Q&A: Everton’s latest points deduction and what it means for the club

The penalty is the Toffees’ second of the season.

Everton have been hit with a fresh two-point deduction for breaching Premier League spending rules (Peter Byrne/PA) (PA Wire)

Everton have been plunged deep into Premier League relegation trouble after being docked another two points for a second breach of spending rules.

The Toffees now sit just two points clear of the bottom three with seven fixtures remaining, although they have a game in hand on each of the three sides below them – Nottingham Forest, Luton and Burnley – and are 11 points better off than bottom-of-the-table Sheffield United.

Here, the PA news agency takes a closer look at their plight.

What has happened?

An independent commission has deducted two points from Everton’s tally after the club admitted a breach of the Premier League’s profit and sustainability rules (PSR) over the three-year cycle to 2022-23, leaving them on 27 from 31 games.

Haven’t we been here before?

Yes. The Merseyside club were hit with an unprecedented 10-point penalty in November after being found to have “taken chances” with PSR. Their losses for the three-year period up to 2021-22 were £124.5million, £19.5million over the threshold, even accounting for allowances made for the Covid-19 pandemic. At the time, they slipped to 19th place as a result, but the sanction was reduced to six points in February following a successful appeal, at which point they climbed to 15th.

What are the PSR?

These are the regulations governing a club’s maximum permitted losses. Normally top-flight clubs can lose up to £105million over the three-year assessment period without being in breach.

How much above the limit were Everton?

The club exceeded the spending limit during the specified period by £16.6million. During a three-day hearing, the commission considered mitigating factors cited by Everton, but ultimately decided a two-point penalty to take effect immediately was appropriate.

What were their arguments?

The Goodison Park outfit argued against further punishment, pointing to “the concept of double punishment, the significant mitigating circumstances facing the club due to the war in Ukraine, and the high level of co-operation and early admission of the club’s breach”.

What have Everton said?

The club have signalled both their intention to appeal and commitment to “working collaboratively” with the league on PSR matters, while expressing concern over “the inconsistency of different commissions in respect of points deductions applied”.

Would that be the end of the matter?

Possibly not. The independent commission was unable to decide on whether there was a further breach relating to costs of £6.5million and so another hearing will follow. That case will be heard at an unspecified date, with any resulting penalty likely to be applied next season.

Are they alone?

No. Forest were last month docked four points for an overspend of £34.5million on their allowed total of £61million – £22million is deducted from the £105million limit for each season spent outside the Premier League during the qualifying period – with a further two points discounted to reflect their early plea and co-operation. Sky Bet Championship leaders Leicester, who have since reported a pre-tax loss of £89.7million for the year to June 30, 2023, were referred to an independent commission by the Premier League for an alleged breach last month.