Everton Ordered to Pay Burnley £35 Million Over PSR Breach

There have been several past cases in which football clubs successfully sought compensation from other clubs, but the Everton matter is being seen as a major new development. West Ham United paid Sheffield United £20 million in an out-of-court settlement in 2009 after Sheffield United pursued action over the signings of Carlos Tevez and Javier Mascherano, which breached third-party ownership rules. In 2022, Derby County and Middlesbrough reached what BBC Sport reported as a resolution, believed to be worth about £2 million, after Middlesbrough claimed Derby’s financial breaches cost them a Championship play-off place in the 2018-19 season.

The Everton case is different because Burnley has taken action over an alleged sporting loss directly to a league commission, rather than relying only on a dispute between clubs and the league. Legal experts say this could mark a significant shift in football governance. Jan Levinson, a partner at Foot Anstey, said the case suggests financial rule breaches may no longer be treated only as regulatory matters between a club and the league. If another club can prove that it suffered a genuine commercial loss because of those breaches, the club may now have a route to substantial compensation.

Burnley’s argument is understood to be that Everton’s alleged profitability and sustainability rules breach gave Everton a sporting and financial advantage during a season when the relegation battle was extremely close. If that connection is accepted, the consequences could be serious, because the cost of a breach might extend beyond a points deduction or a fine and include direct compensation claims from rival clubs.

The possible impact goes beyond Everton. The ruling could have implications for Chelsea, who were fined £10 million after admitting to making £47 million in secret payments to unregistered agents and third parties in transfers between 2011 and 2018, rather than receiving a points deduction. It could also affect Manchester City if they are found guilty of the 115 charges against them relating to alleged financial rule breaches between 2009 and 2018. Manchester City deny all of those charges.

If clubs believe that another team’s rule breaches affected their chances of success in the Premier League, they may also consider pursuing compensation claims of their own. That would create a new layer of risk for clubs under investigation, because financial compliance could become not only a regulatory issue but also a litigation issue. As Levinson noted, the stakes for clubs accused of breaching financial rules are now potentially much higher, with consequences that could reach far beyond traditional punishments imposed by football authorities.