Everton’s third FFP hearing of the season took place in the first three days of last week, with i reporting a decision on the outcome could be announced as early as this week.
The Toffees have already been deducted six points this season for breaching the Premier League’s profit and sustainability rules (PSR), reduced from 10 on appeal.
And they may well now face a further deduction after admitting to another breach, this time over the period 2019-2023.
i spoke to a football finance expert to find out what Everton’s second hearing verdict could be and what it means for the relegation battle.
Three possible outcomes of Everton’s FFP hearing
Everton’s second hearing is probably the most predictable of the season so far, whether the decision reached is reasonable or not.
The Toffees’ first case was marred by the uncertainty of uncharted waters, Nottingham Forest’s heavily impacted by an adjusted loss limit and Brennan Johnson, but this case is unique in that three-quarters of it has already been penalised.
Due to the impact of Covid-19, Everton’s first breach spanned 2019-2022, their second 2019-2023.
On one hand, this feels unfair, a classic case of double jeopardy, but on the other it will mean some will consider their second breach all the more egregious. If Everton knew they were going to breach in the first instance, doing it again will draw inevitable accusations of recklessness and impunity.
Unlike in Everton’s first case, there are now loose benchmarks in place for how PSR breaches will be penalised.
The Forest report agreed with Everton’s appeal report that a three-point deduction is the standard acceptable starting point for a “significant” breach of PSR, with points added on from there for scale. Alongside this, it is clear from the Forest report that the Premier League believe a points deduction is the only acceptable punishment for PSR breaches.
Both Everton’s 2019-2022 breach of £19.5m and Forest’s of £34.5m were judged to be worth three points on top of the initial three, so six in total. Forest then received two points back as mitigation for cooperating with the Premier League.
This provides a relatively clear framework for how Everton will be punished. Despite what the club will believe is a strong case for mitigation on the basis of double jeopardy, the independent commission are likely to start from a basis of around six points, unless the Toffees’ breach is significantly lower than it was in 2019-2022, which seems highly unlikely.
There are three possible outcomes here. The first, and least likely, is that the independent commission believes Everton have already been punished for the majority of this period, and only recommend a financial penalty. Given the Premier League’s previous assertion that points deductions are the only acceptable punishment for PSR breaches, this seems highly unlikely.
The second option is a penalty as significant as Everton were initially prescribed in their first case, a deduction of six points or above. Given the club’s previous punishment, this also seems reasonably impractical and would be viewed as draconian as best.
This leaves the final option of a smaller points deduction, the outcome football finance expert Dr Rob Wilson believes is most likely.
“We will hear something very similar to what we got with Forest,” Wilson tells i. “It might be a six-point deduction reduced to four, with the reduction to four will be because of the crossover of the PSR periods, the double jeopardy situation. They’ve still breached, but they’re going in the right direction with regards to PSR for the next period. I’m expecting four.
“On the basis they’ve breached they’ll get three, then it will be determined by the size of the breach and the negotiation from there.
“On the basis that the charge is being heard, you get a sense of confidence that the Premier League are sure from the submission of information that Everton provided in advance of Christmas that there is a breach of some description, so three points would be the minimum. They’re drawing a pretty hard line in the sand to clubs in the face of the independent regulator.”
When will Everton know if further points have been deducted
Everton will know the result of this third hearing by 8 April at the latest, but as i reported recently, they could hear the outcome as early as this week.
But this outcome may well not be the end of Everton’s PSR nightmare this season, as they will then be able to appeal whatever punishment is initially given to them.
The Premier League have identified Friday 25 May as a backstop date for any appeal for both Everton and Forest’s cases to be wrapped up, although this falls five days after the final matches of the season.
How Everton’s FFP charge could affect the relegation battle
Everton are currently 16th in the Premier League, four points above Nottingham Forest in 18th.
If they were to receive the four-point deduction Wilson predicts, the Toffees would then drop to 17th, above Forest on goal difference.
Yet the uncertainty around both Forest and Everton will continue to have a significant impact on the relegation battle. Forest have already announced they will appeal their current punishment, with Everton likely to do the same if they’re given a further points deduction.
The Premier League has announced a backstop date of 25 May for these appeals to be concluded, the Friday after the final day of the season.
This means Everton could finish the season unsure whether they have done enough to ensure their top-flight survival.
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