An independent Panel immediately handed Everton FC a two-point deduction for breaching the Premier League’s Profitability and Sustainability Rules (PSR) for the period ending in the 2022/23 season.
During a three-day hearing last month, the independent Commission heard evidence and arguments from the club on a range of possible mitigating factors for the £16.6m breach, including the impact of two back-to-back PSR charges. Accordingly, the Commission determined the appropriate sanction to be a two-point deduction, effective immediately.
The independent Commission reaffirmed the principle that any breach of the PSRs is significant and warrants, indeed requires, a sporting sanction.
click here to read the full written reasons of the independent Commission.
The committees are independent of the Premier League and the member clubs. The members of the Committee were appointed by the independent Chairman of the Premier League Refereeing Committee.
Notes
Profitability and sustainability rules (see Premier League Handbook Section E)
– All Premier League clubs are assessed for compliance with the Profitability and Sustainability Rules (PSR) every year.
– Compliance is assessed by reference to the club’s PSR Calculation, which is the sum of its Adjusted Pre-Tax Profits for the relevant assessment period.
– A club’s adjusted pre-tax profit for each season takes into account its profit or loss after depreciation and interest, but before tax, and then applies a series of ‘add-backs’.
– These ‘returns’ are costs which the Premier League and its clubs recognize are in the general interest of the club and football, for example investment in infrastructure, community, women’s football, youth development and depreciation of tangible assets. The cost of COVID-19 in relation to the years 2019/20, 2020/21 and 2021/22 was also allowed to be included as an ‘addition of returns’.
– Typically, a club’s PSR Calculation is the sum of its Adjusted Pre-Tax Profits over a three-year period. Following the amendments made to the PSRs during COVID-19, the relevant figures for the 2019/20 and 2020/21 seasons are now averaged. In the present cases, therefore, the relevant period includes the periods 2022/2023, 2021/2022 and the average adjusted profits before tax for the periods 2020/2021 and 2019/20.
– A club will be in breach of the PSRs if the calculation of the PSR over the relevant period results in a loss of more than £105m.
– At the 2023 Annual General Meeting, the clubs agreed to move the date for the submission of the audited Annual Accounts for loss-making clubs to 31 December (according to the Regulation E.50.2).
– Clubs have agreed to introduce Standard Guidelines for PSR cases (Appendix 1 to the Regulations) which seek to ensure that such cases are resolved at the same time as the complaint is issued, with any sanction issued before the next AGM. This provides certainty for the League, its member clubs and other stakeholders as to the League’s participation in the following season (Appendix 1 page 533).
– The part of the EFC’s case dealing with its admitted breach proceeded under the new Standard Guidelines, set out in Schedule 1 of the Rules.
– As the decision records, there is still a dispute between the Premier League and the club over the status of certain costs which the club says are related to the construction of its stadium. The Union considers that these costs should be considered as loss for the purposes of the PSRs. The club maintains that these costs are not losses as they relate to the construction of the stadium and have been capitalized in their audited accounts. This issue, as well as the question of whether any additional sanction should be applied, will be resolved by the same Committee at a later date.
Premier League Investigations, Independent Commissions and Appeals
– The Premier League Board has the power to investigate any suspected or alleged breach of Premier League rules
– There are a number of options available to the Board of Directors where a violation of the Rules is suspected or alleged. For PSR cases, the matter will be referred to an independent Commission to determine whether there is a breach and, if so, what the sanction should be
– The League has access to an independent judicial committee, which includes a number of legal, financial and other experts. The members of the Refereeing Committee are appointed, in accordance with Premier League Rules W.19, W.20 and W.26, by its independent chairman, Murray Rosen KC, an experienced barrister. It is the chairman who selects the members of the Refereeing Committee to sit on Committees, which are independent of the Premier League and its clubs
– All proceedings before an independent Commission are confidential and heard in private. This includes the date and location which cannot be announced in advance
– There is a range of sanctions available to the independent Committee which include fines, point deductions and other sporting sanctions
– In accordance with Premier League Rule W.82.2, at the end of the process, the final decision of the independent Committee will be made public via the Premier League website
– A party to the proceedings who wishes to challenge a decision of the Committee may do so in accordance with Section W of the Premier League Rules.
– The Board of Appeal is also appointed by Mr Murray Rosen KC and must consist of three members, one of whom should hold judicial office and chair the Board of Appeal.
– The work of the appeals division is also confidential and heard in private.
– The Board of Appeal has a wide discretion in relation to the appeal and may allow it, reject it or make any decision it sees fit (including changing the order of the Panel)
– For more information on the disciplinary process, see Premier League Section W Handbook