Why did the Premier League deduct 10 points from Everton?

The supporters of Everton might get used to watching their team play in the championship for the first time in the club's history.

The Merseyside club got 10 points deducted from their total accumulated points this season after they were found guilty of breaching the financial fair play rule in the Premier League. The league body confirmed that their points have been deducted which will see them drop to 19th in the table, only above bottom-placed Burnley on goal difference.

The Premier League confirmed in a statement released that Everton breached the Premier League profitability and sustainability rules at the end of the 2021/22 season.

The statement read thus;

"An independent commission has imposed an immediate deduction of 10 points on Everton FC for a breach of the Premier League’s profitability and sustainability rules (PSRs). The Premier League issued a complaint against the club and referred the case to an independent commission earlier this year. During the proceedings, the club admitted it was in breach of the PSRs for the period ending Season 2021/22 but the extent of the breach remained in dispute.
Following a five-day hearing last month, the commission determined that Everton FC’s PSR calculation for the relevant period resulted in a loss of £124.5million, as contended by the Premier League, which exceeded the threshold of £105million permitted under the PSRs. The commission concluded that a sporting sanction in the form of a 10-point deduction should be imposed. That sanction has immediate effect.”

However, Everton are planning to defend their stand, they have called the league's decision unjust and not appropriate in a statement which was released by the club.

"Everton Football Club is both shocked and disappointed by the ruling of the Premier League’s commission. The club believes that the commission has imposed a wholly disproportionate and unjust sporting sanction. The club has already communicated its intention to appeal the decision to the Premier League. The appeal process will now commence and the club’s case will be heard by an appeal board appointed pursuant to the Premier League’s rules in due course. Everton maintains that it has been open and transparent in the information it has provided to the Premier League and that it has always respected the integrity of the process. The club does not recognise the finding that it failed to act with the utmost good faith and it does not understand this to have been an allegation made by the Premier League during the course of proceedings. Both the harshness and severity of the sanction imposed by the commission are neither a fair nor a reasonable reflection of the evidence submitted. The club will also monitor with great interest the decisions made in any other cases concerning the Premier League’s profit and sustainability rules. Everton cannot comment on this matter any further until the appeal process has concluded."

What are profitability and sustainability rules?

The rules states that all Premier League clubs are assessed for their adherence to the competition’s profitability and sustainability rules each year.

Their compliance with said rules is assessed by reference to the club’s PSR calculation, which is the aggregate of its adjusted earnings before tax for the relevant assessment period.

Rules dictate clubs are allowed to lose a maximum of £105million ($128.4m) over three years, but Everton recorded losses of £370million between 2018 and 2021.