Everton announces appeal after decision requiring it to pay Burnley more than £35 million
Everton has announced an appeal against the decision of an independent Premier League disciplinary commission under which it must pay Burnley around £35 million in compensation because of the consequences of breaches of the Profitability and Sustainability Rules. According to the official summary of the decision, the commission awarded Burnley £26 million in adjusted loss and £9.1 million in interest calculated up to 31 July 2025, with interest continuing to accrue at an annual rate of 11.81 percent. The decision relates to the 2021/22 season, in which Burnley were relegated from the Premier League, while Everton stayed in the league with four points more. The Liverpool club claims that the ruling is legally and factually wrong and warns that it could create a difficult-to-implement precedent in English football. Burnley, on the other hand, presents the decision as confirmation that clubs that comply with financial rules must have protection in a competition in which irregularities can produce both sporting and economic consequences.
This is one of the most significant decisions in the recent history of the Premier League because it is not limited only to the deduction of points or a financial sanction toward the league, but concerns direct compensation to one club. According to the commission’s decision, Burnley’s claim was not an additional punishment, but a contractual claim for damages within the framework of the Premier League rules. The commission therefore did not determine only whether Everton had breached the financial rules, which had already been the subject of an earlier proceeding, but also whether that breach, on the balance of probabilities, caused Burnley’s relegation. Everton had already previously been punished with a points deduction for the same PSR period, but Burnley argued that the subsequent sporting sanction did not repair the consequences of the season in which the club lost its top-flight status.
How the dispute between Burnley and Everton arose
According to the official Premier League documentation, the original proceeding against Everton was opened after the league filed a complaint in March 2023 over breaches of the Profitability and Sustainability Rules for the period ending with the 2021/22 season. In November 2023, the commission found that Everton’s PSR calculation showed a loss of £124.5 million, or £19.5 million above the permitted threshold of £105 million. Everton admitted that a breach of the rules had occurred, but disputed the amount of the excess and the circumstances which, in its view, should have mitigated the sanction. The original penalty was a deduction of ten points, and after an appeal in February 2024 it was reduced to six points. That sanction was applied in the 2023/24 season, although the breach related to an earlier accounting period.
Burnley linked its compensation claim to the final phase of the 2021/22 season, when it was relegated from the Premier League. According to the summary of the commission’s decision, Burnley finished the season in 18th place, two positions and four points behind Everton, but with a better goal difference. Burnley’s basic argument was that the club would have remained in the Premier League if Everton had not had a sporting advantage created by breaching the PSR rules or if an appropriate points sanction had been applied in the season to which the breach related. The commission stated that Burnley is seeking to be put in the position it would have been in had Everton not breached the rules. Everton, however, disputed both the causal link and the amount of the damage, claiming that Burnley’s relegation cannot simply be attributed to another club’s financial breach.
The damages proceeding had a long procedural history. According to the summary and the full decision of the commission, Burnley had already tried in April 2023 to intervene in the original PSR proceeding, but that request was rejected, although it was then recognised that the club could have a potential compensation claim. In March 2024, Burnley informed Everton that it intended to continue the compensation proceeding after the appeal process over the points penalty had been completed. In the meantime, the commission also decided on several procedural issues, including Everton’s request for the commission to recuse itself and the question of whether Burnley could seek compensation as an additional sanction. The commission concluded that Burnley’s claim should be treated as a contractual claim for damages, which meant that it had to prove causation and the amount of loss.
Why the commission accepted Burnley’s argument
The central question was whether Everton’s financial overspending could be translated into a sporting advantage sufficient to change the outcome of the relegation battle. According to the official summary of the decision, Burnley relied on the expert evidence of Professor Rob Wilson and Will Daniels, who analysed the connection between player-related expenditure and points won in the Premier League over twelve seasons, from 2012/13 to 2023/24. Their analysis estimated that Everton’s overspend of £19.5 million could have produced a points advantage in the range of 3.85 to 7.13 points, depending on the scenario. In the final stage of the modelling, simulations of the results of the 2021/22 season were used, and according to the conclusion of Burnley’s experts, in all observed scenarios it was more likely that Everton, and not Burnley, would have been relegated. The commission accepted that this is an area in which the effect cannot be calculated with complete certainty, but concluded that Burnley’s analysis more convincingly satisfied the evidential standard of the balance of probabilities.
Everton argued that a breach of the PSR rules cannot automatically mean that Burnley were relegated because of that breach. According to the summary of the decision, the club accepted that a breach of financial rules can bring a sporting advantage, but disputed its scale and effect. Everton relied on the analysis of its expert Derek Holt, who argued that Burnley would have been relegated even after an adjustment for Everton’s overspend. The club also emphasised that part of the spending was ineffective and that greater investment in the squad does not necessarily mean more points. In that part, the commission accepted that Everton may not have achieved the effect it expected given the investment, but assessed that the team was nevertheless probably better than it would have been without spending above the permitted framework.
An important part of the defence concerned the so-called counterfactual, that is, the question of what Everton would have done had it had to avoid breaching the rules. Everton argued that it could have obtained an additional £19.5 million without affecting performance, for example by selling players or by acting differently in the market. The commission rejected such an approach as insufficiently realistic. According to the summary of the decision, the commission concluded that the only realistic counterfactual included earlier generation of additional profit from player sales and the related wage savings during the 2021/22 season. In other words, the commission assessed that the most favourable possible scenario for Everton cannot be assumed after the event if the available evidence from that period does not support it.
Another important question was when the breach of the rules arose. Everton argued that Burnley’s relegation on 22 May 2022 could not have been caused by a PSR breach which, according to the club’s position, could only be established after the end of the financial year on 30 June 2022. Burnley disputed this, arguing that such an interpretation would be contrary to the purpose of the rules. The commission accepted Burnley’s position and concluded that a breach of the PSR rules must be connected with the competitive season, and not exclusively with the formal end of the financial year. According to the summary of the decision, the commission found that Everton’s breach began before the end of the 2021/22 season and before Burnley’s relegation.
How the compensation was calculated
In the proceeding, Burnley sought a significantly larger amount than was ultimately awarded. According to the summary of the commission’s decision, Burnley’s damages expert Richard Boulton calculated a loss of £51.7 million before interest. Everton’s expert Louis Dudney argued the opposite, namely that after relegation Burnley had not suffered a financial loss, but that under his models it could have made a profit of £6.8 million or £18.2 million before interest. The commission considered in detail the differences between the models, especially in the area of operating profit and loss and player trading. The decision states that the experts calculated the difference between Burnley’s actual financial flows and the estimated flows in the scenario in which the club would not have been relegated from the Premier League.
The final amount shows that the commission did not fully accept either Burnley’s or Everton’s calculation. According to the official summary, the commission awarded Burnley £26 million of adjusted loss before interest, of which £24.6 million related to operating profit or loss and £1.4 million to player trading. Interest of £9.1 million calculated up to 31 July 2025 was added to that amount, bringing the total awarded amount to around £35 million. Since interest continues to accrue at an annual rate of 11.81 percent, the final amount that Everton would have to pay could be higher if the decision survives the appeal process. For that reason, British reports often describe the amount as almost £40 million, although the official summary of the decision states the basic total of £35 million on the interest calculation date.
Everton claims the ruling is wrong and dangerous for the league
Everton reacted extremely sharply after the decision. According to The Guardian’s report, the club said it was surprised and angry and that it considered the decision fundamentally wrong in both law and fact. Everton does not accept the conclusion that Burnley’s relegation in May 2022 was caused by a sporting advantage gained through a breach of the PSR rules, stressing that a significant sporting sanction had already been imposed for that breach. The club also claims that the decision creates a dangerous and unworkable precedent because, according to its interpretation, it starts from the idea that a club can be in breach of the financial rules at any point during the financial year. Everton believes that the decision misrepresents the evidence presented by its lawyers and announces that the appeal will be successful.
The club particularly emphasises that at the time of Burnley’s relegation it believed it was compliant with the PSR rules and that, in its view, it still had the possibility of improving its financial position before the end of the financial year by selling players. The commission did not accept that argument, but it could again be crucial in the appeal process. According to The Guardian’s report, Everton received confirmation from the Premier League that the amount it would have to pay Burnley will not be part of its current PSR calculations. This is important for the club because otherwise the compensation could trigger a new regulatory problem. Everton has meanwhile changed its ownership structure, and British media report that the club under the new ownership of The Friedkin Group claims that the ruling does not threaten its financial stability or its plans for the transfer window.
Burnley received the decision in a completely different way. According to The Guardian’s report, club chairman Alan Pace said that Burnley accepted the result on the pitch in 2022, but that it could not accept a competition that was later found to have been compromised by a breach of the rules. Pace said that the proceeding was initiated only after other solutions had produced no result and that the goal was to protect fair competition. His message reflects the wider question now facing the Premier League: how to ensure that financial rules are enforced quickly enough so that sporting consequences do not remain permanently uncorrected. Burnley’s success in this proceeding could strengthen the position of clubs that believe they have suffered measurable damage because of competitors’ rule breaches.
Possible consequences for the Premier League
The ruling is important because it shows that a points deduction does not have to be the only consequence of breaching financial rules. According to the Premier League rules and the interpretation in this proceeding, a club that proves it has suffered a loss because of an established breach by another club can seek compensation. Nevertheless, the Burnley case does not mean that every club that finished behind a punished rival will automatically be entitled to compensation. The commission had to establish a causal link between the specific breach of the rules, the sporting advantage and the financial loss, and that process required complex economic, statistical and legal analyses. In other cases, the result could be different if the points gap, the timeframe of the breach or the financial effects are not sufficiently convincing.
The decision could increase pressure on the Premier League to resolve financial proceedings more quickly. In Everton’s case, the sporting sanction for the 2021/22 season was imposed only in November 2023 and then reduced in February 2024. For Burnley, that was too late to change the outcome of the season in which the club was relegated from the league. Precisely that time gap was at the heart of the dispute: whether a subsequent points deduction is sufficient if the club that suffered the consequences has already lost Premier League status, revenue and sporting continuity. The commission answered that in certain circumstances there may be a right to compensation. Everton’s appeal will now test how legally sustainable that answer is.
The case is also being closely watched because financial regulation in English football has played an increasingly important role in recent years. In its official explanations, the Premier League states that the PSR rules are assessed according to an aggregated calculation of adjusted profit or loss, with certain permitted expenses that can be excluded, for example investment in infrastructure, women’s football, youth development and the community. The aim of such rules is to limit unsustainable losses and reduce the risk that financial strength or risky borrowing undermines the balance of the competition. The appeal process will therefore be important not only for Everton and Burnley, but also for the way future disputes between clubs will be conducted within the framework of the Premier League.
Until the appeal process is completed, the decision remains the subject of a legal battle, but its effect is already significant. Burnley has received confirmation of its claim that it suffered damage because of Everton’s breach of the PSR rules, while Everton argues that the commission wrongly connected a financial breach with the sporting outcome of the season. If the decision is upheld, clubs could more carefully consider not only the risk of points penalties, but also the possibility of direct compensation claims by rivals. If it is overturned or substantially changed, the Premier League will again face the question of how to effectively and promptly protect the integrity of the competition. In either case, the Everton and Burnley dispute has already become one of the key tests of financial supervision in English club football.
Sources:
- Premier League Independent Disciplinary Commission – official summary of the decision in the case Burnley v Everton, including the amount of compensation, interest, causation and the commission’s reasoning (link)
- Premier League Independent Disciplinary Commission – full redacted decision in the case Burnley v Everton with procedural history and detailed reasoning (link)
- Premier League – official announcement from November 2023 on Everton’s original penalty and the established excess above the PSR threshold (link)
- Premier League – official announcement from February 2024 on the reduction of Everton’s penalty from ten to six points after appeal (link)
- The Guardian – report on Everton’s and Burnley’s reactions, the announcement of the appeal and the wider context of the decision (link)