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On 27/01/2024 at 12:15, Matt said:

Doesn't exist mate and he won't be able to paste the link anyway :P

Not sure how else to break it down for you, Palfy, unless you're just bored and are trolling a bit. Under the leagues supervision, we were operating within the limits. Then, during the project, when loans and contracts where all in place they changed the rules and said now we're not. So we must acknowledge and accept that we broke the current rules, because we did. However we only did so because those rules were changed by the people who had signed off on everything mid process.

Last attempt at an analogy...

Ref blows for kick-off, each side knows which goal is theirs. Then, during an attack we're through on goal, all the while the linesman and ref waving advantage and letting the attack continue. We end up scoring but the ref awards the goal as an own goal against. We weren't informed that the ends had changed mid attack, we had officials waving us on saying its all OK. But the 4th official has told the ref to give it as an own goal because they'd decided it'd be best for the game to update the rules mid match and not really explain why or how. So, despite us going along with what we were initially told, being encouraged by the officials effectively by them waving us on, we end up losing the game and it's that we are appealing. They literally moved the goal posts.

Personally I'd be taking the league to court.

Thought of a better analogy @Palfy, let me know if you want to hear it.

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14 minutes ago, Romey 1878 said:

Incidentally, he’s said he thinks the points deduction could be reduced significantly with the appeal. 

Aka masters has told him that they will recommend it's gonna be cut cos they are starting to shit themselves.  

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6 minutes ago, Romey 1878 said:

Well we'll find out soon enough.

Aye. The consequences really are not that different to what we have now, in regards to the rich clubs bankrolling massive transfers, so a change would be positive. But if its decided to go that way, it shows that the league is incompetent and indecisive, so how are clubs supposed to trust what they're told?

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7 hours ago, London Blue said:

I can't see how we don't get our 10 points back, and an amnesty for clubs, given the impending change in rules. 

They have accepted the current rules are unworkable and have to change.

The only thing that makes our club look well run is the Premier League.

If the people leading the prosecution suddenly hold their hands up and say "what we've got up until now we've made up as we went along, even signing off on the defendants transfers for years on their request and we accept that it's not clear how to fix our system. But we're going to continue the trial for this defendant, who have been open and forthcoming against those rules, because... Well, just because". What would a judge/jury make of that?

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1 hour ago, Matt said:

If the people leading the prosecution suddenly hold their hands up and say "what we've got up until now we've made up as we went along, even signing off on the defendants transfers for years on their request and we accept that it's not clear how to fix our system. But we're going to continue the trial for this defendant, who have been open and forthcoming against those rules, because... Well, just because". What would a judge/jury make of that?

Judges are very independent (although they operate within certain boundaries) a Judge would almost certainly publicly criticise the prosecution, investigators and write a damming letter to the secretary of state responsible for the authorities, requesting a review into how this shit show got started. 

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13 minutes ago, London Blue said:

Judges are very independent (although they operate within certain boundaries) a Judge would almost certainly publicly criticise the prosecution, investigators and write a damming letter to the secretary of state responsible for the authorities, requesting a review into how this shit show got started. 

So basically throw the book at the incompetence of the league?

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1 minute ago, duncanmckenzieismagic said:

Everton’s appeal: The state of play and the key arguments they need to win

LIVERPOOL, ENGLAND - FEBRUARY 3: Fans of Everton hold up pieces of paper with a message on in protest against the Premier League during of the Premier League match between Everton FC and Tottenham Hotspur at Goodison Park on February 3, 2024 in Liverpool, England. (Photo by Robbie Jay Barratt - AMA/Getty Images)

By Patrick Boyland

Feb 6, 2024

Everton are waiting anxiously to hear whether their appeal against a 10-point deduction for a breach of financial rules in 2021-22 has been successful.

 

Hit with the largest sporting sanction in Premier League history, the club’s case was heard by a newly convened commission last week with the evidence and arguments heard over a three-day period, finishing on Friday.

 

Ahead of the verdict, which is expected in the coming weeks, The Athletic looks at the club’s principal arguments, chances of success and what it all means for their second charge for breaching profit and sustainability (PSR) rules relating to 2022-23.

 

How the appeal process works

“It’s open to a party — in this case Everton — to challenge the imposition of a fixed penalty, the substantive decision of a commission or the level of compensation ordered,” says sports law barrister Samuel Cuthbert.

 

“In broad terms, the appellant sends the relevant forms to the chair of the Premier League’s judicial panel (Murray Rosen), who then appoints a new appeal board. The appeal board then gives notice to the parties of the hearing, typically following a directions hearing. The appeal board has an overriding discretion as to the manner in which the hearing is conducted.”

 

Everton announced their intention to appeal shortly after the publication of November’s verdict, calling the 10-point deduction “wholly unjust and disproportionate”. They added renowned KC Laurence Rabinowitz, an expert in commercial litigation, to their beefed-up legal team for the appeal.

 

“It is open to either party to apply for permission to adduce fresh evidence,” Cuthbert adds, “but those applications will only be granted if it can be shown that the evidence was not available to the party or couldn’t have been made available at the initial hearing. 

 

“The appeal board will then hear any new evidence and submissions from the parties. It has very wide powers to allow or dismiss an appeal, to vary a penalty or an order, to make further costs orders, to remit the matter back to the original commission, or to make such an order as it thinks fit.”

 

In other words, the outcome is entirely at their discretion.

 

go-deeper

GO DEEPER

 

Everton's 10-point deduction: Why is the sanction so steep and what does it mean for the Premier League?

 

The arguments Everton have to win

As part of a streamlined process, Everton were expected to focus on several key arguments:  

 

The “disproportionate” nature of the initial sanction, being the largest of its kind in Premier League history and greater than the previous penalties imposed upon clubs entering administration (nine points)

The lack of clear reasoning as to how the commission reached such a number and how it mirrored the Premier League’s suggested punishment

The lack of weight given to their points of mitigation, including their £760million ($954m) new stadium project, the impact of the war in Ukraine and their positive recent trend on football spend

“Everton admitted breach of PSR at the previous five-day hearing, though the extent of that breach remains in dispute,” Cuthbert says, with the club and the league around £10million apart in their respective calculations (the commission sided with the league at the first hearing). 

 

“It’s understood that they have, on appeal, taken issue with the harshness of the 10-point deduction imposed and the commission’s decision to dismiss several mitigating factors. Those mitigating factors include the loss of commercial deals connected to the now-sanctioned Alisher Usmanov and also the argument that interest payments on money borrowed to build the new stadium were permissible ‘add-backs’ for the 2020-21 financial year.

 

“Over the full accounting period in question, Everton accrued around £27m in interest costs. 

 

“Their position is that a 10-point deduction is not a fair or reasonable reflection of the evidence submitted. Naturally, the merits of that argument turn on the evidence and those outside the dispute don’t have access to that evidence.”

 

You can read a summary of those key arguments here, but one of the most significant developments since has been the criticism of the initial process by key political figures, including prominent Everton fan and Mayor of Greater Manchester Andy Burnham, Liverpool-supporting politicians Steve Rotheram and Ian Byrne and, most recently, Department for Culture, Media and Sport chairwoman Dame Caroline Dinenage.

 

 

Burnham has been vocal in his support of Everton (Joe Giddens/PA Images via Getty Images)

In October’s hearing, the commission heard how, on August 10 this year, five months after Everton’s case had been referred, league officials put forward what was described in the report as a “sanction policy”.

 

According to evidence supplied by Masters, the league proposed “a fixed starting point of a deduction of six points, with an increase from that starting point of one point for every £5m by which the club had exceeded the PSR threshold of £105m. Further adjustments could be made to reflect aggravating or mitigating features”.

 

The commission said it rejected this framework, but crucially, it still reached the same conclusion as the league: a 10-point penalty for an overspend of £19.5million.

 

The Athletic was told the aforementioned sanction framework was only meant to be used for Everton’s case. It is understood no such league-wide sanction policy is in the pipeline at the moment and that such a change would need to be communicated to clubs formally and via the league handbook.

 

The Premier League says it asked clubs in 2020 whether they wanted a fixed sanctions policy, something they rejected, and informed Everton of their intention to put forward such a recommendation two months before October’s hearing. 

 

There is a private acceptance from officials, though, that the framing of the report was ‘clunky’ and has prompted some of the backlash. The Athletic understands legal teams on all sides were given pre-sight of the final report and were allowed to recommend modifications before its publication.

 

In a letter to the Premier League, Dinenage wrote: “Equally puzzling was his (Premier League CEO Richard Masters’) insistence that the charges and punishment regime is entirely independent of the Premier League when there is documentary evidence of an attempt to move the goalposts with a proposal for a structured policy for sanctions. 

“If Mr Masters was a referee, the VAR control room may well now be having a word in his ear to look again at his evidence to the committee.”

A joint letter from prominent Everton supporters Mark Carney, the former governor of the Bank of England, trade unionist Sir Brendan Barber and former permanent Secretary for the Department for Digital, Culture, Media and Sport Dame Sue Owen called Everton’s punishment “draconian” and alleged a “lack of transparency” over how the 10-point deduction was calculated.

Premier League recruits extra legal help due to volume of ongoing cases

The debate over football spend — and why it’s important

Everton insist their breach was not due to football spend but costs associated with their new stadium project. 

 

In the absence of an external lender, they were largely forced to rely on interest-free loans from majority shareholder Farhad Moshiri to bankroll the scheme. 

 

Moshiri’s links to sanctioned individuals in Russia, such as Usmanov, made securing a funding partner much harder, while the war in Ukraine also saw some of his assets frozen. With his dwindling resources used to keep the project going, Everton increased debt through other lenders Rights and Media Funding (RMF) and Metro Bank to help with working capital.

 

They hoped to exclude interest costs for those loans in their PSR calculations but were not allowed to do so as they had originally been secured for the purposes of working capital. 

 

Everton’s argument was about ‘opportunity cost’; that without the stadium build, Moshiri would have been free to plug shortfalls elsewhere in the business and interest costs would not have been accrued. They secured a waiver from RMF which gave them permission to use their loan for stadium costs, but this was rejected by the league and the commission, with the latter finding that the club had been “less than frank” over the source of funding for the project. 

 

 

Moshiri watches from the directors’ box at Goodison Park last November (Peter Byrne/PA Images via Getty Images)

Everton originally defended their compliance but moved, in October, to a position where they admitted a breach on the basis that the Premier League would not allow some of these ‘add-backs’.

 

Why does all of this matter? Because Everton have been handed a hefty sporting sanction and the commission ruled that, albeit not deliberate, a sporting advantage had been incurred. 

 

“As to whether or not a sporting sanction was appropriate in this case, the view of the Premier League board, aligned with the EFL and endorsed by multiple decision-making bodies, is that a breach of PSR does confer a sporting advantage on the club concerned for which the only appropriate sanction is a sporting one in the form of a points deduction,” the Premier League said in a letter to Carney, Barber and Owen.

 

“Unfortunately, the Premier League had held concerns about the level of Everton’s transfer and salary outgoings for some time. These concerns were expressed to the club over many months and yet, despite those warnings, Everton continued to spend significantly on transfer fees and wages, whereas other clubs remained within the relevant threshold.”

 

The timing of the letter, published in The Times on the eve of Everton’s appeal hearing, caused surprise. Neither party is meant to speak publicly during the process or attempt to influence, but here the gloves appeared to come off. There have also been frustrations on both sides over perceived misinformation. 

 

Everton have been liaising with the league for a number of years in an attempt to ensure PSR compliance, going to officials for sign-off on deals (transfers and new contracts) and submitting to an informal salary cap. They sold Richarlison to Tottenham for £60m before the end of the 2022 financial year in an attempt to ensure their compliance and have engaged in a series of cost-cutting measures on the football side of their operation. 

 

Staff costs fell by £20m to £162m in 2021-22 and amortisation also dropped by £81.2m to £68.8m. From 2019 to January 2024 (including periods outside the 2022 calculations), their net spend on transfers was the second-lowest in the league behind Brighton. For 2021-22, they were also second-bottom.

 

 

Everton fans protest against the Premier League during the draw against Tottenham (Robbie Jay Barratt – AMA/Getty Images)

The picture painted was of a club scrambling to reduce costs and remain compliant after the early years of excess under Moshiri, some of which fell into this calculation. Moshiri’s own interventions during the first hearing were largely unhelpful, with the British-Iranian businessman declaring they had needed to replace a “non-existent midfield” during the 2020-21 season.

 

Staff costs fell, but their wage-to-turnover ratio, which is expected to replace PSR from 2024-25, has been problematic. Some would argue that it still is.

 

It is worth noting, as Everton point out, that “the outsourcing of the club’s retail and catering operations, which reduces turnover and costs in this area compared to other clubs who manage these functions in-house, also resulted in an artificially inflated wage-to-turnover ratio”.

 

Bad on-pitch performance, due to poor decision-making and attempts at cost-cutting, has led to a significant decrease in merit money, while the war in Ukraine led to sponsorship deals with Usmanov-linked companies being suspended indefinitely, further harming revenues. As with all clubs, the Covid pandemic hit gate receipts and, Everton believed, also contributed to a failure to sell unwanted players in the transfer market.

 

Everton and PSR - key financials

2018-19*

£188m

£160m

£95m

85

75

19-20

£186m

£165m

£99m

89

89

20-21

£193m

£183m

£81m

95

92

21-22

£181m

£162m

£68m

90

87

*Figures for 13-month accounting period

**Over 12 months, not including third-parties

Everton feel their figures clearly demonstrate a club that isn’t acting recklessly in its approach to wages and transfer spend. They had hoped their ongoing dialogue with the league would be taken into account as mitigation and believed they had fallen within the parameters specified by officials when it came to football costs.

 

But the league and the commission took a different view.

 

The commission said they had been “unwise” not to curtail spending, but did not believe it to be a “deliberate” disregard for the rules. Despite the commission finding that Everton had “engaged extensively” with the league, they did not find their conduct to have been of an exceptional enough nature to qualify as substantial mitigation.

 

These arguments are likely to have played out again this month, with the appointment of Rabinowitz, an expert in commercial litigation, indicating that they see this as a commercial dispute rather than a sporting one. If they can prove that, then they have a chance of, at the very least, reducing their sporting sanction.

 

Everton supporters have also asked for their own interests to be considered. Forwarded to the commission by Everton’s Fan Advisory Board with the help of barrister Matt Stanbury, their submissions focus on the desire, as detailed in the Fan-Led Review, for punishments to have minimal impact on fans.

 

 

Everton’s new stadium at Bramley Moore Dock (Christopher Furlong/Getty Images)

A West Ham case from 2007 was cited as a precedent. They were fined £5.5m instead of being docked points after illegally signing third-party players including Carlos Tevez, with a commission at the time ruling that players and fans “were in no way to blame for the situation”.

 

In Everton’s case, it is not Moshiri or an already departed board left bearing the brunt of years of chronic mismanagement. Former CEO Denise Barrett-Baxendale, who liaised with the league during the period in question, was asked to give evidence in the initial commission but did not attend. 

 

With Moshiri having agreed a takeover deal with 777 Partners and a sporting sanction imposed, others are now counting the cost.

So what next?

The outcome of the appeal is expected around the middle of February or by the end of the month at the very latest. 

 

That is likely to bring some form of closure, but there is one other avenue available to Everton should they require it. Premier League rules state that clubs unhappy with the appeals process can seek arbitration in exceptional circumstances, such as if they believe there to have been malpractice or procedural errors.

 

For that to happen, the identity of an independent arbiter would need to be agreed by both parties. 

 

Everton hope a successful outcome in this month’s appeal can also have a positive impact on their second charge for 2022-23, either reducing culpability or, less likely, leading to a full acquittal. 

 

“It’s also worth noting that the outcome of the appeal may also impact the second PSR charge Everton are facing, which was issued on January 15,” adds Cuthbert. “That complaint covers the assessment period ending with the 2022-23 season.”

Assessing Everton's PSR arguments: Is double jeopardy a valid defence?

 

(Top photo: Robbie Jay Barratt – AMA/Getty Images)

 

 

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4 minutes ago, Matt said:

Thanks. Just curious, could fans bring a civil lawsuit against the league? 

I don't know, I'm not sure what the grounds would be as the Premier League is a private company made up of its members the clubs. The clubs and the league make the rules, and there is no contract between the Premier League and the fans.

I imagine Everton certainly could, as could other clubs, affected but that would be very very messy and expensive due to legal fees.

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Just now, London Blue said:

I don't know, I'm not sure what the grounds would be as the Premier League is a private company made up of its members the clubs. The clubs and the league make the rules, and there is no contract between the Premier League and the fans.

I imagine Everton certainly could, as could other clubs, affected but that would be very very messy and expensive due to legal fees.

Citizens can take companies to court though right? Maybe civil lawsuit isn't the one I mean. But the risk to the city if the club does go bust/gets relegated due to unclear and  inconstant rules, also applied inconsistently, affects tens of thousands of peoples mental health and livelihoods. So contract or not, their incompetence is having direct harm.

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1 minute ago, Matt said:

Citizens can take companies to court though right? Maybe civil lawsuit isn't the one I mean. But the risk to the city if the club does go bust/gets relegated due to unclear and  inconstant rules, also applied inconsistently, affects tens of thousands of peoples mental health and livelihoods. So contract or not, their incompetence is having direct harm.

Maybe, but that would depend on being able to prove the PL either acted in bad faith or substantial mismanagement which affected the city. That would need for a court to rule on the ethacasy and management of the PL, which would be legally very complicated.

My knowledge of civil or commercial law is nowhere near my criminal law knowledge, maybe TT has a legal expert in its membership?

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2 minutes ago, London Blue said:

Maybe, but that would depend on being able to prove the PL either acted in bad faith or substantial mismanagement which affected the city. That would need for a court to rule on the ethacasy and management of the PL, which would be legally very complicated.

My knowledge of civil or commercial law is nowhere near my criminal law knowledge, maybe TT has a legal expert in its membership?

I would say signing off on everything then saying we broke the rules, never mind changing rules and dismissing unique factors, is mismanagement at the very least. The fact they've admitted they've made this approach up specifically for us is also mismanagement. I mean, at the very very least. 

 

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8 minutes ago, Matt said:

I would say signing off on everything then saying we broke the rules, never mind changing rules and dismissing unique factors, is mismanagement at the very least. The fact they've admitted they've made this approach up specifically for us is also mismanagement. I mean, at the very very least. 

 

Agreed. I would imagine if the league were to offer an amnesty, draw up new rules and give us out 10 points back, (maybe  tell refs and VAR to actually award us penalties) then we would also draw a line under this and move on.

Still, fuck the premier league.

We should get Blue T - shirts with F*ck the Premier League made up for fans to wear at games, maybe with the PL lion locked up in St Ruperts Tower. I would pay for that. 

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