Thursday, June 20, 2024

Everton’s 10 point deduction sets a serious precedent

Good morning, a few Saturday bits for you.

It’s quiet from an Arsenal perspective, so there’s only one place to start and that’s Everton being handed 10 point deduction by an Independent Premier League commission for a breach of FFP rules. From The Guardian:

Under Premier League rules, clubs are allowed to lose a maximum of £105m over three years. The commission found Everton overreached their allowed losses by £19.5m and concluded: “This was a serious breach that requires a significant penalty.”

And in a statement, the independent commission said:

Following a five-day hearing last month, the commission determined that Everton FC’s PSR [profit and sustainability rules] calculation for the relevant period resulted in a loss of £124.5m, as contended by the Premier League, which exceeded the threshold of £105m permitted under the PSRs. The commission concluded that a sporting sanction in the form of a 10-point deduction should be imposed. That sanction has immediate effect.

Everton, as you might expect, responded with a statement of their own, expressing shock and disappointment, with a killer line towards the end which says:

The club will also monitor with great interest the decisions made in any other cases concerning the Premier League’s Profit and Sustainability Rules.

I’m sure they are not alone there. I’m no finance guy, so a lot of this stuff feels like a chalkboard full of complicated algebra to me. I’m not going to be able to parse the ins and outs of what Everton did or didn’t do very well, but in general terms the Premier League have set a hell of precedent with this decision. If Everton’s one breach of the rules has resulted in a 10 point deduction – which now leaves them second from bottom, what happens if/when some or all of the 115 charges are proved against Man City?

There is already the prospect of legal action against Everton from Leeds, Leicester, Burnley and Southampton who were all relegated in the period when this financial impropriety took place, and now seek compensation. That’s a can of worms, to say the least. Could we face a situation where, if charges against City stick, clubs at the top end of the table do likewise because they suffered from not being champions or not making it to the Champions League or other European places? It’s a potential domino effect that could rumble on for years.

Obviously, it’s a lot easier to deal with one charge than 115, and I suspect that Man City’s lawyers – with all due respect to Everton – are better equipped to deal with the situation they’re in. Everton might have had lawyers, City probably have a legal department the size of a Premier League squad.

It’s not just City either. Chelsea are being investigated for financial issues between the years 2012 and 2019, but if anyone thinks that’s when it started with Roman Abramovich, I have some magic beans to sell you. Leaked files show a string of payments that appear to breach FFP rules, involving agents (quel surprise), third party ownership of players and more.

If you take 2012 as a starting point – which is completely arbitrary as it is because it’s highly unlikely these practices started that year – eight of the last ten Premier League titles are tainted, or come with as asterisk. There are some Champions League wins that have to be viewed the same way too, although whether UEFA has any mandate to do anything about that if Premier League charges are proved, I don’t know.

There’s a lot to unpack here, but you can go back to the early 2000s to hear Arsene Wenger describe Abramovich’s arrival and operating practices at Chelsea as ‘financial doping’. It’s a term that in time came to be used in throwaway fashion. We – football fans, the media, perhaps even those that were supposed to run the game with fairness and integrity – became inured to it, and what it really meant.

But imagine now a scenario where one of the most successful teams of the recent past were discovered to have built their success on actual doping: using performance enhancing drugs so they could run more, press more, recover faster, and have a physical edge that allowed their undoubted technical quality to dominate season after season. There would be no question about whether or not that team should be punished. However, when it comes to finances which allow a team to do the same thing, the waters are muddied. It’s a conspiracy, you’re just jealous, you’re making excuses for your own failures/weaknesses etc etc.

It’s also because finances are much more complicated that injections or pills, but smart people can see loopholes, grey areas, things they can use to exploit the the rules, and to my mind there’s no question that is what has happened in the Premier League over the years. It’s labyrinthine, it’s difficult to prove, and there’s so much in the balance sheets you need to be utterly forensic to find out what exactly is going on. That takes time, and is also expensive. It doesn’t make it any less cheating though.

I don’t know what’s going to happen, but the Everton decision feels like the first crack in the dam. Where it goes from here remains to be seen, and how quickly anything happens is anybody’s guess. But if what Everton did is worthy of a ten point deduction, and potential legal action that could run to tens of millions, if even half of what the other clubs have done is proven, we’re going to have to see some extraordinary decisions based on the precedent that has just been set.

Just a quick reminder that voting closes soon in the FSA Awards 2023, and Arseblog is up for Club Podcast of the Year. If you could take just a minute to give us a vote that would be greatly appreciated. You can do that here: https://www.surveymonkey.co.uk/r/fsa-awards-2023

While you’re there, you can vote for Ian Wright as Pundit of the Year; Bukayo Saka for Player of the Year (Men), and Frida Maanum as Player of the Year (Women). Keep it red and white, folks. Thanks!

And finally for today, big congrats to our good friend Poorly Drawn Arsenal for his midweek win at the Football Content Awards. Well deserved!

Right. That’s it for now. Have a great Saturday.

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