#37 Could this be the most controversial end to a Premier League season yet?
In this week's BackPage, we look at the curious case of points deductions, appeals and relegation uncertainty.
By Daniel Geey and Jonny Madill
Introduction
Football cost control acronyms have been confusing for a while. FFP (Financial Fair Play), PSR (Profitability and Sustainability Regulations), FSR (Financial Sustainability Regulations) and STTC (Short Term Cost Control) are just some of the iterations which have made headlines over the last decade. FFP is still being used as the umbrella, catch-all description of the varying rules. However, as was seen in the recent Everton FC EPL points deduction decision, the Premier League’s (EPL’s) PSR are now very much in the spotlight.
The EPL’s PSR remains headline news following Everton FC managing to reduce its 10 points deduction to six points in February this year. Data analysts 21st Group assessed that the four points the club ‘regained’ had decreased its relegation chances from 35% to 6%.
There is, however, considerable further risks both for Everton FC and, even more recently, Nottingham Forest FC. On 15 January this year, the EPL referred both clubs to an independent commission for breaches of the EPL’s PSR. This was Everton’s second referral. Both face the possibility of a points deduction.
EPL’s PSR: how does it work?
In brief, EPL clubs are obliged to comply with the PSR. This in practice means they cannot, at a maximum, spend more than £105m over a three-season rolling period (i.e., £35m per season). Everton were sanctioned for spending £19.5m over the threshold after initially admitting to being £7.9m over the limit. If a club is not in the EPL, its ‘per season allowable loss’ is reduced to £13m. That means because Forest were in the Championship for two of the three seasons being investigated (20-21 and 21-22), its total allowable loss is £61m (i.e., £13m x2 and £35m x1).
New 2023-24 PSR Timetable
The EPL amended the PSR in the summer of 2023 to ensure that any standard PSR breaches would be sanctioned in the season in which the charge was brought. Appendix 1 of the EPL Regulations sets out the new timetable[1].
In summary, EPL clubs must submit their accounts by 31 December (rather than by March of the following year, as was the requirement previously). As can be seen by the EPL press release on 15 January this year, the EPL had 14 days to confirm any charges brought against its member clubs (clause 8 of Appendix 1). The expedited timetable means that there is a backstop date of 8 April 2024 for the independent panel to hear both the Everton and Forest cases. The Forest independent PSR panel will reportedly be hearing the matter on Thursday 7 and Friday 8 March. A sanctioning decision would then be required under the PSR timetable by 15 April[2]. The Forest decision will come within one week of the conclusion of the hearing (i.e., around 15 March).
The clubs can appeal their respective decisions and this is – potentially – where the difficulties begin (especially if the sanction is a points deduction).
Clause 26 of the Appendix 1 states (bold added):
“The Appeal Board must provide its decision, together with written reasons, (the “Appeal Decision”) prior to and if possible some time before the Backstop Date.”
The backstop date is defined as “prior to the 1 June following the submission of the relevant Club’s Annual Accounts”.
Whilst the EPL season is scheduled to finish on 19 May 2024, an appeal decision can be provided prior to 1 June. For over a week after the EPL season has finished, therefore, there is a possibility that clubs - may not know whether they will end up being relegated. Theoretically, a club (and its fans) could be staring at survival or relegation when the season concludes on 19 May, only for that position to completely turn on its head as many as 12 days later (on whether a points deduction is upheld or dismissed). An unenviable position for any appeals body. Does anyone remember the case of Carlos Tevez, West Ham and Sheffield United in 2008? The appeals body grappled with this very point.
It also leaves the prospect of Everton being docked points twice in one season (an unprecedented position for an EPL club) and potentially being sanctioned more severely second time round (given they would be classed as a repeat offender). The club’s manager Sean Dyche recently suggested that any club breaching the rules in the current season should only be sanctioned in the following season. Whilst a reasonable suggestion, the problem with that logic is that the competitive advantage of spending more than otherwise permitted, benefits the offending club to the detriment of the compliant clubs.
Indeed, the Introduction to the PSR’s Appendix 1 states (bold added):
“The League and Clubs recognise and agree that, given the possibility of the imposition of a sporting sanction in the form of a points deduction on any Club found to be in breach of Rules E.49 to E.54 and the desirability (so as to protect the interests of other Clubs) of any such points deduction taking effect in the Season in which the relevant Club’s Annual Accounts are submitted, it is important that clarity is reached regarding any such sanction prior to the subsequent Annual General Meeting.”
Nonetheless, it is equally unappealing for points deductions to be effectively ‘confirmed’ after the end of the season and it risks leading to an unsatisfactory scenario whereby relegation is ultimately being decided (or at least perceived to being decided) by lawyers, arbitrators and accountants, rather than players and managers.
The hope, for all concerned, is that any appeal decision can be announced and concluded in advance of the end of the season and so that, if points deductions have occurred, each club is aware of what may be required to stay in the EPL, at the latest, when they enter their final round of fixtures on Sunday 19 May.
[1] See EPL Handbook p533 onwards https://resources.premierleague.com/premierleague/document/2024/01/04/21175cfd-faa3-4b01-bbad-65894fead686/PL_Handbook_2023-24_DIGITAL_04.01.24-final-.pdf
[2] Clauses 15 and 17 of Appendix 1 of PSR.
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Very insightful!