Burnley have won a landmark legal case against Everton, with a Premier League independent disciplinary commission ordering the Merseyside club to pay £35m in compensation – the largest financial penalty ever imposed on a Premier League club. The sum, comprising £26m in damages and £9m in interest, was awarded after the commission found that Everton’s breach of profit and sustainability regulations (PSR) caused Burnley’s relegation from the top flight in the 2021-22 season.
The same three-man panel that deducted Everton 10 points in November 2023 – later reduced to six on appeal – ruled that, on the balance of probabilities, Everton’s £19.5m overspend gave them a sporting advantage that cost Burnley their place in the Premier League. Burnley argued that if the points deduction had been applied in the 2021-22 season rather than two years later, they would have stayed up. Everton finished 16th on 39 points, two points above Burnley, who were 18th on 35. Leeds United finished 17th on 38 points and have already agreed a settlement with Everton, in September 2025.
“Everton ordered to pay Burnley £35m in record compensation after PSR breach caused their relegation in 2022.”
Both clubs presented expert evidence simulating the effect of the overspend on Everton’s points total. The commission found Burnley’s evidence – which projected a gain of between 3.85 and 7.13 points for Everton – “more compelling”. Premier League rules allow clubs to seek compensation from members found guilty of breaching rules, and the decision has widespread ramifications, increasing the likelihood of more clubs taking legal action. Leicester City, Nottingham Forest and Southampton were also reported to have considered action.
Everton, now owned by the Friedkin Group after Farhad Moshiri sold for £25m in December 2024, have appealed the ruling. The club said they were “surprised and angered” by a decision they believe “is fundamentally flawed in both law and fact”. In a statement, Everton 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.” Sources say Everton will “robustly and thoroughly” contest the ruling. The compensation payment will not affect Everton’s current PSR calculations, the Premier League has assured.
The case centres on the argument that had the points been deducted in 2021-22, Burnley would have had a greater chance of survival. Despite the verdict, the Friedkin Group insists the ruling does not affect the club’s summer transfer plans or its robust financial position. It is not known whether the new owners will pursue Moshiri for the damages.