Everton, a historic English soccer club trying to weather a serious financial storm, achieved a modest victory on Monday when a record penalty that had sent it to the bottom of the Premier League standings was reduced on appeal.
The original penalty imposed on Everton, a 10-point deduction for breaches of financial rules, was reduced to six points, increasing their chances of staying in the division and retaining access to tens of millions of dollars in annual revenue. which means a place in the Premier League. brings.
The successful appeal immediately lifted Everton to 15th in the standings and eased the club’s fears of relegation and possible financial ruin. However, the respite could be short-lived.
The Premier League announced in January that Everton and Nottingham Forest, another club at risk of relegation, were facing additional charges for breaching cost control regulations. If the teams are found guilty, the new case will almost certainly lead to another point deduction.
Everton, a founding member of the Premier League, has become a symbol of mismanagement and financial risk-taking in recent years. Crippled by expensive contracts and the cost of building a new stadium, the club faces debts of around $1 billion and continues to need regular injections of millions of dollars in external financing to keep its operations running.
One of its largest creditors is 777 Partners, an American investment firm. That company began lending money to Everton in September when 777 announced a deal to acquire the club from Farhad Moshiri, a British Iranian businessman who has owned the club since 2016.
But the ownership transfer has shown little sign of reaching a conclusion amid increasing scrutiny of 777 Partners by the Premier League, which must back the deal before it can go ahead.
The Everton case is also significant in other ways. The original charges against Everton came as the British government sought to impose a regulator for the football industry. The Premier League has reluctantly accepted the idea of a regulator but is trying to define the powers of such a body. Until now, the league has been largely self-managed, owned by and for the 20 teams that participate in it each season.
For Everton, the prospect of relegation from the Premier League to the Championship, the second tier of English football, would likely cause its sporting and financial crisis to plummet further. Relegation would trigger a liquidation of players and would almost certainly lead to administration, a form of protection against bankruptcy. However, recent news reports have said there are potential alternative investors for the club, which is in the process of building a 53,000-seat stadium on the banks of the River Mersey in its home city of Liverpool.
Under a process agreed by Premier League member teams last year, any cases relating to breaches of the so-called Profit and Sustainability Rules, including any appeals, must be decided before the start of the next season. The rules were changed because Everton’s original breach occurred in a season in which they narrowly avoided relegation, raising the threat of legal action from a group of clubs who believe they lost as a result.
Everton was originally punished for violating rules under which state clubs can lose a maximum of 105 million pounds, about $133 million, over three seasons, excluding spending on infrastructure, youth programs and other specific items. Everton exceeded that limit by £19.5 million.
The Premier League said Everton’s 10-point penalty, imposed by an independent review panel, had been reduced because the club had successfully refuted two of the nine justifications underpinning the original deduction. “This revised sanction takes immediate effect and the Premier League table will be updated today to reflect this,” the league said. The league had arrived at the 10-point penalty, and the new six-point penalty, arbitrarily; It does not have a fixed schedule of deductions for financial violations.
Part of the league’s original sanction was based on a claim that Everton had not acted in good faith with the league. The reduction in penalty points was partly due to the appeals panel rejecting that assessment, Everton said.
“That decision, along with the reduction of the points deduction, was an incredibly important point of principle for the club in the appeal,” Everton said in a statement.