Everton's Potential Points Deduction Explained
The Premier League have referred Everton to an independent body for alleged breaches of their profit and sustainability rules, but could they really hit them with a points deduction?
Transcript
00:00 The Premier League have referred Everton to an independent commission of what they believe
00:07 are very serious breaches of the financial rules and they now face the very real threat
00:12 of a points deduction.
00:13 Hello there everybody, yes I am Adam Cleaver and just to cut through all the really big
00:16 words in that headline, Everton are potentially quite f***ed.
00:20 Now I know what you're thinking, you hear stuff about financial regulations and rule
00:23 breaches all the time and nothing ever really comes of it.
00:26 So is this story different?
00:28 Are they really facing the possibility of a catastrophic points deduction?
00:32 And to the first question, yes definitely and to the second, well maybe.
00:37 Now what you need to know about this story is that the Premier League have these rules
00:40 in place for profitability and sustainability.
00:42 They're supposed to stop teams spending above their means and getting an unfair advantage
00:46 but what they're really there for is to stop teams going absolutely mad and going bankrupt.
00:51 And what happens if a team breaches these regulations is that the Premier League is
00:54 supposed to give them a little fine or possibly a transfer ban or maybe even a points deduction
01:00 but what they tend to do is just ruffle them on the head a bit and go 'hey, what do we
01:04 tell you, what do you like, just go on, just don't do it again, I'm watching you'.
01:08 But what makes this story so much different is that the Premier League has already faced
01:12 the threat of legal action from other clubs over Everton's spending.
01:16 If you cast your mind all the way back to last season there was that three-way relegation
01:20 battle between Everton, Burnley and Leeds, Everton got themselves safe with a game in
01:25 hand and the other two teams wrote to the Premier League and said 'look, can you have
01:28 a look at Everton's books please because we're not convinced they're playing by the rules
01:33 here and we are and one of us is now going to go down as a result'.
01:36 And so it was, Burnley got relegated on the last day of the season, Everton were safe
01:40 and the Premier League got back to the two clubs and said 'hey look, guys, that's a serious
01:44 accusation we're throwing around, okay, we have looked at Everton's books thoroughly,
01:49 we've worked with that club closely and we can assure you they have played by the rules
01:53 and I don't want to hear any more of this out of you two' and the two clubs went 'okay
01:56 dad, sorry dad'.
01:57 Which is what makes this development this morning so serious because the Premier League
02:01 are effectively admitting 'ah, we might have got that one slightly wrong so we're referring
02:08 it to an independent commission who are not anything to do with the Premier League who
02:11 will make that assessment'.
02:13 But this is all a moot point if Everton aren't found guilty of it so the question is, well,
02:17 did they breach the financial regulations?
02:19 And quick look at the numbers and whooo!
02:24 Okay the headline is 'you're only allowed to technically lose £5 million a season but
02:27 you're allowed to put some equity into that' so it's £35 million in reality so over a
02:31 three year period you're allowed to lose £105 million.
02:36 And if I may be so bold as to borrow this excellent graph from the Swiss Ramble last
02:39 year who you should absolutely be following on Twitter by the way, if we just go all the
02:43 way down to the bottom, oh my god!
02:46 Now the eagle-eyed amongst you there will notice that a lot of teams have gone over
02:49 that £105 million threshold.
02:51 That's because you're allowed deductibles, you're allowed to put money into your women's
02:54 team, into your infrastructure, into community projects etc etc.
02:57 There are things you can claim don't count towards this.
03:00 Now yes they're looking at getting a new stadium, they have invested heavily in their women's
03:03 team, there are things they can definitely write off but again going back to the Swiss
03:06 Ramble's incredible breakdown of this, that still puts them at a loss of £185 million,
03:12 some £80 million over what they're allowed to spend.
03:15 Now full disclosure here, I'm not a financial expert by any stretch of the imagination,
03:19 I mean I spent £80 on a pedal bin earlier in the year, that's how good I am with money.
03:23 It will be up to the independent commission to decide whether this very glaring thing
03:28 is in fact actually a breach of the regulations.
03:31 At the time of recording they are only two points above the relegation zone with West
03:35 Ham in 18th having two games in hand.
03:38 Any points deduction no matter how small you would imagine would be absolutely fatal for
03:42 their chances of staying in the league.
03:44 And given the severity of the alleged breach plus the fact it's potentially legal action
03:48 from another club, you would imagine if they are found guilty the punishment would be severe.
03:53 But and here is the saving grace for any Everton fans who have somehow made it this far in
03:56 the video, these things tend to take a while to happen, they have not announced a time
04:01 frame for it yet, so any punishments, any sanctions are unlikely to be this season.
04:07 Not impossible, but unlikely.
04:09 So did Everton breach the Premier League's financial regulations?
04:12 Probably, are there going to be top points?
04:15 Also probably, is that going to be this season?
04:18 Probably not.
04:19 Anyway let us know what you made of this all in the comments below, don't forget to like,
04:21 share and subscribe.
04:22 Welcome to 442, it's a party every god damn day, I'm Adam Cleary and I will see you later.
04:27 Bye!