Leicester, Everton and Financial Fair Play: The context and likely outcome

This is the context of the charges made against Everton, as well as Manchester City. The allegation against the latter is that in the past they subverted the financial regulations by bogusly claiming the owner’s money as income from sponsorship. City have denied the allegations, but many people connected with the club would probably tell you, off the record, that the existing regulations unfairly advantage the traditional big clubs and that artificially inflating the City’s football income was the only way that the club could compete with them. Now, replete with the football income derived from their success – in domestic and European competitions – they can compete with the other rich clubs on a level playing field.

Much less subtly, Everton have been charged for simply incurring losses way above what FFP allows. In the three years up to last season, the Merseysiders incurred three year rolling losses of a staggering £313.5 million, way above what the rules allow for. Not surprisingly, clubs relegated from the Premier League over the past couple of seasons are unhappy that the Premier League failed to take action against Everton, who narrowly survived both times, sooner. Had, for instance, the Toffees incurred a deduction of just two points last season, the Foxes, by virtue of a superior goal difference, would have stayed up.

Whilst it is true that it was Leicester’s poor performances that got the club relegated last season, it is galling that the King Power outfit were unable to make signings over the summer of 2022 precisely because they were complying with FFP whilst Everton seemingly flouted the rules.

It has been regularly reported that the relegated clubs would take legal action to seek compensation against Everton if they are found guilty. The Mail has more recently claimed that Leicester City, along with Leeds and Burnley, have written to the Premier League and the potential new owners of Everton – an American investment firm – informing them of their intention to sue for £300m.

Such action might seem, to some, unlikely to succeed. But there is a precedent. In 2007, West Ham were found guilty of breaking Premier League rules over the third-party ownership of players when they signed Carlos Tevez. The striker was instrumental in keeping the Hammers up in the 2006-7 season. Sheffield United, who were relegated on goal difference, sued the East London club for compensation when the Premier League decided not to dock points, eventually winning £20m in an out of court settlement.

Should Everton be found guilty, and should Leicester’s legal action be successful, it could be a welcome financial boost to the Foxes in their campaign to return to the top-flight. On the other hand, the legal process is very slow. It took the Blades two years to win their case against West Ham. Hopefully, in two years’ time, the Foxes will be ensconced back in the top flight.