduction has plunged Everton down in the table, where it is joint bottom with Burnley.

The points deduction has plunged Everton down in the table, where it is joint bottom with Burnley.

Everton has also already declared that they will file an appeal against the ruling to help block the 10-point deduction. “The club has already communicated its intention to appeal the decision to the Premier League,” continued the statement. “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.”

Points deduction affects the pending sale of Everton

The news comes as the club is attempting to change hands. Current owner Farhad Moshiri agreed to sell Everton to American investment group 777 Partners in September. The potential deal is currently going through the processes at the moment and is expected to come to a final result in December. Nevertheless, Friday’s ruling by the commission may affect the transaction.

Moshiri initially agreed to sell his 94% stake to 777 Partners for around $600 million. However, reports in October stated that a points deduction could reduce the final price of the club. The Americans are now expecting to pay a significantly lower fee for Everton.

777 Partners’ agreement to buy the Toffees is still incomplete. The company has a series of financial issues to sort out before a regulator can approve the deal. The process is ongoing, and the club and the investment group are taking time before an official announcement.