With Everton fighting Burnley in the arbitration courts over historic PSR breaches, the Premier League’s legal costs continue to spiral.
The Burnley case itself, in which the Clarets are seeking up to £50m in compensation, is outside the Premier League’s jurisdiction. However, it is emblematic of the lawfare that has gripped the top flight.
Everton are now well-versed in these kinds of legal proceedings, having fought against their punishments for breaches of Profit and Sustainability Rules (PSR) on multiple occasions.
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In many ways, it is apt that they chose a law firm, Hill Dickinson, as their stadium naming rights partner.
A general view of Everton's Hill Dickinson Stadium
Photo by Clive Mason/Getty Images
Before their year-end accounting date this summer, the Toffees also transferred ownership of their women’s team to another company owned by Dan Friedkin and Roundhouse Capital.
That was seen by many as a tacit admission that their PSR issues are not behind them, or at least that they weren’t until they followed in the footsteps of Chelsea and Aston Villa with the PSR-busting transaction.
It is understood that The Friedkin Group have attempted to repair relations with the Premier League, though the fanbase – rightly or wrongly – will be less forgiving of Richard Masters and co.
And while it is out of the league’s control, the Burnley case is emblematic of the ongoing fallout.
Premier League informs Everton and peers of booming legal costs
As reported by The Telegraph, the Premier League’s legal costs over the last three seasons have now exceeded £100m. Last season alone was £44.6m, albeit slightly down on £48.1m last year.
TBR Football has seen the slide presentation shown to all 20 Premier League clubs, including Everton, which detail total central costs of £63.2m.
Manchester City’s ‘115’ charges case has been the main driver of rising expenses, but Everton’s complex PSR hearings and the Associated Party Transaction (APT) Rules arbitration have been significant too.
Everton supported Man City as a witness in the first APT hearing, which was set up to deliberate the legality of the Premier League’s rules governing owner-linked commercial partnerships.
Everton badge on a corner flag
Photo by Visionhaus/Getty Images
The Premier League’s central costs are borne equally by all 20 Premier League clubs, i.e., deducted from their final prize money at the end of any given season.
The £62.3m of central expenses last season therefore will have cost Everton £3.16m.
With a verdict not yet released by the independent panel in the Man City charges case and a subsequent appeal process virtually guaranteed, it’s a bill that isn’t likely to get smaller any time soon.
The potential PSR impact of Burnley’s compensation claim against Everton
The claim being presented by Burnley at the International Dispute Resolution Centre in London is that, had Everton not overspent under PSR in 2021-22, they would have survived relegation.
Everton eventually stayed up, with four points the difference between themselves and the Clarets. Incidentally, that is the same margin between the two teams as it stands now.
In September, the Toffees settled out of court with Leeds United, who had lodged a similar claim. However, the value will have been significantly smaller, i.e., one place in the table’s prize money.
For Burnley, the ramifications of relegation were, obviously, significantly more financially impactful.
They are seeking £50m, but they are likely to be awarded a percentage on that based on how likely it was that they would have had the chance to stay up had Everton not overspent – if they are victorious, that is.
But how would any punishment be accounted for in the current PSR cycle?
“This is an intriguing one,” says Liverpool University football finance lecturer Kieran Maguire, speaking exclusively to TBR Football.
“I think Man United managed to get away with the payments to Raine Group of £35-40m as part of Sir Jim Ratcliffe’s investment. That was ringfenced as far as PSR is concerned because it was seen as being nothing to do with football.
A closeup shot of the Burnley badge on a corner flag
Photo by Joe Prior/Visionhaus via Getty Images
“It seems harsh if it is not exempt from PSR for Everton because otherwise it is double-jeopardy. It will be assessed on a probability basis. You have to ask how much the insurance premium would be.
“£50m is the worst-case scenario for Everton, and it’s looking at how likely it would have been that Burnley would have had the chance to stay up in other circumstances.
“Both Chelsea and Aston Villa had significant fines from UEFA – how will those be treated for PSR purposes? I suspect that they would be exempt. The Premier League have the answer, and they won’t tell you.”