Burnley have won a landmark legal case against Everton, with the Merseyside club ordered to pay nearly £40m in compensation after a Premier League commission found that a breach of financial rules cost Burnley their top-flight status. The ruling, the largest financial penalty ever imposed on a Premier League club, sees Everton pay £26m in damages and a further £9m in interest, a total of £35m.
The dispute dates back to the 2021-22 season, when Everton were found to have broken profit and sustainability regulations (PSR) over a three-year period. Both clubs presented expert evidence to simulate the effect of Everton’s £19.5m overspend on their points total. The commission found Burnley’s evidence, which projected a gain of between 3.85 and 7.13 points for Everton, “more compelling”, and concluded that “on the balance of probabilities, Everton’s breach of the PSR caused Burnley to be relegated”.
“Everton ordered to pay Burnley £35m after commission found PSR breach caused their relegation in 2022.”
Everton finished 16th that season on 39 points, with Leeds in 17th on 38 and Burnley 18th on 35. Had Everton been deducted even six points in 2021-22 rather than in 2023, Burnley argued, they would have stayed up. The same three-man panel that deducted Everton 10 points in November 2023 for the breach – later reduced to six on appeal – heard the compensation case. Because of the complexities of the accounting period, the Premier League cannot apply points deductions in the season the offence happens, but league rules do allow clubs to seek compensation from members that break rules and cause them loss.
Leeds United are reported to have agreed a settlement with Everton in September 2025, while Leicester City, Nottingham Forest and Southampton were also reported to have considered legal action. The verdict increases the likelihood of more clubs taking similar steps.
Everton have appealed the commission’s ruling, with sources saying they will “robustly and thoroughly” contest it. In a statement, the club said they were “surprised and angered” by a decision they believe “is fundamentally flawed in both law and fact”. The statement added: “This ruling sets a dangerous and unworkable precedent for English football, given it is constructed on a principle that a club can be in breach of financial rules at any point in a financial year. The club does not recognise the findings of the panel in determining Burnley’s relegation from the Premier League in May 2022 was caused by a sporting advantage gained by Everton due to a breach of profit & sustainability rules, for which a substantive sporting sanction has already been received.”
Everton – owned by Farhad Moshiri at the time of the breach and now under The Friedkin Group (TFG) – has received assurances from the Premier League that the sum owed will not form part of current PSR calculations. TFG insists the ruling does not affect its summer transfer plans or the club’s robust financial position. It is not known whether TFG will pursue Moshiri for the damages; Moshiri received only £25m when selling to TFG in December 2024. West Ham United previously paid Sheffield United £20m in a similar case, but this penalty dwarfs that. Everton maintain their appeal will succeed.