Burnley to receive £40m compensation from Everton, according to reports
Clarets win legal dispute against Everton for breaching Profitability and Sustainability Rules
Everton have been ordered to pay nearly £40m in compensation to Burnley, according to the website The Lawyer.
The Clarets are believed to have won a legal dispute after the club sued the Toffees for breaching Premier League rules.
The case went to trial in the autumn, with the Premier League expected to publish the judgment sometime this week. The Toffees have already appealed against the decision.
And the club published a strongly-worded statement on their website on Wednesday afternoon.
It read: “Everton Football Club is surprised and angered by the decision of a Premier League Independent Disciplinary Commission to order a compensation payment to Burnley Football Club in relation to Everton’s PSR breach in June 2022.
“Everton has appealed the decision and is clear in its belief the ruling is fundamentally flawed in both law and fact.
“The club does not recognise the findings of the panel in determining Burnley’s relegation from the Premier League in May 2022 was caused by a sporting advantage gained by Everton due to a breach of Profit & Sustainability Rules, for which a substantive sporting sanction has already been received.
“This ruling sets a dangerous and unworkable precedent for English football, given it is constructed on a principle that a club can be in breach of financial rules at any point in a financial year.
“Everton believes the panel’s ruling misrepresents the clear evidence presented by its legal representatives and that an appeal will be successful.
“The club is confident of its ongoing PSR compliance and has also obtained confirmation from the Premier League of its clear position that this ruling should not be the cause of any future PSR sanction.
“Evertonians can be assured that ownership are focused, with strengthened resolve, on delivering their vision of returning Everton to the top echelon of English football.
“No further comment will be made on this matter until the appeal process has been successfully concluded.”
Everton, defended by Pinsent Masons, were deducted 10 points in late 2023 for breaches of the Profitability and Sustainability Rules (PSR) in the 2021/22 season.
This was reduced to six points on appeal in early 2024. Burnley, who were instructed by King & Spalding, subsequently sued Everton after it was relegated to the Championship in 2022, the same year that Everton breached the PSR.
The article in The Lawyer said: The Premier League’s rules allow for clubs to seek compensation from other clubs for rule breaches that cause them loss.
“It is believed that part of Burnley’s claim is that, had the six point deduction taken place in 2022, Everton would have been relegated and Burnley would have stayed in the Premier League.
“Burnley’s case is reportedly based on the legal principle of ‘loss of chance’. In such a situation, a club like Burnley might argue that, although it was not certain that it would have stayed in the Premier League, Everton’s rule breaches deprived it of a real chance of doing so.”
Dropping down to the Championship typically brings with it substantial revenue losses. Conversely, with the winner promoted to the Premier League, the Championship play-off final is considered to be worth about £200m and described as the richest match in football.
Reports suggested that Burnley had sought at least £50m from Everton in compensation. Clubs including Leicester City, Leeds, Nottingham Forest and Southampton had also planned to bring proceedings against Everton, but later dropped their claims.
The Lawyer added: “The decision is believed to be the first of its kind and will likely have a significant impact on future financial fair play disputes, with clubs that breach rules facing not only a sporting sanction but also the possibility of compensation claims from other clubs.
“Manchester City and its rivals will be closely following the appeal and any legal precedent it sets. Several Premier League clubs are understood to have lined up legal counsel to sue City for compensation, should it be found to have breached League rules in the 115 charges case brought against it.