English men's soccer’s top-tier Premier League (EPL) has charged clubs Everton and Nottingham Forest with breaching its financial rules.
Both clubs have been referred to an independent commission over alleged breaches of the league’s Profitability and Sustainability Rules (PSRs) and have 14 days to reply before facing a hearing from a panel that will decide their punishment. Under league rules, hearings must conclude within 12 weeks, while appeal hearings must be held before May 24. The complaints must be resolved before June 1.
Top-flight clubs in the EPL are only permitted to lose £105 million ($131.69 million) over three years (£35 million per season). Clubs that breach those rules risk a fine or points deduction.
This is the second charge to come Everton’s way this season. The club was deducted 10 points in November after an independent commission found Everton’s losses up to 2021-22 amounted to £124.5 million. This second charge, meanwhile, relates to their accounts for 2022-23, which have not been published yet but have been submitted to the EPL.
The two cases center around interest payments on the club’s new £760 million stadium at Bramley Moore Dock, which Everton said should have been regarded as expenditure for PSR calculations in the 2021-22 financial year.
The club has also claimed there are other mitigating factors for their losses including being fully compliant with the EPL over the past two years, the impact of the Russia-Ukraine war on its lucrative USM naming rights sponsorship, worth £200 million, and the impact of the Covid-19 pandemic on the transfer market.
The club was forced to end its USM sponsorship due to the company’s connections to Russian oligarch Alisher Usmanov, who had sanctions brought against him by the UK government.
The club are currently awaiting the outcome of their appeal against the first charges, which will have a major impact on any decision by the independent commission on the second charge. A date for the appeal has not been confirmed yet.
Should their appeal fail, Everton risk being deducted points twice in the same season.
The new charges come at a significant time for the club after owner Farhad Moshiri announced his intention to sell his 94% stake in the club to US private equity firm 777 Partners.
While the takeover has been approved by the Financial Conduct Authority and the Football Association national governing body, the Premier League is yet to give the green light.
In response to the latest charges, Everton said in a statement: “The Premier League does not have guidelines which prevent a club being sanctioned for alleged breaches in financial periods which have already been subject to punishment, unlike other governing bodies, including the EFL.
“As a result – and because of the Premier League's new commitment to deal with such matters "in-season" – the club is in a position where it has had no option but to submit a PSR calculation which remains subject to change, pending the outcome of the appeal.
“The club must now defend another Premier League complaint which includes the very same financial periods for which it has already been sanctioned, before that appeal has even been heard. The club takes the view that this results from a clear deficiency in the Premier League's rules.
“Everton can assure its fans that it will continue to defend its position during the ongoing appeal and, should it be required to do so, at any future commission – and that the impact on supporters will be reflected as part of that process.”
While Premier League clubs are allowed to lose £105 million over three years, Nottingham Forest spent the first two seasons in question in the Championship, meaning their losses are capped at £61 million or £13 million in each of the 2020-21 and 2021-22 seasons and £35 million last season.
Their defense against the EPL’s charges centers around the sale of player Brennan Johnson to fellow EPL side Tottenham for up to £45 million in September, which took place after the accounting deadline of June 30. However, Nottingham Forest will argue that holding out beyond the deadline allowed them to generate a higher fee, which would be better for their long-term financial health.
Since being promoted from the Championships ahead of the 2022-23 season, Nottingham Forest have spent around £250 million on 43 players to compete in the Premier League. In September 2022, the club broke the British record for most signings in a single transfer window after announcing 21 new players.
In a statement, the club said: “Nottingham Forest acknowledges the statement from the Premier League confirming that the club has today been charged with a breach of the league’s profitability and sustainability rules.
“The club intends to continue to cooperate fully with the Premier League on this matter and are confident of a speedy and fair resolution.”
Nottingham Forest join Everton and Manchester City as the only EPL clubs to be charged with breaking the league’s financial rules.
Manchester City were referred to an independent commission over more than 100 alleged rule breaches between 2009 and 2018 last February. That case is ongoing.