Which is why I said "try".
Football Finance
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Luxury tax has been what I've favored for a while. Let the spending continue but make it cost more and share the proceeds with smaller clubs throughout the pyramid.
Sorry, I was going from memory yesterday. I've had a look at the PL rules now and done a bit of research. The outcome is... interesting.
After the appeal hearing, there is an allowance for arbitration on certain limited grounds (broadly the commission over-stepped or was biased). So within PL procedures, there isn't technically scope for "appeal". In this context, the final para of the Everton appeal decision says that the decision is "final and binding", subject to the arbitration process.
To answer your 2:1 point, the process allows for City and PL to each appoint one arbitrator. Those two then have to agree to a third person to join the panel - this is where City tipped the scales in the UEFA CAS hearing because the UEFA appointee wasn't strong enough to resist the appointment of a biased appointee. The PL will need to be very careful in who they appoint - it will need to be a strong-willed individual who will resist this. If they are at a deadlock, the board of directors of the Premier League will make the appointment.
THIS IS THE INTERESTING BIT....
I've also seen some commentary online (from proper press sources) suggesting they WON'T be able to appeal to CAS. Apparently, CAS rules won't allow appeals against "decisions against which an appeal to an independent and duly constituted arbitration tribunal recognised under the rules of an Association or Confederation may be made."
That suggests that, whilst City could theoretically appeal to CAS, CAS is likely to deny they have jurisdiction to hear that appeal. City's argument would then have to be that the arbitration panel is a "kangaroo court", or else that the scope of its investigatory powers are not wide enough to allow it to fall into the CAS exception, giving CAS jurisdiction to hear the appeal.
They may get relegated
Everton deducted two points for second breach of Premier League financial rules
Last updated on34 minutes ago34 minutes ago.From the sectionEverton2032
The 2024-25 season is scheduled to be Everton's final year at Goodison Park, their home since 1892, before they move to a new stadium at Bramley-Moore Dock
Everton have been deducted two points for a second breach of Premier League financial rules.
Profit and sustainability rules (PSR) permit clubs to lose £105m over three years and an independent commission found Everton breached that by £16.6m for the three-year period to 2022-23.
They drop one place to 16th and are now two points above the relegation zone.
The Toffees had a 10-point deduction reduced to six on appeal in February for the three-year period to 2021-22.
Everton say the club will appeal against the decision.
The Merseyside club could yet face a further points deduction in relation to interest costs associated with the building of the club's new stadium at Bramley-Moore Dock, though that issue is unlikely to be resolved before the end of the season.
In its written reasons the independent commission said the Premier League had asked for a five-point deduction for the club.
The commission decided that any breach of PSR justifies a three-point deduction, with an additional two points because Everton's breach of £16.6m - 15.8% above the £105m threshold - is deemed significant.
However, the commission accepted Everton's arguments for mitigation in relation to the fact the club has:
The commission concluded that the fact Everton have already been punished this season "for losses in years which overlap with the years at issue in these proceedings" merits a two-point reduction in punishment, with a further point for the loss of sponsorship revenue and early admission of guilt.
- Already been deducted points this season
- Suffered a loss of revenue because of the suspension of a sponsorship deal with Russian company USM
- Made an early admission of guilt
It also said that the club and league remain in dispute over costs related to the new stadium - with the Premier League saying these costs should count as PSR losses, while Everton argue they should be excluded and have capitalised them on their latest audited accounts.
The same independent commission will meet to decide the issue at a later date and, if it agrees with the Premier League, could issue further punishment.
However, the commission said this issue cannot be dealt with using the expediated PSR process introduced this season so is unlikely to be resolved before the end of the campaign.
An Everton statement read: "While the club's position has been that no further sanction was appropriate, the club is pleased to see that the commission has given credit to the majority of the issues raised by the club, including the concept of double punishment, the significant mitigating circumstances facing the club due to the war in Ukraine, and the high level of co-operation and early admission of the club's breach."
The Toffees added that the club is "extremely concerned" at the "inconsistency" of the punishments, with four different commissions issuing four different points deductions this season.
The Premier League said the independent commission "reaffirmed the principle that any breach of the PSRs is significant and justifies, indeed requires, a sporting sanction".
Nottingham Forest are the other Premier League club to have been charged with PSR breaches this season and were docked four points in March, although they have lodged an appeal.
Championship club Leicester have also been charged by the Premier League for allegedly breaking spending rules during their last three seasons in the top flight.
There is no guarantee that Everton's appeal will be heard before the final games of the Premier League season on 19 May when Everton travel to Arsenal.
The 2023-24 season technically remains 'live' until the annual general meeting in June when relegated clubs transfer their certificates and 24 May has been selected as a 'backstop date' for the appeals process to be concluded.
Everton in transition
This second deduction comes at a time of significant uncertainty at Everton.
The club released their accounts covering the 2022-23 season on 31 March, reporting financial losses of £89.1m.
In September, owner Farhad Moshiri agreed to sell his 94% stake in the club to American investment fund 777 Partners. The takeover is going through the regulatory processes and the club is still awaiting for that to be approved by the Premier League.
Everton are also in the process of building a new stadium on the banks of the River Mersey at Bramley-Moore Dock, which is due to open in late 2024.
Giving evidence to the independent commission, Kevin Thelwell, Everton's director of football, said the club was already changing and moving away from its previous business model towards a more sustainable recruitment strategy, but added that "it's a big old ship to turn round".
What are the financial rules?
The PSRs are aimed at promoting financial stability within the Premier League.
They were introduced in 2015-16 although the demand to protect clubs from overspending can be traced back to Portsmouth, who in 2010 became the first - and so far only - Premier League club to go into administration after failing to find a buyer who would pay off spiralling debts of about £60m.
Current rules limit the losses clubs are allowed to make, although the figure can be inflated by external owner-driven funding.
However, the rules are due to be switched so, like Uefa, spending is linked to turnover.
Opponents of the rules argue they prevent significant investment from wealthy backers and, by definition, maintain the status quo of the biggest clubs remaining the richest and most successful.
Timeline guide to Everton cases
24 March 2023: Premier League refers Everton to independent commission over alleged breach of financial fair play rules for the three-year accounting period ending with the 2021-22 season.
17 November 2023: Everton receive an immediate 10-point deduction after being found to have breached the Premier League's financial rules.
15 January: Everton and Nottingham Forest are charged for breaches of the league's profit and sustainability rules. The hearing has to be concluded within 12 weeks of this date, which is 8 April.
26 February: Everton's first penalty for breaching Premier League financial rules is reduced from 10 points to six after an appeal.
25 March: Hearing for Everton's second charge, relating to three-year accounting period ending in 2022-23, takes place this week.
8 April: Everton receive second points deduction of two points.
19 May: The final day of the Premier League season, when Everton visit Arsenal (16:00 BST).
24 May: The latest possible date for an appeal hearing to be concluded.
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Just wondering, how many clubs have taken decisions to CAS before? i can’t remember too many apart from City.
With the PL I don't think they can go to CAS. I've commented on this elsewhere (I think earlier in this thread) that CAS won't review decisions where the original governing body has a suitable, independent arbitration process. It looks like the PL has this (or certainly they've created a process so as to qualify). The Everton appeal decision stated that it was binding on the parties, subject to... and then referred to the arbitration section of the rules. Which is to say it assumes there would be no appeal to CAS.
So I think, for an EPL club, the only time you can go to CAS is for a UEFA decision (which is what City did), or if you're given specific leave to appeal (which I think an appeals board wouldn't grant), or possibly if you wanted to argue the PL'arbitration process wasn't adequate so as to preclude an appeal to CAS.
OK, I've read over the Everton decision. There's a lot of detailed chatter on various points but the key summary is as follows:
1. They were given an initial sanction of 3 points for breaching the £105m limit - the commission argues this is consistent with their first hearing and the Forest decision (although notably there is a lot of criticism of the Forest decision and this commission makes no excuses about departing from it - that could make Forest's appeal... interesting)
2. They are sanctioned a further two points for the extent of the breach - quantified at £16m in this decision
3. They are given 2 points mitigation for double jeopardy (which I think is bullshit)
4. They are given a further 1 point reduction for loss of the USM Finch Farm sponsorship and early admission of guilt (but the PL is scathing about their co-operation).
Point 1 seems OK.
Point 2, the basic calculation was that it was 1 point per £6.5m breach in the original decision, and the breach here is lower so just the two points. BUT - the PL alleges inappropriate treatment of some interest costs. The commission bottled this issue, kicking the can down the road. If they had dealt with it and held in favour of the PL, there could have been a further 2-3 points sanction. This is the part of the decision that makes me angry. The commission flat out bottled it and by delaying the decision, they will potentially save Everton this season, pushing their further points penalty back into next year when they could potential survive again.
Point 3 - linked slightly to point 2. Everton are being penalised in 2023-24 - 6 points for 2021-22, 2 points (should be more) for 2022-23. If either of those penalties had been applied in the seasons where the offences took place, they would have been relegated. The idea that they should get a reduced penalty because they would otherwise be more at risk of relegation is perverse. The idea that 2 of the 3 loss-making years are included in two calculations and therefore should be mitigated is also perverse. They are in trouble again this year because they lost £63m in 2022-23, not because they lost £59m in the previous two years. Double jeopardy my arse. As the PL said, they knew they needed to be cautious, and they weren't.
4. I'd have some sympathy on this one if the Finch Farm deal wasn't so ridiculously overpriced in the first place - £20m? Get to fuck. £5m tops. If it were worth £20m, they'd have had no trouble finding a new deal at £10m from someone else. They didn't, because it's worth fuck all.
A final point to note on this decision, and also the previous one plus Forest - the PL don't half go after the clubs. They are their Counsels do not fuck around with the charges they bring, the penalties they recommend and the way they brutally call out any evidence which has the slightest whiff of bullshit. Anyone thinking they are going to tickle City's tummies has not been paying attention.
1. They were given an initial sanction of 3 points for breaching the £105m limit - the commission argues this is consistent with their first hearing and the Forest decision (although notably there is a lot of criticism of the Forest decision and this commission makes no excuses about departing from it - that could make Forest's appeal... interesting)
2. They are sanctioned a further two points for the extent of the breach - quantified at £16m in this decision
3. They are given 2 points mitigation for double jeopardy (which I think is bullshit)
4. They are given a further 1 point reduction for loss of the USM Finch Farm sponsorship and early admission of guilt (but the PL is scathing about their co-operation).
Point 1 seems OK.
Point 2, the basic calculation was that it was 1 point per £6.5m breach in the original decision, and the breach here is lower so just the two points. BUT - the PL alleges inappropriate treatment of some interest costs. The commission bottled this issue, kicking the can down the road. If they had dealt with it and held in favour of the PL, there could have been a further 2-3 points sanction. This is the part of the decision that makes me angry. The commission flat out bottled it and by delaying the decision, they will potentially save Everton this season, pushing their further points penalty back into next year when they could potential survive again.
Point 3 - linked slightly to point 2. Everton are being penalised in 2023-24 - 6 points for 2021-22, 2 points (should be more) for 2022-23. If either of those penalties had been applied in the seasons where the offences took place, they would have been relegated. The idea that they should get a reduced penalty because they would otherwise be more at risk of relegation is perverse. The idea that 2 of the 3 loss-making years are included in two calculations and therefore should be mitigated is also perverse. They are in trouble again this year because they lost £63m in 2022-23, not because they lost £59m in the previous two years. Double jeopardy my arse. As the PL said, they knew they needed to be cautious, and they weren't.
4. I'd have some sympathy on this one if the Finch Farm deal wasn't so ridiculously overpriced in the first place - £20m? Get to fuck. £5m tops. If it were worth £20m, they'd have had no trouble finding a new deal at £10m from someone else. They didn't, because it's worth fuck all.
A final point to note on this decision, and also the previous one plus Forest - the PL don't half go after the clubs. They are their Counsels do not fuck around with the charges they bring, the penalties they recommend and the way they brutally call out any evidence which has the slightest whiff of bullshit. Anyone thinking they are going to tickle City's tummies has not been paying attention.
Meh.. by the time the PL bring 115 FC to the independent hearing, the clubs will have voted through the "luxury tax".
At which point, I'll stop watching the PL.
Oh please don't even place the slightest bit of hope in this. 4-0 to Arsenal with DCL heading it in his own net for a hat trick if we're still in with a shout.
Read almost all of it.
Everton are appealing the decision - if the PL suggested a higher penalty and this was not handed out, can they, themselves, appeal the decision?
Yes. The PL can challenge a ruling if they consider the sanction to be too lenient. In this case I don't think they would, The commission agreed to the 5 point penalty, but then allowed mitigation to reduce it.
But I'd still expect the PL to argue hard in the appeal case, and it's not impossible that an appeals commission could increase the penalty, although I doubt they will.
I think they're wary of appealing, and I think rightly so. As I said above, they have really gone after the clubs in the hearings, which I think is them fulfilling their duty to the rest of the league. Genuinely, reading these decisions, I would be pissed off at the PL's approach if I were the defending club, so I think the other clubs in the League wouldn't have cause to complain that the PL hadn't held the defendants' feet to the fire.
But if they appeal against decisions by the commissions then they risk calling into question the independence of those commissions - i.e. the defending clubs will accuse them of not respecting their own process. And I think it's important that the PL stands behind the process (and is seen to do so).
Very wise words. Yes, that makes a lot of sense unfortunately.
another nail in the coffin
Lot of chatter about the 777 takeover of the Blueshite. In summary:
PL has approved in principle but want 777 to deposit £60m in escrow as surety for the stadium and also to convert their existing loan to equity (practically eliminating the chance of the getting that money back).
Everton looking to delay a repayment on other debt due on Monday.
777 wanted to complete this week, now saying “end of next month” (ie when they know about relegation).
Not looking good for them.
PL has approved in principle but want 777 to deposit £60m in escrow as surety for the stadium and also to convert their existing loan to equity (practically eliminating the chance of the getting that money back).
Everton looking to delay a repayment on other debt due on Monday.
777 wanted to complete this week, now saying “end of next month” (ie when they know about relegation).
Not looking good for them.
I wish the premiere league would do one charge at a time rather than all 115 at once.
Deduct 10 points this week, then 15 the next, maybe just a 5 point deduction the following week.
Let the fuckers at City appeal one after another over 115 weeks while playing in League 1.
Or just 2 points docked after every win. So that they'll just get the 1 every weekend for a year.
This is a technical post, so not for everyone. Upshot of it is that I think Everton's (group) accounts are wrong, so I believe the Premier League's outstanding query (that the last commission kicked down the road) should be upheld, and they should be subject to further sanction (3-4 points, based on the penalty structure in the decision). If you're not accounting-minded, stop reading here.
In summary, Everton took on a load of debt from third-party lenders, incurring interest. From looking at their accounts, they haven't paid most of this interest as yet, it has just been added to the outstanding loan balance - this is not uncommon, commercially speaking. In the first PSR hearing, they tried to argue they should have been allowed to adjust the interest out as the debt related to the stadium construction and therefore they could have added the interest to the capital spend on the ground, rather than putting it through their P&L (increasing their losses) which was what they actually did. The original hearing put forward evidence that proved that the debt didn't relate directly to the stadium (including Everton's own statements that the stadium was funded by Moshiri's loans), and therefore the interest could not have been added to the capital cost. The PL continue to contend that this is the case, and I think they are right to do so.
Everton are building the new ground through a subsidiary company, Everton Stadium Development Limited ("ESDL"). They are funding this by lending money from Everton FC to ESDL. Initially, the loan was treated as interest-free. Subsequently, they decided to re-charge the interest from Everton FC to ESDL. Then in ESDL's books, they have added the interest cost to the capital cost of the stadium. To be clear, ESDL is borrowing the money to build the stadium, so in its books it's totally OK to add the interest cost to the capital cost of the stadium.
However, where I think the accounts are wrong, is that when they aggregate the results of Everton FC and all its subsidiaries, including ESDL, they should adjust the interest back into the profit and loss account, increasing their accounting losses and the amount they report for PSR. This is on the basis that they should be reporting their debt with third parties on the same basis as if they had not created the inter-company transaction. The basic principle of group accounts is that you prepare them as if the results of the group had all been incurred by the reporting company directly. That's not what they've presented.
So in summary, they've created an accounting trick which is fine in the results of all of the individual companies involved, but I believe their group accounts are wrong, and that they have understated their losses as a result.
In summary, Everton took on a load of debt from third-party lenders, incurring interest. From looking at their accounts, they haven't paid most of this interest as yet, it has just been added to the outstanding loan balance - this is not uncommon, commercially speaking. In the first PSR hearing, they tried to argue they should have been allowed to adjust the interest out as the debt related to the stadium construction and therefore they could have added the interest to the capital spend on the ground, rather than putting it through their P&L (increasing their losses) which was what they actually did. The original hearing put forward evidence that proved that the debt didn't relate directly to the stadium (including Everton's own statements that the stadium was funded by Moshiri's loans), and therefore the interest could not have been added to the capital cost. The PL continue to contend that this is the case, and I think they are right to do so.
Everton are building the new ground through a subsidiary company, Everton Stadium Development Limited ("ESDL"). They are funding this by lending money from Everton FC to ESDL. Initially, the loan was treated as interest-free. Subsequently, they decided to re-charge the interest from Everton FC to ESDL. Then in ESDL's books, they have added the interest cost to the capital cost of the stadium. To be clear, ESDL is borrowing the money to build the stadium, so in its books it's totally OK to add the interest cost to the capital cost of the stadium.
However, where I think the accounts are wrong, is that when they aggregate the results of Everton FC and all its subsidiaries, including ESDL, they should adjust the interest back into the profit and loss account, increasing their accounting losses and the amount they report for PSR. This is on the basis that they should be reporting their debt with third parties on the same basis as if they had not created the inter-company transaction. The basic principle of group accounts is that you prepare them as if the results of the group had all been incurred by the reporting company directly. That's not what they've presented.
So in summary, they've created an accounting trick which is fine in the results of all of the individual companies involved, but I believe their group accounts are wrong, and that they have understated their losses as a result.
Relegate the cheating cunts.
But will the Premier League do anything about it now, or just accept the outcome from the hearing?
The hearing refused to rule and said it would be subject to another hearing. The matter hasn't been dropped and I don't think the PL will drop it.
But that additional hearing might not happen until next season, by which time it could be academic. The point being that if any sanction is handed out next season which would have seen them relegated this year, then there's yet another can of worms to open.
This is the relevant extract from the decision:
17. However, by reason of the PL’s application to amend its Complaint, and the overlap between the PL’s proposed amendments (in relation to the interest capitalised in FY23) and the factual and expert issues which arise in relation to the £6,561,000 capitalised retrospectively, the Commission decided to bifurcate these disciplinary proceedings.
18. These proceedings will therefore be resolved in two stages.
