Everton Confident If Faced With A Second Battle Over Its Premier League Survival

Dominic Calvert-Lewin’s thunderous header from Demarai Grey’s free-kick, which sealed a remarkable 3-2 comeback win for Everton against Crystal Palace, might have felt like the conclusion of a difficult fight, but it was only setting the stage for another battle.

The Merseyside club barely had time to contemplate another season in England’s top-flight when news emerged that two sides the victory placed in jeopardy, Burnley and Leeds United, were planning an off-field response to events at Goodison Park.

Reports have since suggested the pair’s decision to write to the Premier
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League asking them to force Everton not to delete any data or communication relating to their commercial, sponsorship or transfer business was made before the Toffees secured safety.

The letter was based on the suggestion that Everton’s losses of $469 million over the past three years may have breached the league’s Financial Fair Play rules.

To find out definitively whether they have Burnley and Leeds United want the Liverpool-based side’s financial accounts independently investigated.

Premier League rules allow clubs to rack up losses of $132 million over a three-year period, with special dispensation permitted for Covid-19-related losses.

Everton claims the pandemic caused it to take a $214 million hit and reports claim a further $60 could also be written off.

These totals have raised eyebrows because clubs in comparable positions, like Newcastle United and Aston Villa, have been posting Covid losses of around the $60 million mark.

The Toffees responded to news of the two club’s letters by stating its total confidence that it is within the regulations.

“If they want to take legal action then they can do so by all means,” an Everton spokesperson was quoted in the press as saying.

“We have worked so closely with the Premier League to make sure we are compliant, we are comfortable we have complied with the rules.

“External auditors have told us what we can and cannot claim against the pandemic.”

Player values

One of the more contentious aspects of Everton’s description of its Covid-19 impact relates to player valuation.

In its most recent set of accounts, the club states that its ability to “generate material profits on player trading, which also yields significant wage amortization savings due to players no longer being contracted to the club, has unquestionably resulted in a material and negative impact on the club across the last two reporting periods.”

Essentially, it is suggesting the depressed transfer market is not enabling the club to recoup substantially on players it wants to get rid of.

Player sales are especially crucial in soccer club accounting because the whole sum of a transfer can be booked as profit immediately and can therefore be effective in swinging a set of results from red to black.

If you can’t shift players, both their wages and their transfer fees-which are spread over the course of their contracts or amortised-are a major expense for clubs to carry, particularly if they have been bought for a lot of money.

The trouble is a player’s potential transfer value is subjective. Many have pointed out that a player like Cenk Tosun, signed for $31 million, who has failed to impress in a series of loan moves to other Premier League sides was unlikely to be commanding a fee significant enough to push the club closer towards the black even in a good market.

Now Burnley has been relegated, the question is do they want to use lawyers to continue these debates?

The Tevez case – a lesson from history?

Thankfully there isn’t too much history of relegation battles moving from the field to the court. The one exception is the dispute between West Ham United and Sheffield United about Carlos Tevez.

The legal battle was sparked by the instrumental role the Argentine played in the Hammers’ 2006/07 Premier League survival.

Having initially struggled to impose himself in English soccer, following his shock move to West Ham in August 2006, Tevez became the Hammers’ talisman helping them to avoid relegation.

The Argentine scored seven times in the final 10 games of the season to push West Ham level on points with Sheffield United relegating the Blades on goal difference in the process.

However, it was subsequently discovered that the deal to buy Tevez has breached third-party ownership rules. A Premier League investigation saw the east Londoners fined, but spared a points deduction.

After initially seeing if it could appeal the Premier League’s decision in the courts, Sheffield United chose to pursue West Ham itself, suing the club for the cost of its relegation from the Premier League.

This route was ultimately successful, two years later West Ham agreed to pay compensation believed to be in the region of $25 million to Sheffield United to end the dispute.

But the key difference between this case and any potential legal claim against Everton, most likely by the now relegated Burnley, is that the rule-breaking in the Tevez saga was clear cut, and the Premier League had ruled it as such.

No sanctions have been issued against Everton and, as the club says itself, it has worked closely with the governing body to ensure compliance.

The clubs would have to hope they could unearth something which demonstrated Everton’s accounting was unjustified, which feels quite a long shot at the moment.

You have to wonder whether Burnley and Leeds United had one eye on the incoming independent regulator for English soccer, which has financial fair play as a key principle when they sent those letters.

A major question about the new body is how active it will be in involving itself in such disputes.

If it is to get involved, that would better than clubs taking each other to court, which devalues the competition and can create an ugly sideshow.