Joseph Bryan summarises the decision of the Premier League Appeal Board in the case of Everton Football Club Co Ltd v The Football Association Premier League Ltd.
The eagerly awaited decision of the independent Appeal Board in the (first) Everton profitability and sustainability case has been published. The back pages will no doubt focus on the sporting consequences of the reduction of the club’s sanction from 10 points to six points. But, beyond the headlines, the decision will be of interest to sports law practitioners for the Appeal Board’s reasoning and the precedent value of the decision.
Appeal allowed
The reasoned decision of the Appeal Board (The Rt Hon Sir Gary Hickinbottom, Daniel Alexander KC and Katherine Apps KC) is available here.
The decision rewards reading in full. In short, Everton appealed on nine grounds, two of which were successful. The successful grounds were, in paraphrase, that the first-instance Commission had erred in:
As to the finding that Everton had been “less than frank” and had failed to act with utmost good faith, which concerned certain representations the club had made to the League about the funding of the new stadium at Bramley-Moore Dock, the Appeal Board considered that the mere fact that the club’s representations had been wrong did not make them “less than frank”; still less did it mean that there had been a separate breach of the duty of utmost good faith. The Commission’s decision on these points was also procedurally flawed because Everton had not had a fair opportunity of responding to these issues.[2]
As to the Commission’s ‘benchmarking’ error, the Appeal Board held that the Commission should have had regard to “existing relevant reference points”.[3] The “most obvious” benchmarks which could and should have been taken into account were the rules and guidelines for sanctioning profitability and sustainability breaches in the EFL.[4]
In light of these errors, and applying the principle of proportionality, the Appeal Board substituted a sanction of six points.[5]
Points of interest
For practitioners, the main points of interest in the Appeal Board’s decision are, it is suggested, the following.
Is this decision the last word?
This important decision will undoubtedly be scrutinised not only by the immediate parties to the proceedings (the League and Everton) but also by the other member clubs of the League and clubs throughout the professional pyramid. It remains to be seen how other pending proceedings will now be resolved, including those involving Manchester City[15] and Nottingham Forest,[16] along with the further proceedings against Everton.[17] There is also the very real prospect of claims for compensation by third-party clubs.[18]
Changes to financial regulation in English football are also on the horizon: an independent regulator is the subject of a Government White Paper[19] and the Premier League is itself considering aligning its rules with UEFA’s squad-cost ratio model.[20] The principles set out in the Everton case are, however, likely to have enduring relevance whatever form financial fair play takes in future.
[1] Disciplinary Commission, Decision (17.11.23), para. 108. The first-instance decision is available here.
[2] Appeal Board, Reasoned Decision (26.02.24), para. 178.
[3] Ibid, para. 187.
[4] Ibid, para. 190.
[5] Ibid, para. 227.
[6] Ibid, para. 206.
[7] Ibid, para. 201.
[8] Ibid, para. 93.
[9] Ibid, para. 4.
[10] Ibid, para. 5.
[11] Ibid, para. 5.
[12] Ibid, para. 199.
[13] Ibid, para. 71.
[14] Ibid, para. 30.
[15] Premier League Statement, https://www.premierleague.com/news/3045970 (06.02.23).
[16] Premier League Statement, https://www.premierleague.com/news/3858986 (15.01.24).
[17] Ibid.
[18] Disciplinary Commission, Preliminary Ruling (09.05.23). The Preliminary Ruling is available here.
[19] A Sustainable Future – Reforming Football Club Governance (CP 799, Feb 2023), https://assets.publishing.service.gov.uk/media/63f65d3de90e077bb0c92853/Reform_of_club_football_governance_-_White_Paper.pdf.
[20] Commons’ Culture, Media and Sport Committee, https://committees.parliament.uk/oralevidence/14097/pdf/ (16.01.24, Q32).