The financial imperative of staying in the Premier League is greater than ever, with the riches on offer to the top 20 teams in the land genuinely staggering. Sadly, at the end of the 2022/23 campaign the Foxes were relegated after they finished in 18th place. They were above Leeds and bottom side Southampton but their tally of 34 points was two short of 17th placed Everton.
However, as the run-in was taking place and the relegation battle was well and truly on, Everton were suspected of possible breaches of what is generally termed financial fair play, or FFP. In March 2023, the Premier League referred the Toffees to the independent commission that considers such matters. At that time little information was disclosed, other than the fact that the alleged breach occurred in the period that ended with the 2021/22 campaign.
Everton Reported Huge Losses in Breach of Limits
Since being taken over by Farhad Moshiri in 2016 Everton had spent lavishly on transfer fees and player salaries. It brought them little success, and in fact, they went backwards. However, all that expenditure, plus a significant outlay on building a new stadium, Bramley Moore Dock, meant that it was well known they were reporting huge losses.
The global health crisis exacerbated this by reducing income and it is widely reported that at one stage their three-year losses came in at more than £370m. Premier League rules allow for losses of up to £105m and so many were puzzled by the lack of action against the Merseyside club.
Everton have always claimed that they kept in constant contact with the Premier League about their spending and financial position. They argued that they had been told everything was ok and that due to extra allowed losses for the global health issues from 2020 onwards, plus the costs associated with their new stadium, their spending did indeed fall within the permitted levels.
With Everton, despite their protestations, so clearly – so it seems – in breach of limits on sustainable losses, as the 2022/23 relegation battle bubbled, up some fans began to call for the Toffees to be deducted points. Of course, this did not happen, and in no small part due to Everton nicking a 2-2 draw at the King Power in May, Sean Dyche’s team stayed up and the Foxes went down.
Independent Commission to Take Place in October 2023
With the dust settled on the relegation battle, it was announced in mid-June that Everton’s hearing with the independent commission would take place in October. Details of the FFP breach remain scant, though it has been said that it relates to loans for the new stadium and tax issues around these.
Everton were reportedly confident that they would beat the charges and said they were “prepared to robustly defend” their position. That is all well and good but where does that leave the three relegated sides plus other teams that went down during the time when Everton were allegedly in breach of FFP?
A Number of Clubs Call for Legal Action
There was an obvious case for Everton’s hearing taking place before the 2022/23 campaign concluded. A number of clubs, possibly including Leicester, are believed to have written to the Premier League requesting that this happen. A number of news outlets, with The Guardian probably the most reputable, have stated that several clubs will pursue legal action and financial compensation if the Toffees are found guilty.
At the end of the 2021/22 season, when Everton would again survive a major relegation scare, both Leeds, who in the end also survived, and Burnley, who didn’t, met with the PL about Everton’s financial issues. At that stage both Leeds and Burnley were told that Everton did not, at that time, have a case to answer. When Leeds stayed up they lost the will to pursue any further action but the Clarets were still very upset.
With the Toffees being brought before an independent commission so soon after Burnley were told the club had not breached FFP, it is easy to see why. All the teams involved in this matter, aside from Everton themselves, have long argued that any action needed to be taken quickly to ensure a fair result and the integrity of the league. This did not happen, with the Premier League seemingly in no rush.
Financial compensation is one thing, but clubs cannot be reinstated into a league they have been relegated from. Moreover, rarely does such compensation cover the true losses suffered by a team going down.
Where the Case Stands as of Summer 2023
Until the commission hear all the evidence and reach a verdict, there is no legal action being taken by any of the clubs involved, including Leicester. There is still the chance that Everton will be found not to be in breach, or that any punishment could only be minor – such as a modest fine.
If Moshiri’s club are found entirely “innocent” that will probably be that but if they are hit with a fine of any sort, and certainly if they are punished by a points deduction, it is believed that the Foxes, Leeds, Southampton and Burnley may pursue compensation via a separate tribunal.
Leicester & Burnley Have Strongest Cases?
In 2022/23 only one team could have stayed up had Everton not done so, and given Leicester finished 18th it is felt they would have the strongest case for any claim. For that reason, Burnley’s protest may also holds the most weight from the season before. However, Leeds and the Saints could also pursue compensation.
Relegation costs sides at least £100m and Leicester may seek that sum, or more, from the Toffees, as well as possibly suing the PL due to their poor handling of the situation. That said, much depends on the outcome of the October hearing. History shows us that the Premier League has rarely overseen points deductions. Moreover, Everton maintain they have collaborated with the authorities throughout and have not done anything wrong. Roll on October!