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At the start of the season not many would have predicted Everton being involved in a relegation battle as it is normally the teams that have just come up who struggle.
Everton are only one of six team that have never been relegated from the Premier League since it's inception in 1992. They are the 2nd oldest team besides Arsenal who went down 1912/13 and Everton 1950/51. If we look at the others quickly Liverpool 53/54, Man Utd 73/74, Tottenham 76/77 and Chelsea 77/78 so every club has gone down at some point in time. This was before the Premier League was formed however, but still possible for any club to be relegated as never say never.
This post is not really about whether they will be relegated or not as that could be out of their hands if they have points deducted for abuse of their budget spending. We all know about Financial Fair Play but do you know about the Profit and Sustainability Rule? I think this makes more sense as you are owning a football club to make profit as otherwise your club is just a charity case.
What Are The Premier League’s Profit And Sustainability Rules?
Rule E45-E52 so this is not made up and is real.
Due to Covid which affected every club due to no supporters being allowed in the grounds the Football Association has been lenient on what clubs have done over the last 2 seasons. They have not taken into account assets losing value and the cost of having a women's team (squad). Youth and community development costs have also been excluded for their financial accounts. This is a profit vs loss according to the books excluding all of the above over a 2 year period plus one season prior to Covid making 3 years which is the important point here.
Everton have just published their latest financial report and many think these figures could now see them face penalties. The 3 years is the crucial time line to consider so 2018/19, 2019/2020 and 2020/21 are the years in question.
Clubs cannot exceed losses of £105 million over a 3 year period and Everton are way over this and not even close. The truth is if we add all these years together the final losses are north of £370 million. This is also adding into the fact that the club actually grew their commercial turnover by 90% last season.
Everton are heading for disaster whatever way you look at this as a new stadium is not going to increase revenue if you are in the Championship.
The one saving grace which the club can fight is the actual cost of Covid which Everton have stipulated at around £200 million. The other saving grace is they are building a new stadium so infrastructure or building work can be accounted for as another reason for losses. Everton may be fortunate they are indeed building a stadium as financially on the books they look screwed.
Still a £400 million loss is horrendous and £295 million over the penalty figure. Will the FA take away points, ban the club from being involved in the transfer market or just fine them? Most likely neither if Everton are relegated is my view as that is a punishment in itself and would be an even bigger financial catastrophe with the loss of Premier League tv money. Should they be punished for poor business over the last 3 years and one would struggle not to if they were being honest sticking to the rules. It is not as though they have a squad of players having huge amounts of value either as they are where they are in the League for a reason.
Another curved ball is where does the owner Farhad Moshiri earn all his money to fund the club. Evidence is pointing towards Russia with his involvement with mining company Metalloinvest which is linked directly to Russian billionaire Usmanov who has been sanctioned.