Everton could end up at the centre of a legal storm involving the Premier League and several top-flight and Championship clubs.
Luton Town, Brentford, Leicester City, Leeds United, Southampton, Burnley and Nottingham Forest could all end up launching cases against either the Premier League or the Toffees – or both.
Everton were deducted two points for breaching Profitability and Sustainability Rules (PSR) in the period 2019-2023 on Monday, a decision which they have appealed against.
They were also deducted six points earlier this season for a breach between 2018-2022, reduced from 10 on appeal.
A third case is now set to take place this summer regarding loan repayments, which the club claim relate solely to the new stadium being built at Bramley-Moore Dock so are not relevant to PSR.
But the independent commission dealing with Everton’s second case said it could not decide within the necessary timeframe whether these capitalisations constituted breaches, so they will be assessed later this year, most likely in the summer.
Between initial hearings and appeals, this will be Everton’s fifth PSR hearing in the space of a year, all bringing massive uncertainty to both the club and their rivals.
Everton are currently just two points above Forest and Luton, who are 18th and in the relegation zone.
Forest, who were also deducted four points last month for a PSR breach, are still awaiting the results of their appeal, as are Everton, with the backstop date for this falling on 24 May – the Friday after the final games of the season.
This means Luton and Brentford, who are two points above Everton, may well go into the final day of the season not knowing what they need to survive.
Either side could go down, only to find out later in the summer that Everton have received a further points deduction for their loan repayments which would have seen them relegated instead.
This is just one side of a potential vicious cycle of legal cases spanning the top two divisions, as Yasin Patel, a sports lawyer at Church Court Chambers, explains: “Although there is a potential loss of points, the Premier League don’t think they can deal with it within this time period, so that may apply next year.
“What happens if the case is heard next season and they do get points deducted? Any right person would say those points should’ve been deducted this season. If I were Luton or Brentford, I’d be raging.
“If Luton or Brentford were to get relegated and this case gets brought against Everton next season and they get points deducted, if I were their lawyer, I’d be suing the Premier League and Everton. But if I were Everton I’d be asking ‘what’re the rules?’
“If you’re going to have guidelines, those guidelines should be clear to those who need to abide by them. But in this scenario, they’re not.”
Last year, Leicester, Burnley, Leeds, Southampton and Forest announced their intention to sue Everton for lost earnings due to relegation, and this case could also be launched against the Premier League.
If Everton had received their six point deduction in 2022-23, the most appropriate time given that penalty relates to 2018-2022, then they would have finished 19th, below both Leicester City and Leeds.
This would have had the greatest impact on Leicester, who would have stayed up, in turn not recording losses as heavy as they have and potentially avoiding PSR penalties themselves.
“The Premier League have got their legal team lined up for legal battles, whether it be from Luton, Brentford, Everton or Leicester,” Patel explains.
“I wouldn’t rule out legal arguments from Leicester and other clubs that went down last year because ultimately they’ve suffered, given Everton’s points deductions should’ve been done last season.
“They may have been playing in the Premier League this season and they will have incurred losses because of that.”
There is also the question of Everton’s grievances at how the Premier League have handled these PSR cases. There has been significant criticism of the lack of clear guidelines on PSR punishments.
And the third case now presents even more of a concern for Everton, who may well argue in their appeal they should receive no penalty until that has been resolved, given it is part of the same accounts and directly relevant to this season.
This could all be considered grounds for a potential case from Everton against the Premier League, which would be incredibly complex, given the Toffees are a member club and shareholder of the top flight.
“The Premier League is nothing but a company, and like any business, if Everton think they’ve been wronged by another business, the Premier League, of course they can go to court,” Patel says. “If you lose your Premier League status, what comes with that are hundreds of millions worth of losses, players leaving, television rights etc.”
While many think Everton’s two-point deduction being announced marks an ending to the ongoing legal and financial dominance over football discourse, this is unfortunately untrue. The chaos appears to have only just begun.
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