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Burnley have won big, for now. The same Independent Commission that hit Everton with a 10 point deduction in 2023 has assessed compensation to one club at £35m, including pre-award interest to 31 July 2025, and the meter is still running at 11.81% a year. A causation finding was made on the balance of probabilities, not loss of a chance, which means no percentage discount was applied to the quantum. Everton will now appeal and in writing this short piece I moved my assessment of their chances of success upwards.
Most of the appeal is hard going. The Commission preferred Professor Rob Wilson and William Daniels to Derek Holt on causation, and it made a long series of line-by-line quantum adjustments between Richard Boulton KC FCA and Louis Dudney CPA. An appeal board does not reopen that kind of finding, and it will not re-run the 100,000 (one hundred thousand) simulations that Wilson and Daniels built to see whether it likes the answer better the second time. Those grounds are there to be argued but they are unlikely to be won.
One ground is different. It is a clean point of law, and it is the only point that kills the claim outright rather than shaving the figure. It is about 30 June.
The two dates are not in dispute. Burnley were relegated on 22 May 2022 and Everton’s financial year ended on 30 June 2022, and from that gap Everton builds a single proposition. There can be no PSR breach until the year end, because that is the first moment the accounts exist and the PSR calculation can be done, and until then a club can still cure an incipient overspend by selling players or other assets. So the breach crystallised no earlier than 1 July 2022, by which time Burnley were already down and the loss had come before the cause. Everton cites _McGregor on Damages (35th edition)_ for the point that you cannot recover for a loss suffered before the cause of action arose, a proposition the textbook says is hardly controverted.
It is a good argument, and the Commission said so.
It conceded the force of the simplicity and accepted that McGregor needs no authority, then took the argument apart at the one joint holding it together. The whole thing depends on the premise that the breach cannot predate 30 June, and remove that premise and the argument collapses. The Commission removed it on construction. Everton’s reading is literal, and a literal reading does not reflect a regime that ties every financial year to a playing season and treats the breach as a state of affairs that develops across the year rather than a single event on a fixed date. Everton was on a path to a £19.5m overspend for months and did not make the sales it could have made. In 2023, Everton and its Commission had in mind the disposal of players to cure a breach during the financial year.
But since the Commission wrote its original decision in 2023, first Chelsea and then Villa, Newcastle and Everton themselves have been permitted to use other transactions to cure breaches.
The 2023 tribunal framed Everton’s escape route as selling players, the obvious lever, and then held it against the club that it did not pull it. But the menu is now wider - Chelsea sold its hotels and then its women’s team to itself before its year end to book a profit for PSR purposes. In doing so, some would argue, it consigned PSR to the dustbin as it confirmed PSR was nothing to do with on-field compliance or sustainability. Villa, Newcastle and Everton have followed.
A club no longer needs to touch its playing squad to come back within the threshold by 30 June. It can sell a building on 29 June - to itself. The more routine that manoeuvre becomes, the harder it is to say the breach was fixed and irreversible a month earlier, in May, while Burnley were being relegated, and the literal construction feeds on exactly that contingency. Everton do still have the issue that their management team didn’t do any of these things at the time.
The Leicester saga shows Everton are not running a hopeless appeal. The Leicester Disciplinary Commission went purposive; the Appeal Board went literal and overturned it, accepting precisely the kind of construction Everton now advances; and the Leicester Rule X tribunal then went purposive again and overturned the Appeal Board. Everton is going to run an argument that beat the Premier League in front of the Leicester Appeal Board.
Everton also has a distinction worth making. Leicester was about whether the League could charge a relegated club at all, which is a membership question, whereas Burnley is about the timing of an admitted breach for the purpose of a rival’s damages claim. Everton can say the rules were drafted to protect the League’s power to prosecute, not to date a breach early enough to fund someone else’s compensation, and McGregor gives that distinction orthodox backing.
None of that is necessarily fatal to Burnley. Burnley will also say the cure argument proves too much, because if every projected overspend stays contingent until 30 June then the PSR bites on nobody during the season it is built to police.
I now make this an even-money appeal on this point. I started much more sceptical that Everton could win but I struggle with a purposive approach when intra-group sales have been deemed acceptable routes to a PSR cure.
The 30 June argument is Everton’s best appeal ground by a distance and it is the only one that wins the whole case rather than a slice of it. It still asks the appeal board to prefer the Leicester Appeal Board’s overturned literal reading to the Leicester Rule X tribunal’s purposive one. But the appeal board will be looking at a PSR regime in which a club can now manufacture compliance using a totally unrelated property sale on 29 June. And that makes Everton’s case that the breach had not yet crystallised in May 2022 a good deal less artificial than it reads on the page.
It was previously established that Everton spent £19.5m to avoid relegation in May 2022 largely due to Farhad Moshiri’s own evidence. Everton now seek to argue it had not yet broken the rules when Burnley went down in May 2022. Both things cannot comfortably be true, but the appeal board may decide they do not have to be.
_Stefan Borson is a lawyer, football finance commentator and Partner and Head of Sport at law firm, McCarthy Denning. He is available to advise all football club claimants and defendants on matters of compensation._