adminBurnley have won a landmark legal case against Everton for breaching Premier League financial rules, with the Merseyside club ordered to pay nearly £40m in compensation. It is the largest financial penalty ever imposed on a Premier League club.
The verdict by a Premier League independent disciplinary commission – comprising the same three-man panel that deducted Everton 10 points over the same breach in November 2023 – has wide implications for the competition and increases the likelihood of more clubs taking legal action over profitability and sustainability rules (PSR) offences.
Burnley sued Everton after they were relegated to the Championship at the end of the 2021–22 season. Everton were initially deducted 10 points for breaching PSR rules over the four-year period up to June 2022, although that decision was reached in November of the following year. The penalty was later reduced to six points on appeal.
Premier League rules allow clubs to seek compensation from other clubs found guilty of breaching financial regulations.
Burnley’s argument was that, had Everton been deducted six points during the 2021–22 season rather than in 2023, they would have stayed in the Premier League, while Everton would have been relegated instead.
Everton have appealed the ruling and have received assurances from the Premier League that the compensation amount will not affect this year’s PSR calculations.
The club, owned at the time by Farhad Moshiri and now under The Friedkin Group (TFG), insists the decision will not impact its summer transfer plans or overall financial position. It is not yet known whether TFG will pursue Moshiri for damages. Moshiri received £25m when selling the club to TFG in December 2024.
In a statement, Everton said they were “surprised and angered” by a ruling they believe is “fundamentally flawed in both law and fact.”
The club added that it does not accept the panel’s conclusion that Burnley’s relegation was caused by a sporting advantage gained by Everton through PSR breaches, noting that a sporting sanction had already been applied.
Everton also argued that the ruling creates a dangerous precedent, claiming it is based on the idea that a club can be judged in breach of financial rules at any point in a financial year. The club maintains that the panel misinterpreted evidence presented by its legal team and says it is confident of success on appeal. It will not comment further until the appeal process is concluded.
Burnley’s case was supported by the “loss of chance” principle, and the ruling could open the door for further club-to-club legal claims. If Manchester City are found guilty in their ongoing case, clubs that missed out on titles or European qualification could potentially pursue compensation claims.
Everton maintain they believed they were PSR compliant at the time of Burnley’s relegation in May 2022, and argue that corrective actions, such as player sales, could have been taken if they had been aware of any breach before the financial year ended in June 2022.
The club also claims it has already suffered a financial impact of around £6m due to relegation from 13th to 17th place in the 2022–23 season.
Burnley have been awarded £26m in compensation, plus £9.1m in interest, with further accrued interest also applying.
Burnley chair Alan Pace said: “When we were relegated in 2022, we disappointingly accepted the outcome on the pitch. What we could not accept was competing in a competition later shown to have been compromised.
“We did not come to this lightly. When resolution through every available channel was declined, formal action was the only path left to us. The independent commission has now confirmed that a rule was broken and a competitive advantage was improperly gained.
“Our action has always been about making football fair. Clubs that comply with the rules deserve to compete on a level playing field.”
Chelsea were previously fined £10.75m and handed a suspended transfer ban for financial breaches under Roman Abramovich’s ownership, while West Ham were fined a then-record £5.5m in 2007 over the Carlos Tevez and Javier Mascherano case.
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Abdulhafiz Teslim