Everton vs The Premier League: Here comes the war
Evertonians must prepare for a protracted battle in the public sphere.
By guest writer Mike Gow. This article was initially published on The State of Football.
Evertonians have spent much of the last ten days engaged in dialogue on the Premier League’s 10-point sanction imposed on Friday 17th November, 2023.
Shock turned to despondency. Despondency to outrage. And, finally, outrage to action.
With this judgement, simply dying for Everton is not enough. We now have to kill for the famous EFC. We have to kill that judgement and the sanction that goes with it. Nothing but our best will do.
Our fanbase has come together many times over the last three seasons. With this sanction imposed, we have all had to consider next steps: to analyze, strategize, organize, and mobilize in support of the club we would give anything to protect.
But the time to put our lives, figuratively speaking, on the line is over. With this judgement, simply dying for Everton is not enough. We now have to kill for the famous EFC. We have to kill that judgement and the sanction that goes with it.
Nothing but our best will do.
As we await further announcements on the forthcoming appeal, Evertonians have been discussing our potential strategy. What is certain is that the opponent we are facing in this Appeal cannot be reasoned with, cannot be persuaded, lacks empathy/sympathy, and exists with the express purposes of punishing us.
But that opponent is no longer the Premier League or the yet-to-be-formed Appeal Commission. It is the 41-page PLIC’s Judgement Document itself.
Everton and their legal team — comprising solicitors from Pinsent Masons and barristers from Blackstone Chambers — will not engage in any public discussion of the Appeal. However, discourse within the fanbase may get back to the club and can potentially inform the approach.
Similarly, we have to keep the spotlight glaring and the noise at maximum so the Premier League get no respite. With that in mind, this article hopes to help Evertonians to power up the floodlights and crank up the volume.
Optics and Noise matter.
Evidence and Reason: Our Weapons
What follows is the result of much analysis, research, and (most importantly) dialogue with other fans. I attempt to lay out a coherent strategy for an Appeal, detailing how we slay this judgement using carefully considered arguments designed to tear the judgement to pieces. Kill it. Dead.
There are several crucial factors are central to the formulation of a coherent Appeal:
No Emotional Appeals. “Unfairness” or “Injustice” that aren’t proven or supported with actual evidence cannot form part of the Grounds for Appeal.
No Conjecture or Speculation. “What if this happened/didn’t happen?” isn’t a valid argument. We cannot go back in time, nor can we empirically prove what would have happened had circumstances been different.
Refutation/Rebuttal. Identifying vulnerabilities in the Premier League Independent Commission’s (PLIC) 41-page judgement and “refuting” them with evidence and reason.
A rebuttal is an attempt to disprove an argument (this is what our team must try to do)
A refutation is where an argument is actually disproven (this is our goal and the conclusion we want the Appeal Commission to come to on each of the eight Grounds detailed below).
Our armoury and our weapons in this fight are Evidence and Reason.
Battle Plan: Our Line of Attack
Each of the eight Grounds for Appeal is laid out below in detail. The order is deliberate and dictated by the amount of damage each would inflict on the PLIC Judgement.
Grounds No.1-4 challenge the very notion that any sanction must take “sporting advantage” into consideration.
Ground No.5 uses the Premier League’s own argument, that “sporting advantage” is impossible to quantify, against the PLIC judgement. This is a back-up argument in case 1-4 are all rejected.
Ground No.6 focuses on logical fallacy in the accusation that Everton continued trading players and this was the primary cause in their breach of PSR.
Ground No.7 highlights the moral hazard on display in the PLICs sanction which punishes supporters and the team, not those responsible for the financial mismanagement of Everton FC.
Ground No.8 is the final appeal against the excessive severity of the sanction imposed - demonstrable when compared against historical cases of penalties imposed for financial problems, and with the penalty imposed in the precedent case (EFL vs Sheffield Wednesday FC) after appeal.
Our objective here is to start with potential strikes that will cause the most damage to the PLIC’s reasons for imposing such a harsh penalty.
Grounds for Appeal No. 1: “Sporting Advantage” is not a factor for consideration in PSR
Focus
To challenge the fundamental assertion that the Premier League’s Profitability and Sustainability Regulations (PSR) are concerned with fair sporting competition. Our argument is, instead, that PSR is solely concerned with financial matters.
Method
Analysis of the Premier League PSR regulations which makes no mention of fair competition or sporting matters, clearly showing that PSR is solely an issue of ensuring clubs manage finances in a responsible manner.
Evidence/Reason
The Premier League’s Handbook mentions PSR only eight times over 346 pages. In no instances does it state anywhere that ensuring fair competition is a purpose of this regulation. Only that PSR is designed to ensure the responsible financial management of football clubs. This is also the case for the EFL and UEFA. The notion that PSR/FFP allows for a penalty for an unquantifiable or inferred “sporting advantage” is simply not true. PSR/FFP is not designed with this consideration.
If the Premier League cannot point to their own regulations and identify where PSR is clearly shown to be concerned with punishing clubs for any “sporting advantage”, either empirically proven or via inferrence, neither Everton nor any other club should be be subject to sanctions calculated to punish them on this basis. To do so would be an injustice.
Objective
To remove “sporting advantage” as a factor in considering Everton’s sanction for the PSR violation.
Grounds for Appeal No. 2: The Problematic Legal Inference of “Sporting Advantage”
Focus
To critique the flawed deductive reasoning that underpins the Premier League’s assertion that a Sporting Advantage can be gained by simple virtue of exceeding the £105m threshold.
Method
Systematic deconstruction of the legal argument, and the deductive reasoning used to arrive at the assertion that exceeding £105m threshold confers a sporting advantage on the offending club.
Evidence/Reason
Based on legal (deductive) reasoning. The PLIC Judgement uses the deductive reasoning which requires a Major and Minor Premise in order to arrive at the conclusion “a breach of PSR will confer a sporting advantage on the defaulting club”.
Major Premise: Losses over the £105m PSR threshold over 3yrs are a violation of PSR (Evidence: The Premier League’s PSR Regulations) .
Minor Premise: Everton exceeded the £105m PSR threshold over 3yrs (Evidence: Both the Premier League’s and Everton’s PSR Calculations)
Conclusion: Everton violated the Premier League’s PSR Regulations (True)
The above is an example of deductive reasoning where both the Major and Minor premises are true. Therefore the Conclusion must be true. True+True=True.
Major Premise: Exceeding the £105m PSR threshold gives a club a sporting advantage (Evidence: ???)
Minor Premise: Everton exceeded the £105m PSR threshold (Evidence: Both the Premier League’s and Everton’s PSR Calculations)
Conclusion: Everton enjoyed a “sporting advantage” over other Premier League clubs (False)
In the above example. The Minor Premise is undoubtedly true, but there is no evidence supporting the Major Premise that exceeding this £105m loss threshold confers a “sporting advantage” on the defaulting club. So the conclusion must be false. False+True=False.
The Premier League and the PLIC insist that “any sporting advantage cannot be quantified” (PLIC, 2023:28) (see also Grounds No.5: Quantification of “Sporting Advantage”). This assertion is based solely on the use of precedent from EFL vs Sheffield Wednesday FC. While the PLIC may claim this is “evidence”, there are issues with this assertion on both regulatory principle (see Grounds No.3: Use of Precedent to Assert “Sporting Advantage”) and on the manner by which the cases cited as precedent (EFC vs Sheffield Wednesday and EFL vs Birmingham City FC) arrive at this conclusion (see Grounds No.4: The Assertion of “Sporting Advantage” is a “Factoid”).
Objective
To have “sporting advantage” ejected as a factor in considering Everton’s sanction for the PSR violation on the basis of the flawed legal reasoning and lack of evidence presented to support this assertion.
If the Appeals Commission reject this on the basis they have provided precedent in the EFL vs Sheffield Wednesday FC case, we move on to attack that in Grounds No.3….
Grounds for Appeal No. 3: The Use of Precedent to Assert “Sporting Advantage”
Focus
The Premier League and PLIC’s assertion that a “sporting advantage” was conferred on Everton by virtue of exceeding the £105m loss threshold is attributable entirely to citation of a previous case used as precedent: EFL vs Sheffield Wednesday FC.
Method
To highlight that the legal principle of stare decisis (latin: to stand by things already decided) is not binding in the case of the Premier League vs Everton FC. The precedent used is from a different regulatory jurisdiction (English Football League), meaning the precedent used can only constitute a persuasive precedent, not a binding precedent, and that the PLIC is not required to abide by EFL vs Sheffield Wednesday FC precedent in its adjudication.
Referring back to the earlier Grounds 1: “Sporting Advantage” is not a factor for consideration in PSR, Everton should also challenge the use of the EFL vs Sheffield Wednesday FC on the basis that the EFL PSR Regulations make no reference to sporting advantage and that PSR is defined solely as a mechanism to ensure the responsible financial management of football clubs.
Grounds No. 4: The Assertion of “Sporting Advantage” is a “Factoid” also highlights that issues raised with the legal reasoning in Premier League vs Everton FC (Grounds No. 2: The Problematic Legal Inference of “Sporting Advantage”) are also present in the EFL vs SWFC case.
Evidence/Reason
Stare decisis is a legal principle in UK law. There are two forms of stare decisis:
Binding Precedent - precedent from within the same jurisdiction that a court/commission must abide by in its adjudication.
Persuasive Precedent - precedent that a court/commission may, but isn’t required to, rely on when adjudicating on a case.
Pointing out the deductive fallacy that underpins the claim of “sporting advantage” in the EFL vs Sheffield Wednesday FC is important because, if it is deemed to be a flawed argument, the PLIC is under no regulatory obligation to follow it as precedent - because EFL vs SWFC is only a persuasive precedent from a different regulatory jurisdiction.
Objective
To have “sporting advantage” removed as a consideration on the basis that it is only supported by use of a precedent from outside the Premier League’s jurisdiction that is guilty of the same deductive fallacies outlined in Grounds 2: The Problematic Legal Inference of Sporting Advantage (see also Grounds 4: The Assertion of “Sporting Advantage” is a “Factoid”).
In addition, as demonstrated through analysis of PL, EFL and UEFA regulatory documents, PSR/FFP is not concerned with sporting matters at all - only with sustainable financial management of clubs (see Grounds 1: “Sporting Advantage” is not a factor for consideration in PSR) - strengthening our argument that EFL vs SWFC is a problematic precedent on several levels.
Finally, by drawing attention to this, we make it easier for the Appeals Commission to alter/reduce our sanction on the basis of legal principle.
Grounds for Appeal No. 4: The Assertion of “Sporting Advantage” is a “Factoid”
Focus
Scrutinizing the origins of the “sporting advantage” assertion which is the basis of the severe punishment meted out by the PLIC.
Method
Analysis of the EFL vs Sheffield Wednesday FC case and the precedents used in that case. There are TWO precedents utilised: EFL vs Birmingham City FC (binding precedent) and UEFA vs Dynamo Moscow (persuasive precedent).
Evidence/Reason
The assertion underpinning the claim that an “sporting advantage” is conferred on Everton is traceable back to EFL vs Sheffield Wednesday. This, in turn, is traceable back to EFL vs Birmingham City, with some justifications drawn from UEFA vs Dynamo Moscow.
However, as has been highlighted in Grounds No.1-3, just as is the case with the Premier League PSR regulations, both EFL and UEFA make no mention of football matters, sporting fairness, or PSR as a mechanism to ensure no team has a sporting advantage over others.
The erroneous notion that PSR (PL and EFL) or FFP (UEFA) is designed to legislate/regulate against unfair advantage through overspend is not stated in any regulations and therefore not true. This inaccuracy is leads to the deductive fallacy laid out in Ground No.2. The “sporting advantage” assertion has no basis in regulation, other than being traceable back to prior cases in a different jurisdiction. It is, therefore, a “factoid” - unreliable information that has been repeated so often, it becomes accepted as fact.
Objective
To discredit the persuasive precedent (EFL vs Sheffield Wednesday FC) used in Premier League vs Everton FC. To discredit the binding precedent (EFL vs Birmingham City FC) used in EFL vs Sheffield Wednesday FC. This should compel the Appeals Commission to disregard any “sporting advantage” in considering a sanction for Everton. Neither of these precedent cases actually provide any evidence supporting their assertion that PSR overspends confer an advantage.
Grounds for Appeal No. 5: Quantification of “Sporting Advantage”
Focus
The Premier League and PLIC assert that it is impossible to quantify the sporting advantage conferred on Everton. However, there is no clear attempt to quantify the alleged “sporting advantage”.
More importantly, the PLIC finds that the reason for Everton’s overspend was attributable “largely on its purchase of new players and its inability to sell other players” (PLIC, 2023:40).
Method
The PLIC ostensibly reduces Everton’s overspend, and therefore its “sporting advantage” to two factors. Transfer Fees Paid, Wages Paid and Amortisation of Intangible Asset Values (players they could sell).
The PLIC have already rejected mitigation on the basis that Everton were unable to sell players (the Player Y mitigation).
However, it should be possible to calculate - if not perfectly, then to demonstrable probability, how much of an advantage Everton secured by overspending by £19.5m.
Evidence/Reason
The PLIC judgement insists that a sporting advantage was inferred on Everton through their violation of the PSR £105m threshold by a figure of £19.5m.
“Everton’s PSR difficulties are not attributable to the costs of the stadium development…The cause of Everton’s PSR difficulties was the fact that it overspent (largely on its purchase of new players and its inability to sell other players), and because it finished lower in the league than it had projected in FY 2022 (16th against the projected 6th – causing a loss of expected income of c.£21 million).”
PLIC Judgement (2023:40)
Objective
In the event Grounds No.1-4 are rejected at Appeal, this approach aims to challenge the assertion that calculating a “fair” penalty on the basis of Everton’s £19.5m PSR breach is “impossible”.
The PLIC has reduced Everton’s overspend to three key factors. One (player amortisation) we cannot do anything about. But by defining our alleged “sporting advantage” in terms of transfer fees paid and wages, they have given us a way to calculate and demonstrate the “sporting advantage” while ignoring all other factors (injuries, Rafa Benitez appointment/sacking, performance metrics of incoming transfers, refereeing decisions etc).
It is possible, within the parameters defined in the PLIC judgement. They have opened themselves up to this line of attack and we should take the opportunity to strike on this point.
Fan Base Action Point
We need to identify people capable of bivariate/mulitvariate quantiative analysis and design a project to explore the advantage gained by spending an extra £19.5m.
Data Required
Transfer Spend in 2019/20, 2020/21 and 2021/22 for all Premier League Clubs
Player Wages in 2019/20, 2020/21 and 2021/22 for all Premier League Clubs
Complete data on all Premier League results over a historical period (5-10yrs).
If we can get this data, we should be able to - with a high level of accuracy/probability - identify the actual “sporting advantage” conferred on Everton by the £19.5m overspend.
Grounds for Appeal No. 6: Player Trading as a Causal Factor in Everton’s violation of PSR
Focus
The assertion that Everton’s PSR violation was attributable “largely on its purchase of new players and its inability to sell other players” (PMIC, 2023:40)
Method
Analysis of player trading and the impact of Everton’s player trading on the profit and loss statements, examining the impact on P&L in 2019/20, 2020/21 and 2021/22.
Evidence/Reason
Player trading significantly improved our profit and loss in 2021/22. Player trading is the most effective way for clubs operating at a loss to reduced those losses - not evidence of profligacy in-and-of-itself:
Profit on Sales: £40m (2019/20); £13m (2020/21); £68m (2021/22)
Amortisation: £99m (2019/20); £81m (2020/21); £68m (2021/22)
Staff Costs: £164m (2019/20); £183m (2020/21); 162m (2021/22)
Objective
To challenge and disprove the flawed argument that continuing to buy players was the cause of Everton’s PSR breach. This is not empirically supported when examining the P&L for the relevant period. It also demonstrates a concerning lack of understanding of football business by both the Premier League and the PLIC.
Grounds for Appeal No. 7: Moral Hazard and the Unfair Punishment of Supporters and Players
Focus
Moral Hazard is a business ethics principle that requires us to guard against situations where the consequences of any actions are borne by people other than those making decisions. In this case, the Board and Senior Management Team at Everton are responsible for the irresponsible management of Everton’s finances - yet have avoided sanction while the team and the supporters have been punished.
Method
Unlike the EFL (PSR) and UEFA (FFP) regulations, the Premier League provides no sanctioning guidelines for PSR violations. The sanctions open to them can be applied by an Independent Commission for any regulatory transgressions. This includes sanctions applied to Board members, managers, players, match officials - and to the club itself.
Evidence/Reason
The Premier League handbook itself outlines the sanctions available for an Independent Commission to apply at its discretion.
To highlight the issue of injustice of a sanction which does not punish those responsible for the risks taken and the consequent PSR violation.
Unlike the EFL and UEFA, the Premier League has developed policy and regulation on PSR which allow for an almost unlimited degree of flexibility in imposing sanctions.
It is not unreasonable to suggest that the Premier League’s own desires for specific punishment — illustrated by their suggested formula for calculation of the points deduction proposed by CEO Richard Masters (PLIC, 2023:27) unduly influenced the PLIC and impacted their independence.
Given the range of potential sanctions against Board members or against the club which the Premier League regulations allow the Independent Commission to consider, it seems more than a coincidence that the sanction imposed was identical to the sanction calculated using the formula adopted by the Premier League solely for the Premier League vs Everton case on 10th August 2023.
Objective
To get the points deduction reduced, suspended or withdrawn on the basis it excessively punishes the wrong people. By raising the issue of moral hazard, we can raise issues specific to the case on the excessive severity and inappropriate target of those sanctions, and also to the wider debate around football regulation and the suitability of the Premier League as a self-regulating body.
Grounds for Appeal No. 8: Excessive Severity of the Sanction Imposed on Everton FC
Focus
In comparison with historical cases which involved more severe financial events in Premier League vs Portsmouth FC, and demonstrably worse cases of PSR violations in EFL vs Sheffield Wednesday, the sanction of a 10pt deduction appears not only severe, but excessively severe.
Method
The simple fact the Premier League’s own regulations on insolvency allow for a fixed 9pt deduction (E.33) if a club enters insolvency administration - a financial event far more serious than breach of PSR regulations.
EFL vs Sheffield Wednesday disciplinary commission initially imposed a 12pt penalty, following the sanctioning guidelines included in the EFL PSR regulations. Yet, this was reduced to 6pts on appeal, with the Appeal Commission rejecting two grounds for appeal while upholding Sheffield Wednesday’s argument that the sanction was excessively severe.
It is important to highlight that Sheffield Wednesday, unlike Everton who are building a new 53,000 seater stadium, sold their stadium in 2018/19 season in order to comply with PSR. Not only that, but the appeals commission documents that Sheffield Wednesday tried to backdate Heads of Terms documents on the sale of Hillsborough Stadium, with the explicit objective of ensuring compliance with PSR in 2017/18 season - a conscious attempt to deceive regulators.
Evidence/Reason
Premier League Handbook (E.33) and analysis of precedent cases including Premier League vs Portsmouth FC, EFL vs Sheffield Wednesday.
Objective
To get the 10pt deduction reduced, suspended or withdrawn on the basis that it is excessively severe.
This article will also be circulated via social media; reproduced under Creative Commons for any content creators who wish to do so; sent to all MPs offices, the Secretary of State for Culture Media and Sport Lucy Frazer MP, and to all Fan Advisory Boards at every Premier League club in the 2023/24 season.
Acknowledgements: Many thanks to so many who discussed these issues with me on both in person and across a range of online forums . Special thanks go to Neil P, Citizens of Surburbia, John_B58, Patric Ridge, and several other anonymous colleagues and contacts who’ve given feedback on the arguments presented.
Twitter/X: @mikeygow
Well written Mike. Readily understandable.