Everton, a founding member of England’s Premier League that has fallen into financial crisis, faced yet more pain on Friday after it was given a 10-point penalty for breaching the league’s economic rules. The punishment sent Everton to the bottom of the league table and left it facing the threat of relegation from England’s top division at the end of the season.
The announcement of a points penalty was not a surprise, but the decision will deepen the crisis that has engulfed Everton, one of English soccer’s oldest teams, at a time when its very future has been placed under a cloud by hundreds of millions of dollars in debt.
An independent league commission hearing the case against Everton for breaching the league’s profit and sustainability rules announced the punishment. It said the penalty — the biggest in the Premier League’s history — must be applied immediately, a result that plunged the Blues to 19th place from their relatively safer position in 14th and on the same points total, 4, as last-place Burnley.
At the end of each season, the bottom three teams in the Premier League table are relegated out of the division and into the second-tier Championship.
Everton said it was “shocked and disappointed” by the scale of the penalty, and immediately announced its intent to appeal.
“The club believes that the Commission has imposed a wholly disproportionate and unjust sporting sanction,” Everton said in a statement on its website. “The club has already communicated its intention to appeal the decision to the Premier League.”
The team’s perilous financial state has required regular cash infusions from external sources to allow the club to continue operating. The most recent loan came from 777 Partners, an American group that in September agreed to acquire the storied club. That deal has not yet been approved by the Premier League and the Financial Conduct Authority, a regulator, amid questions about 777 Partners’ own finances.
The Premier League referred Everton to an independent commission in March after Everton posted financial losses for the fifth straight year. Under the league’s regulations, teams are allowed to lose no more than 105 million pounds, or $130 million, over a three-year period. Everton acknowledged being in breach of those rules for the financial year through 2022.
The panel, according to a 41-page written judgment, agreed with the Premier League’s assessment that Everton had breached the allowed amount of losses by £19.5 million (almost $25 million).
The scale of Everton’s penalty raises the prospect of a far larger punishment that could await the league’s dominant team, Manchester City. The club has been charged with 115 rule breaches related to its financial declarations. That case, now in its fifth year, has yet to reach a conclusion; it is being heard by a similar panel to the one that decided the Everton case.
While the points loss severely increases the chances of Everton’s suffering a costly demotion to the second tier for the first time in its history, the low point totals obtained so far by some of its relegation rivals may yet allow it to escape. Even with its 10-point penalty, Everton is only 2 points behind Luton Town, the team occupying 17th place — the final position offering safety, and a place in the league, for next season.
A spokesman for 777 Partners said the company had no comment on the punishment or any effect it would have on its proposed acquisition, because that process remains ongoing. Its proposed deal contains contingencies for points deductions and even a possible relegation.
Part of the reason Everton’s punishment was as harsh as it, the panel said, was related to a claim, upheld by the panel, that the team had failed to engage with the league in good faith, a claim the team continues to reject.
“Both the harshness and severity of the sanction imposed by the Commission are neither a fair nor a reasonable reflection of the evidence submitted,” Everton said.