Financial Fairplay Investigation - 2025 Nobody in Breach

[Goaljira]

Mr Moshiri’s evidence was that he hoped Mr Usmanov would invest heavily in an equity stake in the Club. The Club had already, on 7 January 2020, entered into an option and naming rights agreement for the Club’s training facility and new stadium with USM, Mr Usmanov’s company. This was to take effect from Season 2024-25, i.e. after the stadium had been opened; but, Mr Moshiri said, negotiations had reached an advanced stage to bring this forward to FY22, so that the naming rights sponsorship of £10m per season would commence during the construction phase in that financial year. The possibility of this revenue in FY22 was lost, he said, because of the sanctions imposed on Russian entities, including Mr Usmanov and USM, as a result of the invasion of Ukraine; which meant that the Club had to withdraw from further negotiations with him. This loss of chance, it was submitted, should have been taken into account by the Commission as mitigation.

So we didn't get an advance on the naming rights for the stadium as was widely mooted?

[Goaljira]

So we terminated his contract then, and didn't just allow it to run down?



So the club was happy to look like it was being the victim in paying him all through that last season, when in fact he'd been binned off? When was he removed from squad lists?

https://web.archive.org/web/20211023060 ... com/teams/

According to this he was still listed in the squad on the official site as of October 2021. Part of me is like 'Stop digging into this, it'll end badly', but the other part of me is like 'cheating lying bastards'.

[Shogun]

Essentially that Sigurdsson is irrelevant because a player can lose any player to unforeseeable circumstances, e.g. long term injury, and it wouldn't be provided as a mitigating factor.

Although I'm surprised the club didn't make more of "he was arrested on suspicion of child abuse and was suspended by the Club and then the FA" You'd think the fact we wasn't able to unsuspend him would have been a factor, though if we made no attempt to then it would be a difficult argument.

Player X
105. The Club lost the services of Player X. Player X was, at the time of his arrival, the
Club’s record signing, and he was a successful and popular player. However, in
Summer 2021, he was arrested on suspicion of child abuse and was suspended
by the Club and then the FA. The circumstances of his suspension meant that the
Club was entitled to terminate his contract which, on 23 August 2021, it did. In
terms of the Club’s P&L Account (and, hence, the PSR Calculation) that resulted
in the net book value of the player (£9.1m) being written off, and additional losses
of £0.9m for wages paid to the player for the period before 23 August 2021 when
he could not provide any contractual services because of his suspension. The
Club also lost the services of Player X on the pitch. Whilst the Club was advised
that it had an economically viable claim against Player X, it did not pursue it
because of concerns about his psychological well-being. The charges against the
player were ultimately not pursued.

106. In its August 2022 PSR Submission, the Club submitted that this £10m loss was
entirely unforeseeable, and no amount of business planning and prudent financial
decision-making would have avoided suffering this loss; this loss resulted from the
Club considering that it would not be appropriate to pursue an action against Player
X which “everyone agrees would have an adverse impact on the player’s welfare”.
The Club sought to have that £10m deducted from the costs side of the PSR
Calculation.

107. As we understand it, by the time the matter had reached the Commission, the Club
no longer contended that that sum should be deducted: rather, it submitted that it
was entitled to credit as a matter of mitigation for not pursuing an economically
viable claim against Player X because of proper concern for his welfare.

108. In its Decision (paragraph 121), the Commission noted (i) the decision not to
pursue Player X was a business decision taken by the Club which, as such, could
not stand as mitigation, (ii) there was no evidence as to the player’s psychological
condition when the decision not to pursue him was taken, (iii) the value of the claim
(£10m) was speculative, (iv) the claim may have faced difficulties, and (v) there
was no evidence that Player X would have been able to meet any judgment made
against him. The Commission then found (paragraph 122):

“The circumstances surrounding Everton’s claimed losses are the sort
of events that occur in the management of football clubs where a
player’s services and value can be lost for a variety of reasons – most
obviously because of injury, or a loss of form. It is not something that
can stand as mitigation in these proceedings.”

109. We consider there is no error here, for much the same reasons as with loss of the
chance of the USM sponsorship. We accept that the precise circumstances of the
loss of the services of this player (i.e. as a result of arrest pending possible criminal
charges being brought against him, which resulted in his suspension by the Club
and the FA, followed by the termination of his contract by the Club) might not have
been foreseeable. We leave aside entirely the inherent uncertainties of the Club
recovering any money from a claim brought against Player X for breach of contract
that could properly be reflected in FY22, which relegated this to the loss of a
chance at best. However, for any PL club, the loss of the services of a player or
players during the course of the season for a variety of reasons (including, most
obviously, injury; but PL clubs losing the services of players as a result of a player’s
actual or alleged misconduct are not rare) is foreseeable and a contingent risk
against which, if a club acts with financial prudence, the club should properly
guard. This was essentially the second ground relied upon by the Commission for
denying this as a mitigating factor (paragraph 124 of its Decision). We consider
this alone to be sufficient reason.

Conclusion

110. For those reasons, leaving aside the issue of cooperation with the PL (dealt with
in Ground 3 below: see paragraphs 111-116), we conclude that the Commission
made no error in its approach to aggravating and mitigating factors, nor did it err
in the manner in which it dealt with the circumstances of the USM sponsorship and
Player X as relied on by the Club in mitigation. We dismiss this ground.

[Gash]

So we didn't get an advance on the naming rights for the stadium as was widely mooted?

He paid £30m up front for an exclusive option on the naming rights.

[Mouse]

I'm looking forward to the post-appeal bounce at Goodison on Saturday. It will be a more positive atmosphere and it should give the players a boost to kick on again. I'll miss this one as we are in Paris for a long weekend and she selfishly won't postpone it.

[sam of the south]

Everton confirm the point deduction imposed by an independent Premier League committee in November will be reduced from 10 to 6 points with immediate effect.

https://evertonfc.com/news/3912657/club-statement

[Robbie Moubert]

From the BBC:

A Premier League statement read: "Everton FC appealed the sanction imposed against it on nine grounds, each of which related to the sanction rather than the fact of the breach."

A three-person appeal board concluded that the independent commission which imposed the 10-point ban "made legal errors" on two grounds.

It said the commission was "wrong" to punish Everton for being "less than frank" over what it told the Premier League about its new stadium debt.

The appeal board also said the commission was "wrong not to take into account available benchmarks" and that a six-point sanction was "broadly in line" with English Football League guidelines.

[Cozzie]

So will this actually help us for the 2nd charge?

[Blueomar]

[Bluedylan1]

I think what's becoming clear is that we've been naive, complacent and incompetent in how we've handled the matter initially (presumably because we assumed ''working with the Premier League'' meant that we'd avoid any sanctions) but the appeal commission have accepted our mitigation that our numbers are trending in the right direction. Hopefully if our next set of accounts show further trending in the right direction, even though we've breached, that would mean a reduced punishment next time.

Whereas Forest have just blown a load of money on players as far as I can see, and their only attempt at mitigation is that we sold a player later than we should've because we wanted more money for him. To me, if they are consistent, Forest's punishment should be higher because they've pretty much gone ''fuck it, let's spend shitloads and see how we get on''.

[TheRam]

Happy enough with that.

Thought we’d be fine with the 10 points anyway.

Hopefully get a win on Saturday and get a bit of positivity round the place.

[Cantoffee]

Happy enough with that.

Thought we’d be fine with the 10 points anyway.

Hopefully get a win on Saturday and get a bit of positivity round the place.

Yea a win Saturday probably puts us 8 clear, potentially up to 13th in the table. Would be a big boost for the final run in and hopefully we can get clear enough that the pressures lifts a bit.

Would be wonderful to be looking up the table for a bit and every spot is more prize money as well which we desperately need.

[Shogun]

If this is the sort of line that the Premier League are going down then Man City are going to get 100s of points deducted.

lol, as if.

201. 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.

202. 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. For the reasons we have given (see, e.g.
paragraphs 132 and 150(iii) above), it is clear from the context of the PL Rules,
any breach of rule E.51 is serious matter. It likely gives the club in breach an unfair
sporting advantage and a correspondent revenue advantage. In our view, only a
points deduction, with its immediate and overt effect, has the appropriate power of
disincentive for clubs to remain within the upper loss threshold required to maintain
the aim of an FFP regime. It also, in our view, addresses both the financial and
sporting aspects in the most appropriate way

[Shogun]

They don't think a transfer ban would disincentivise a club from breaking PSR rules again.

Which is interesting because apparently it was considered enough to disincentivise Chelsea from tapping up youth players.

Wonder what the difference is?

204. Nor do we consider that a player registration ban, or any form of incoming “transfer
ban”, would have any reasonable disincentivising power for clubs such that it would
ensure that the aims of the PSR were fulfilled. We note that the power to impose
a registration ban is available to the PL Board under rule E.15 if a Club breached
the £15m threshold, without the PL needing to go to a Commission. In our view,
that to an extent supports the PL’s contention before us that such a ban would not
generally be appropriate for a breach of rule E.51 .

[NomadskiEFC]

Glad we have the reduction but before anyone gets comfortable, remember we have a second charge to deal with and having not won a game since a week before Christmas we can hardly consider ourselves anywhere near safe.