What does the Everton case mean for Manchester City?
Everton FC received an immediate 10-point deduction on 17 November after an independent commission found it guilty of breaching the Premier League's Profit and Sustainability Rules (PSRs).
The decision followed a complaint made by the Premier League earlier this year, that the club’s losses for the 2021/2022 season exceeded the PSR permitted sum. The case was referred to an independent commission to determine. During the proceedings, Everton FC admitted it had breached the rules, but the extent of the breach was disputed.
The PSRs role is to strengthen the financial stability and sustainability of Premier League clubs; with limiting the losses any club can incur being one part of its remit.
Following a 5-day hearing, the Commission determined that “Everton’s PSR calculation for the relevant period resulted in a loss of £124.5million, which exceeded the threshold of £105million permitted under the PSRs.” The subsequent 10-point deduction, plunges the club into the relegation zone.
The 10-point deduction is significant as it marks the biggest sanction in Premier League history. It has also left many wondering how such a decision has been made so quickly, while there is little to no recognisable movement on the 115 charges brought against Manchester City earlier this year for alleged breaches of the Premier League's financial fair play rules (FFPs). It also raises questions about the scale of sanction City could face if found guilty – is expulsion from the Premier League on the cards?
The Premier League’s allegations against Manchester City FC follow a 4-year investigation into its financial dealings over a 9-year period. City’s rule-breaking is alleged to have taken place between 2009 and 2018 (City won the Premier League 3 times during this period). Unlike Everton, City wholly refutes the claims made against it, stating in February 2023:
“Manchester City FC is surprised by the issuing of these alleged breaches of the Premier League rules, particularly given the extensive engagement and vast amount of detailed materials that the EPL has been provided with.
The club welcomes the review of this matter by an independent commission, to impartially consider the comprehensive body of irrefutable evidence that exists in support of its position. As such we look forward to this matter being put to rest once and for all.”
It is worth noting the regulations Everton is accused of breaking relate to the permitted losses Premier League clubs can make, whereas allegations against Manchester City are centred around failure to provide accurate information, failure to disclose financial remuneration to former employees and failure to comply with the investigation.
The Manchester City case is considerably more complex than Everton’s, not least because of the vast amount of evidence the case involves. Everton co-operated with the Premier League, admitting its wrongdoing (which ultimately sped up the process). In contrast, to date City insists that no rules were broken and has refused to co-operate; a defensive position which will likely impact any punishment ultimately imposed. Comparisons between the two cases should be made with caution.
What is certain is that if the Premier League’s claims against City are proven, the penalty could be much more than Everton’s, though we are unlikely to get a verdict anytime soon.
Hamlins provides a unique offering to the sports industry, delivering a combination of commercial, IP, corporate, regulatory, privacy and reputation management expertise. If you are in the football community and want a conversation about your club’s approach to compliance with the latest Regulations, please get in touch.