Everton’s 10-point penalty will send’shockwaves’ through Leeds United as they consider a move. The Toffees were docked ten points for violating the Premier League’s financial regulations.
According to a leading sports law expert, Everton’s unprecedented 10-point penalty for breaking the Premier League’s financial rules will send “shockwaves” through Chelsea and Manchester City.
Leeds United are reportedly moving forward with their intention to sue Everton after the club was found guilty of violating the Premier League’s financial rules. The Whites are one of three clubs planning to sue the Toffees, who have been docked 10 points for a significant breach of financial fair play.
An independent commission fined the Toffees £19.5 million for exceeding the permitted profit and sustainability rules (PSR). The maximum allowed over a three-year period is £105 million. The club has filed an appeal against the sanction, but Simon Leaf, partner and head of sport at law firm Mishcon de Reya, believes it has already sent a strong message ahead of other cases that are set to be heard.
Manchester City is facing over 100 charges after allegedly breaking the rules for the past nine seasons by failing to provide accurate financial information. The city has always vehemently denied any wrongdoing.
The Premier League is also looking into Chelsea after their new owners discovered “potentially incomplete financial reporting” linked to the Roman Abramovich era while conducting due diligence for the takeover last summer and self-reported the information to the league and other regulators.
“This is a landmark moment in the history of the Premier League and one of its most famous clubs and will cause shockwaves – particularly in the boardrooms of Chelsea and Manchester City,” Leaf said in a statement. “This is the first time in Premier League history that a points deduction has been imposed for a violation of its P&S Rules/FFP.”
“A number of exceptions have been introduced that allow clubs to incur greater losses, such as infrastructure investments, which are certainly relevant to Everton, given their new stadium that is under construction.”
“The pandemic is another contentious issue.” At the start of the pandemic, the Premier League issued somewhat ambiguous exceptions to the P&S/FFP Rules in recognition of the additional losses that were likely to arise, including the loss of matchday income and the potential loss of transfer fees due to the collapse of the transfer market.
“It is the wording of these exceptions, in particular, that no doubt the Premier League and Everton’s lawyers have clashed over; with the latter arguing that greater leeway should have been afforded to the club.”
However, Everton’s appeal, as well as the existence of potential grey areas in the wording of regulations, means that the situation is not yet set in stone.
“This is almost certainly not the end of the story,” Mishcon de Reya senior sports lawyer Tom Murray said. “However, the club must act quickly.” Everton has only seven days under the new rules to submit its case for the appeal, which is not much time given the amount of work involved. Following that, any further appeals would have to be heard by a separate arbitrator and would be permitted only on very limited grounds.”
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