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Everton points deduction appeal: Key questions answered as Premier League club's deduction reduced to six points

Everton were deducted 10 points on November 17 for a breach of the Premier League's Profitability and Sustainability Rules (PSR); the club appealed against the decision and a three-day hearing took place from January 31; on February 26, the deduction was reduced to six points

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Sky Sports News chief reporter Kaveh Solhekol explains why although Everton fans will be pleased to see their 10-point deduction reduced to six, there should be caution with regards to the ongoing investigation about a possible breach of PSR

Everton have had their 10-point deduction reduced to six points on appeal. Here, Sky Sports answers the key questions, including what could come next...

What happened with Everton's appeal?

The club's appeal, headed up by Laurence Rabinowitz KC, was considered over three days from January 31 by a three-person independent appeals commission which included a different set of people from the original commission panel.

Everton argued strongly that there were clear mitigating circumstances for the breach and those were situations that were mainly beyond the club's control.

The loss of sponsorship money due to sanctions as a result of the Ukraine war and a change in how interest payments on the club's new stadium were calculated were all part of the club's defence.

Another major part of the case centred on the disproportionate nature of the punishment the original commission handed out.

A final decision has now been given by the new panel, with Everton having their 10-point deduction for breaching the Premier League's Profitability and Sustainability Rules (PSR) reduced to six.

The club will now be on 25 points which moves them up to 15th and five points above the bottom three.

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Image: How the Premier League table looks now - Everton move up to 15th

What were the reasons behind the decision?

The appeal board's summary said Everton relied on nine grounds of appeal against the initial 10-point sanction, seven of which related to how the original commission dealt with various mitigating and aggravating factors.

Those seven were dismissed but the appeal board did conclude on the other two grounds that the original commission made legal errors.

The appeal board found the original commission was wrong in finding Everton had been "less than frank" in relation to what they told the Premier League about debt linked to their new stadium, and finding that in being so the club had breached a league rule requiring an obligation to act in utmost good faith.

The Independent Appeal Board's verdict on reducing Everton's 10-point deduction.
Image: The Independent Appeal Board's verdict on reducing Everton's 10-point deduction

While Everton's representations regarding the stadium were found to be materially wrong, it was not the Premier League's case that that was anything other than an innocent mistake.

The appeal board also found it was wrong of the commission not to take into account available benchmarks for sanction, such as EFL guidelines.

What was Everton's reaction?

An Everton statement read: "While the club is still digesting the Appeal Board's decision, we are satisfied our appeal has resulted in a reduction in the points sanction.

"The club is also particularly pleased with the Appeal Board's decision to overturn the original Commission's finding that the club failed to act in utmost good faith. That decision, along with reducing the points deduction, was an incredibly important point of principle for the club on appeal. The club, therefore, feels vindicated in pursuing its appeal.

"Notwithstanding the Appeal Board's decision, and the positive outcome, the club remains fully committed to cooperating with the Premier League in respect of the ongoing proceedings brought for the accounting period ending in June 2023."

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Luton manager Rob Edwards say that Everton's ruling does not change the situation that much for his own club as they still remain in the bottom three but does says it adds a little more clarity to the Premier League table

A Premier League statement added: "This revised sanction has immediate effect and the Premier League table will be updated today to reflect this.

"The Premier League Board is satisfied with today's decision and that the independent disciplinary process, clearly set out in its Rules and agreed by all clubs, has been followed throughout."

What happened with the original deduction and why?

Everton were deducted 10 points with immediate effect in November for a breach of the Premier League's Profit and Sustainability Rules.

The points deduction was the largest in Premier League history and plunged Sean Dyche's team into the relegation zone.

The league's rules say that over a three-year cycle, a club must not lose more than £105m. An independent commission determined that "Everton's PSR calculation for the relevant period resulted in a loss of £124.5m".

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After the Premier League bought charges against Everton and Nottingham Forest for breach of financial rules, Sky Sports News' chief news reporter Kaveh Solhekol explained the process and what could happen next

According to the Premier League, Everton admitted during a five-day hearing they were in breach of the rules.

The club said at the time that they were "shocked and disappointed" by the ruling and lodged an appeal against the points deduction in December.

"Both the harshness and severity of the sanction imposed are neither a fair nor a reasonable reflection of the evidence submitted," said the club.

What happens next?

The process regarding the charge against brought against Everton for breaching PSR rules for the assessment period ending 2021/22 is complete, with the appeal reducing their points deduction from 10 to six and the club saying it is satisfied with the decision.

However, there is more to this story to come.

Everton have also been charged with breaking the PSR rules for a second time, for the assessment period ending with the 2022/23 season.

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After Everton's original points deduction in November, Sky Sports News' Kaveh Solhekol answered all the key questions

Nottingham Forest were also charged with a similar breach for this period.

Their cases have now been referred to the chair of the judicial panel, who will appoint separate, independent commissions to determine the appropriate sanction.

Those hearings must be completed by April 5. The clubs then have seven days to appeal.

The appeals must be concluded by May 24 - five days after the Premier League season ends.

'The whole process starts again'

Sky Sports News chief reporter Kaveh Solhekol:

"The whole process now has to start again with two separate commissions, one for Everton and one for Nottingham Forest as well.

"Then they will have the right to appeal any decision and then an appeal panel would have to be set up, but the Premier League are insistent that this all needs to be done within three or four days after the end of the season.

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Nottingham Forest head coach Nuno Espirito Santo says his focus is preparing his team for Premier League matches and not to be distracted by talk of a possible points deduction

"So, we are still heading for a situation where we could have games on the final day of the season and we won't be sure what the bottom of the Premier League looks like because we won't have had the final decisions about these possible points deductions for Everton and Nottingham Forest.

"If the benchmark has now been set of a six-point penalty if you break these financial rules, then Forest drop down into the relegation zone.

"It's a very confusing picture but if the Premier League spoke in public about this, I'm sure they'd say that these are the rules agreed by the 20 Premier League clubs. They were all voted upon and that is what needs sticking to."

PSR explained: What limits clubs spending more?

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Sky Sports' Sam Blitz explains what the Premier League's Profit and Sustainability Rules are and how they affect clubs' ability to spend

In the simplest terms, when every Premier League team tots up their annual accounts, they can have made a loss no greater than £105m across the previous three seasons.

Clubs can only lose £15m of their own money across those three years. So that is no more than £15m extra on outgoings like transfer fees, player wages and, in a lot of clubs' cases, paying off former managers compared to their income from TV payments, season tickets, selling players and so on.

The other £90m of any £105m must be guaranteed by their owners buying up shares, known as 'secure funding', and essentially means bankrolling the club.

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