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Everton handed 4 points

bluebell

Well-Known
Member
The powers that be have reduced the point deduction to 6 effectively saving them from relegation
 
Luton right now:

fuck-this-fuck-that.gif
 
Ehhh fuck it, they were never going down anyway.

Does 6 points fit the punishment of the crime over 10 points? Who really knows, I don't think anyone does....just make it up as they go along like most other things. This appeal bollocks could be back and forth until the end of time, what if now Luton decide to launch some appeal if they go down by 2-3 points?
 
I thought they were due another deduction for failing again? So will they not use this as a precedent to deduct another 6 points? I'd assumed that was how it was going to work, anyway...
 
OK, here's my take (having read the detailed decision). This is a long post but it's much shorter than the 61-page decision.

Everton’s appeal was made on nine grounds, of which only two were accepted. In fact, the decision spends over 1/3 of its length systematically dismantling the other seven in a way which invokes the Simpsons’ “Stop, he’s already dead” meme.

On the two grounds that were upheld, the appeal board basically said two things:
  1. That the original commission had probably imposed a harsher penalty because they believed Everton had been “less than frank” in their submissions (i.e. that they had deliberately misled the PL). The appeal board held that it wasn’t for the commission to make this statement as the PL had not argued that this was the case. However, interestingly, in their commentary on the revised points penalty, the appeal board basically said Everton had deliberately misled the PL and that should be taken into account when determining the penalty. So they said the original commission should not have taken it into account, but then they, the appeal board, DID take it into account themselves. WTF?
  2. The commission did not pay enough attention to other schemes of sanction (e.g. the Football League’s more structured scheme of points deductions, the precedent of a 9 points deduction for insolvency). They then make great play of these rules when determining the revised sanction.
Their decision, though discussed in more detail than the original commission, still seems to pluck a figure out of the air. They basically seem to place great emphasis on an argument by Everton’s counsel that a read-across of the EFL rules would impose a 6-point penalty. He then went on to argue for mitigating factors. The appeal board held that the only mitigating factor was that the trend in Everton’s losses in the period was positive (i.e. the loss in 2021-22 was much lower than the previous two periods), but this shouldn’t be given a lot of weight as they had basically taken the piss for 2 years (when their adjusted losses were £58m and £53m – collectively over the £105m limit even before year 3) and then tried to rein it in during year 3 when they knew they were up the creek. They then added that the misleading information Everton submitted was an aggravating factor (even though they had said the original commission had erred by making the same statement). So 6 points it is.

And finally a point of procedure “Subject to the provisions of Section X of the PL Rules, this Decision is final and binding on the parties.” (para 232). No appeal.

So what does it mean for Everton (including their second case)?

Firstly, they are 4 points to the good, obviously.

Secondly, the decision only allows Everton some mitigation for “trend”, which is to say improvement in their financial situation. Coming into their next submission, for which they have been charged, they must again be over £105m. Given that the year that will have dropped out had a loss of £58m, this means their loss for 2022-23 must be at least £38m for them to be over £105m again. This is an increase over their loss for 2021-22 (c £13.5m) so the trend in their losses is going the wrong way – that means there should be no mitigation for a positive trend in their current case, because there isn’t one. So the penalty for 2022-23 could potentially be higher.

Assuming they haven’t made further misleading submissions (you would hope they would have learned their lesson) then the only way they should be looking at less than 6 points further deduction would be if they are not as far over the limit as they were last time (£19.5m).

So they could easily be back to a 10-point or more deduction by the time their second case is held.

Little nugget for anyone who remembers my “Everton waved their willies at the passers-by” rant about how they massively took the piss because the actual FFP target is to break-even and the £105m is just lattitude before you get done – it seems the appeal panel agreed with me (but they lacked my turn of phrase):

“It is less than prudent financial planning for a club to sail so close to the upper loss threshold for breach of £105m over a three-year PSR such that, as a result of circumstances arising in the ordinary course of conducting the business of professional football, that threshold is breached. That is particularly so given the scheme of the PSR which take account of several years loss on a rolling basis, which alleviates the effect of circumstances in the ordinary course of business being particularly adverse in (say) one year.” (para 95)

And again at para 226:

“We agree with the Commission that the main reason for the Club’s breach was that it did not manage its finances so as to operate within the generous threshold of making no more than £105m losses over the relevant period. It imprudently sailed close to the wind, in making very significant losses (of over £110m) before the final year of the relevant period and, given the ordinary commercial risks inherent in football in the PL, it was unable to avoid a PSR Calculation loss of well in excess of the upper loss threshold of £105m”

But what about City? What about CITY!!!!!!

Funny you should mention that, because there’s some stuff in this decision that ought to worry them. Here’s some quotes from the decision that may have a bearing on City’s case.

Firstly, it is alluded to (I’m sure this refers to City, not Forest, due to the timeframe mentioned):

“It is noteworthy that the evidence before the Commission was that, in the seven years of the PSR regime to Season 2021-22, only one other club may have breached the £105m threshold on the basis of its PSR Calculation – that is the matter which is still proceeding before a Commission – and only 8-9 clubs had gone over the £15m threshold in Season 2021-22.” (para 140)

As we know, City have been obstructive in their case, and I have commented previously that this may bite them in the arse at a later date – the appeal committee agrees. The decision also makes great play of the fact that the Premier League is essentially a joint venture, in which the 20 shareholder clubs are investors. They all have a duty to each other to comply with investigations, not least because a failure to do so means the PL will have to incur additional costs, to which the other 19 clubs will end up contributing (as the PL will have less money to pay out to them by way of media rights).

“We… are dealing with a regulatory scheme which forms part of a joint venture to which all PL clubs are a party, each of which has agreed to the standard of required conduct and the enforcement regime provided in the PL Rules. Because the PL is a joint venture, the costs of enforcement against one club inevitably falls on all the clubs by reducing the money available for distribution. In that context, we consider that the reasonable level of cooperation to be expected of clubs in respect of the PSR mechanics and process is relatively high. A club cannot plead cooperation at that level as a mitigating circumstance. Only where the level of cooperation is exceptional (i.e. above the level reasonably expected) would it be a mitigating circumstance. Where a club’s cooperation falls below that level, then that may be an aggravating circumstance.” (para 91)

For those thinking City will just get a fine…

“We have considered all available options, including a fine or some form of transfer ban, but we have no doubt that, leaving aside mitigating factors, any breach of rule E.51 (i.e. any PSR Calculation showing losses of over £105m over the relevant period) warrants a points deduction, and nothing less than a points deduction. The unfair advantage achieved by a breach may include a financial advantage over other clubs, but it is most immediately a sporting advantage and consequently the sanction for breach can legitimately focus on sporting disadvantage. We accept that other available sanctions (such as a transfer embargo and even, because of the inextricable link between finance and sporting achievement, a fine) may be “sporting sanctions” in the sense that an aim or potential effect is to apply a sporting disadvantage to the relevant club. However, we agree with the Commission that, leaving any mitigation aside, only a points deduction is appropriate for a breach of rule E.51.” (paras 201-202)

We do not consider that a fine would be appropriate. A fine may have little impact on a club with a wealthy owner. It is also inherently less suitable to sanction a failure to spend within means with a simple additional debt, without anchoring the sanction more closely to the integrity of the competition, in both sporting and financial terms; and to addressing the impact on the aims of equal treatment under the PL Rules.” (para 203)

TLDR – break the rules, you’re gonna lose points. Both the original commission and the appeal board agreed this was the right form of sanction, and it’s consistent with the EFL rules too.
 
OK, here's my take (having read the detailed decision). This is a long post but it's much shorter than the 61-page decision.

Everton’s appeal was made on nine grounds, of which only two were accepted. In fact, the decision spends over 1/3 of its length systematically dismantling the other seven in a way which invokes the Simpsons’ “Stop, he’s already dead” meme.

On the two grounds that were upheld, the appeal board basically said two things:
  1. That the original commission had probably imposed a harsher penalty because they believed Everton had been “less than frank” in their submissions (i.e. that they had deliberately misled the PL). The appeal board held that it wasn’t for the commission to make this statement as the PL had not argued that this was the case. However, interestingly, in their commentary on the revised points penalty, the appeal board basically said Everton had deliberately misled the PL and that should be taken into account when determining the penalty. So they said the original commission should not have taken it into account, but then they, the appeal board, DID take it into account themselves. WTF?
  2. The commission did not pay enough attention to other schemes of sanction (e.g. the Football League’s more structured scheme of points deductions, the precedent of a 9 points deduction for insolvency). They then make great play of these rules when determining the revised sanction.
Their decision, though discussed in more detail than the original commission, still seems to pluck a figure out of the air. They basically seem to place great emphasis on an argument by Everton’s counsel that a read-across of the EFL rules would impose a 6-point penalty. He then went on to argue for mitigating factors. The appeal board held that the only mitigating factor was that the trend in Everton’s losses in the period was positive (i.e. the loss in 2021-22 was much lower than the previous two periods), but this shouldn’t be given a lot of weight as they had basically taken the piss for 2 years (when their adjusted losses were £58m and £53m – collectively over the £105m limit even before year 3) and then tried to rein it in during year 3 when they knew they were up the creek. They then added that the misleading information Everton submitted was an aggravating factor (even though they had said the original commission had erred by making the same statement). So 6 points it is.

And finally a point of procedure “Subject to the provisions of Section X of the PL Rules, this Decision is final and binding on the parties.” (para 232). No appeal.

So what does it mean for Everton (including their second case)?

Firstly, they are 4 points to the good, obviously.

Secondly, the decision only allows Everton some mitigation for “trend”, which is to say improvement in their financial situation. Coming into their next submission, for which they have been charged, they must again be over £105m. Given that the year that will have dropped out had a loss of £58m, this means their loss for 2022-23 must be at least £38m for them to be over £105m again. This is an increase over their loss for 2021-22 (c £13.5m) so the trend in their losses is going the wrong way – that means there should be no mitigation for a positive trend in their current case, because there isn’t one. So the penalty for 2022-23 could potentially be higher.

Assuming they haven’t made further misleading submissions (you would hope they would have learned their lesson) then the only way they should be looking at less than 6 points further deduction would be if they are not as far over the limit as they were last time (£19.5m).

So they could easily be back to a 10-point or more deduction by the time their second case is held.

Little nugget for anyone who remembers my “Everton waved their willies at the passers-by” rant about how they massively took the piss because the actual FFP target is to break-even and the £105m is just lattitude before you get done – it seems the appeal panel agreed with me (but they lacked my turn of phrase):

“It is less than prudent financial planning for a club to sail so close to the upper loss threshold for breach of £105m over a three-year PSR such that, as a result of circumstances arising in the ordinary course of conducting the business of professional football, that threshold is breached. That is particularly so given the scheme of the PSR which take account of several years loss on a rolling basis, which alleviates the effect of circumstances in the ordinary course of business being particularly adverse in (say) one year.” (para 95)

And again at para 226:

“We agree with the Commission that the main reason for the Club’s breach was that it did not manage its finances so as to operate within the generous threshold of making no more than £105m losses over the relevant period. It imprudently sailed close to the wind, in making very significant losses (of over £110m) before the final year of the relevant period and, given the ordinary commercial risks inherent in football in the PL, it was unable to avoid a PSR Calculation loss of well in excess of the upper loss threshold of £105m”

But what about City? What about CITY!!!!!!

Funny you should mention that, because there’s some stuff in this decision that ought to worry them. Here’s some quotes from the decision that may have a bearing on City’s case.

Firstly, it is alluded to (I’m sure this refers to City, not Forest, due to the timeframe mentioned):

“It is noteworthy that the evidence before the Commission was that, in the seven years of the PSR regime to Season 2021-22, only one other club may have breached the £105m threshold on the basis of its PSR Calculation – that is the matter which is still proceeding before a Commission – and only 8-9 clubs had gone over the £15m threshold in Season 2021-22.” (para 140)

As we know, City have been obstructive in their case, and I have commented previously that this may bite them in the arse at a later date – the appeal committee agrees. The decision also makes great play of the fact that the Premier League is essentially a joint venture, in which the 20 shareholder clubs are investors. They all have a duty to each other to comply with investigations, not least because a failure to do so means the PL will have to incur additional costs, to which the other 19 clubs will end up contributing (as the PL will have less money to pay out to them by way of media rights).

“We… are dealing with a regulatory scheme which forms part of a joint venture to which all PL clubs are a party, each of which has agreed to the standard of required conduct and the enforcement regime provided in the PL Rules. Because the PL is a joint venture, the costs of enforcement against one club inevitably falls on all the clubs by reducing the money available for distribution. In that context, we consider that the reasonable level of cooperation to be expected of clubs in respect of the PSR mechanics and process is relatively high. A club cannot plead cooperation at that level as a mitigating circumstance. Only where the level of cooperation is exceptional (i.e. above the level reasonably expected) would it be a mitigating circumstance. Where a club’s cooperation falls below that level, then that may be an aggravating circumstance.” (para 91)

For those thinking City will just get a fine…

“We have considered all available options, including a fine or some form of transfer ban, but we have no doubt that, leaving aside mitigating factors, any breach of rule E.51 (i.e. any PSR Calculation showing losses of over £105m over the relevant period) warrants a points deduction, and nothing less than a points deduction. The unfair advantage achieved by a breach may include a financial advantage over other clubs, but it is most immediately a sporting advantage and consequently the sanction for breach can legitimately focus on sporting disadvantage. We accept that other available sanctions (such as a transfer embargo and even, because of the inextricable link between finance and sporting achievement, a fine) may be “sporting sanctions” in the sense that an aim or potential effect is to apply a sporting disadvantage to the relevant club. However, we agree with the Commission that, leaving any mitigation aside, only a points deduction is appropriate for a breach of rule E.51.” (paras 201-202)

We do not consider that a fine would be appropriate. A fine may have little impact on a club with a wealthy owner. It is also inherently less suitable to sanction a failure to spend within means with a simple additional debt, without anchoring the sanction more closely to the integrity of the competition, in both sporting and financial terms; and to addressing the impact on the aims of equal treatment under the PL Rules.” (para 203)

TLDR – break the rules, you’re gonna lose points. Both the original commission and the appeal board agreed this was the right form of sanction, and it’s consistent with the EFL rules too.

We must finish above Arsenal is what I'm reading. Because they aren't going to go back and strip City of previous titles but they very well may deduct them points this season.

(Not that I actually believe either will actually happen.)
 
We must finish above Arsenal is what I'm reading. Because they aren't going to go back and strip City of previous titles but they very well may deduct them points this season.

(Not that I actually believe either will actually happen.)
No chance City will get a points deduction this season, next season at the very earliest and probably beyond that given how complex their case is. We need to get more points than everyone this year, but we don't need to worry about the PL taking points off us.
 
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