Everton could face a multi-million-pound legal bill if they lose the FFP case
Everton faces legal action from Leicester, Leeds, Southampton, and Burnley that could run into tens of millions of pounds if they lose their case for an alleged breach of the Premier League’s financial fair play rules, which the Guardian understands will be heard on 25 October.
Everton was referred to an independent commission on 24 March in relation to their spending from the 2021-22 season and it was the trigger for Leicester, Leeds, Southampton, Burnley, and Nottingham Forest to write to the league, demanding that the case be heard before the end of the season.
At the end of 2021-22, Leeds and Burnley met with the league to question whether Everton had broken the rules after they recorded losses of £371.8m over a three-year period. The league allows clubs to lose a maximum of £105m over a rolling three-year cycle – and those who do not comply can be fined or deducted points.
The league told Leeds and Burnley back then that they did not believe there was a case against Everton. When they brought the action against them in March, there was frustration among the clubs that were in the relegation battle with Everton – plus Burnley, who had gone down in 2021-22. Leeds stayed up on the final day of that season while Everton also survived.
It is understood the clubs took collective legal advice and their demand for Everton’s case to be expedited was based on the fact that whichever of them was relegated this season could not be adequately compensated in a financial way after the fact; any needed sporting sanctions, the clubs argued, had to take place as soon as possible for the integrity of the competition. The league indicated that it would not or could not hurry the case through.
Forest would survive and, as such, appear less inclined to pursue Everton in the event of a guilty verdict against them.
But Leicester, Leeds, and Southampton, who did go down, along with Burnley from 2021-22, believe that they would have claims for compensation at a separate tribunal. Everton stayed up on the final day. Relegation into the Championship is estimated to cost clubs at least £100m.
Leicester would appear to be in the strongest position as they occupied the final relegation place, as Burnley did in 2021-22.
But Leeds, for example, could argue that they took only one point rather than six from their games against Everton; had they got all six, they would have been in a better position to survive.
The clubs also feel that they could have recourse to seek damages from the league itself – on the grounds of mismanagement of the situation.
The league has always preferred a collaborative approach to clubs that find themselves in trouble and it has shown itself to be extremely reluctant to dock points. Only twice has it done so. In 1996-97, it took three points from Middlesbrough for failing to fulfill a fixture while in 2009-10, it hit Portsmouth with a nine-point penalty for entering administration.
It emerged at the beginning of the week that the former Everton manager Carlo Ancelotti is suing the club in London’s high court. The matter relates to “general commercial contracts and arrangements”.
