Why Everton are still in major trouble despite their reduced points deduction

Everton's points deduction may have been reduced - but their immediate future looks as bleak as ever.
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Let’s start with the good news for Everton fans – the club have had their points deduction for breaching the Premier League’s profit and sustainability rules (PSR) reduced from 10 points to six on appeal. That immediately lifts the Toffees up to 15th place, with two teams and five points separating them from the relegation zone. The bad news, however, is that just about everything else still looks pretty bleak.

The appeals board’s decision to reduce the sanction for an overspend in the 2021/22 season hinged on two primary factors. Firstly, that while the club’s overspend was significant and they had misrepresented the debt they carried as a result of the construction of their new stadium at Bramley Moore Dock, it was neither within the purview of the independent board who made the initial 10-point deduction to consider that fact because it was not a part of the Premier League’s allegations, nor was it “anything other than an innocent mistake.”

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Secondly, the reduction comes about because the initial 10-point penalty was not in line with the existing precedent for such sanctions set by the EFL. It’s worth recalling that the Premier League themselves asked the independent board who handed down the initial penalty for a six-point penalty in the first instance. This now brings the Premier League’s punishments into line with those elsewhere in the English football pyramid, which makes everything seem somewhat more just and reasonable.

The first point is still concerning from an Evertonian perspective. It does not speak of a club which has its accounts well organised or its financial ducks in a row. It may not have been within the purview of the independent board to consider the misrepresentation of the club’s debt as a factor in their judgement, but the issue still exists.

Everton’s ownership, led by wantaway chairman Farhad Moshiri, has been a problem for a while now. The early part of their reign saw substantial but poorly-directed spending, but that has now turned into an unwillingness to invest in what they appear to see as a company that they are done putting money into. They want to sell and move on.

This comes against a backdrop of estimated losses of more than £400m over five years – in part due to the new stadium – and concerns from auditors which highlighted “material uncertainty” over the club’s capacity to meet its obligations if they are relegated. A drop to the Championship could threaten the very existence of the club.

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This would be less of a pressing concern if good options for new ownership presented themselves. Moshiri is seeking a deal worth around £550m for his 94.1% stake in the club, which appears to have priced several potential investors out. The only option, as it stands, are 777 Partners, who have been accused of financial malpractice and who have a growing football empire which they are struggling to financially sustain. A recent downgrade to their credit rating has jeopardised the proposed takeover, which may struggle to earn Premier League approval anyway due to concerns over the source of the investment group's funds.

The result is a stalemate at boardroom level which leaves the club in an increasingly precarious position that gets worse the longer it continues. As investment stagnates, the risk of relegation grows, and there is no willpower to continue funding purchases to improve the playing squad. Given that Everton have been on poor form of late, that bodes badly even if they do survive this season.

Everton started well this season, regardless of their points deduction, and were playing like a mid-table side – but they have gone downhill since. They haven’t won any of their last six games in all competitions and haven’t picked up three points in the Premier League since beating Burnley at Turf Moor on 16 December last year. In a year in which there were fewer poor teams languishing at the lower end of the table, they would be in the bottom three.

The points deduction may have had a psychological impact themselves, of course, and manager Sean Dyche has certainly suggested it as a factor in the team’s recent downturn.

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“It changes the perception, it changes the feel, it changes the fan base, it changes the feel of performances,” said Dyche a few days ago, ahead of the 1-1 draw with Brighton & Hove Albion. “That's just a fact. We all measure it differently when the team are there, top, middle or bottom.

"Does that affect the team whilst the process is going? At first everyone says obviously not because you win four, but you could argue there is a delayed effect."

Whether that holds true or is simply an attempt to deflect criticism of his players, Dyche’s side has struggled severely to score goals, drawing a blank in four of their last seven league games. They are defensively stout and disciplined in midfield, but seem unable to create enough chances for a lacklustre forward line to score the goals required.

Still, they are probably sufficiently better - just about - than the teams below to them to survive despite a six-point deduction. Sheffield United and Burnley look beyond salvation, Luton Town are struggling to keep their heads above water despite a deep well of resolve and neither Nottingham Forest nor Brentford are especially convincing at the moment. The problem is that six points may not be the last of it.

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Everton face a second charge for breaching PSR regulations relating to alleged overspending in the 2022/23 season – Forest are in the same boat. The new ruling may have set the bar at six points if Everton are found guilty (although it could be greater or less depending on aggravating or mitigating factors) but even at a less harsh penalty point, another six points off the total would still dump Everton back into the relegation zone unless Forest endure the same fate, and if there has been a psychological impact then it would likely only become more profound.

It would be flagrantly unfair for punishments to be handed down in the same season for infractions which took place in different years, of course, but that is a part of the process which the Premier League has not yet nailed down or elucidated upon the details of. Six points this season and next would be tough to take on its own. 12 in one year could be fatal, especially given the financial dangers that relegation appears to pose for Everton.

Everton are a club trapped in a pernicious system that starts from the boardroom at Goodison Park and rolls down. Financial mismanagement begets points deductions, a lack of investment leaves the coach with a lacklustre squad, and the whole thing is propped up on a pile of debt which could become unsustainable if all of the other problems end up causing relegation.

So how do they turn things around? The honest answer is that there is no end in sight. If Moshiri won’t sell at a reduced price and the only option for new owners are 777 Partners – a potential frying-pan-to-fire situation if ever there was one - then either Everton limp on with a disinterested owner who won’t provide the funds necessary to overcome the points deductions they’re picking up, or they hand the reins over to owners who only offer a different sort of uncertainty.

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It may yet be that Everton escape a second punishment but pushing it into next season probably wouldn’t offer too much relief unless investment comes in from somewhere. As it stands, Everton are likely to lose key players like Amadou Onana, Jarrad Branthwaite and James Garner this summer, and the money may not be put up to replace them adequately. The current squad has its faults already – its skeleton will not look much like a side with the quality required to avoid relegation.

Everton need money to come from somewhere, and they need it to come from owners who can be relied upon to be responsible custodians of the club. Sadly, that is a prospect which seems distant.

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