Everton have been ordered to pay a £35m compensation payment to Burnley after breaching PSR in a season when they stayed up at the expense of the Clarets.
Everton were surprised and angry by the ruling made by an independent panel, and have already launched an appeal against the ruling, which they believe sets a dangerous precedent that could lead to a rash of other legal cases between clubs.
Everton said the ruling was “fundamentally flawed” and expressed their confidence their appeal will succeed.
They said in a statement: “Everton Football Club is surprised and angered by the decision of a Premier League Independent Disciplinary Commission to order a compensation payment to Burnley Football Club in relation to Everton’s PSR breach in June 2022.
“Everton has appealed the decision and is clear in its belief the ruling is fundamentally flawed in both law and fact.
“The club does not recognise the findings of the panel in determining Burnley’s relegation from the Premier League in May 2022 was caused by a sporting advantage gained by Everton due to a breach of Profit & Sustainability Rules, for which a substantive sporting sanction has already been received.
“This ruling sets a dangerous and unworkable precedent for English football, given it is constructed on a principle that a club can be in breach of financial rules at any point in a financial year.
“Everton believes the panel’s ruling misrepresents the clear evidence presented by its legal representatives and that an appeal will be successful.”
Burnley brought a case against Everton after they were relegated in 2022, finishing four points behind the Merseyside club.
Burnley welcomed the ruling and said Everton gained a sporting advantage by over spending.
Chairman Alan Pace said: “When we were relegated in 2022, we disappointingly accepted the outcome on the pitch. What we could not accept and what no club should be asked to accept was competing in a competition later shown to have been compromised.
“We did not come to this lightly. When resolution through every available channel was declined, formal action was imposed as the only path left to us.
“The Independent Commission has now confirmed, in clear terms, that a rule was broken and a competitive advantage was improperly gained.
“Our action has always been about making football fair. Clubs that comply with the rules deserve to compete on a level playing field. Fans deserve it. The sport demands it. The Commission’s decision affirms the existing framework to protect the game.”
Burnley had claimed £51m in damages and were awarded £26m in compensation, plus a further £9.1m in interest payments. Everton believe the punishment is unprecedented and greater than previous fines handed out to Chelsea, who were docked £10.75m for financial and reporting breaches under former owner Roman Abramovich, and West Ham, in the Carlos Tevez case.
Everton had been found guilty of breaching the Premier League’s Profitability and Sustainability Regulations for a four-year cycle, ending in 2022, as they were deemed to have made losses of £19.5m over the threshold. They were given a 10-point deduction in November 2023, which was reduced to six points on appeal.
The same three-man panel who gave Everton that 10-point penalty heard Burnley’s case
Everton are adamant that the compensation payment will not impact on their summer spending or their plans to strengthen under current owners The Friedkin Group.
The PSR breach came when Everton were under former owner Farhad Moshiri, but the compensation order is against the club, rather than the businessman himself.
Everton’s position is that they were not aware they were breaching PSR in 2022 and, while Burnley were relegating in May 2022, the accounting period ran until 30 June. Had they known they deemed above the threshold, they would have had the opportunity to sell someone after the season had finished.
Everton have also noted they have already had a financial punishment, with the six-point deduction meaning they finished two places lower in the division in 2023-24, costing them around £6m.
Everton also believe they are compliant with PSR now and that no other clubs have a case against them relating to the 2021-22 season.