Everton have been told they must pay Burnley £35m in compensation after a landmark legal ruling that the club’s breach of financial rules caused Burnley’s relegation from the Premier League in 2022. The verdict, delivered by a Premier League independent disciplinary commission, is the largest financial penalty ever imposed on a Premier League club.
Burnley sued Everton after being relegated to the Championship at the end of the 2021-22 season. The case centred on the argument that had Everton been deducted points during that season rather than in 2023, Burnley would have had a greater chance of staying up. Everton were deducted 10 points in November 2023 for breaching profit and sustainability regulations (PSR) over a three-year period – a penalty later reduced to six points on appeal.
“Everton ordered to pay Burnley £35m after commission found PSR breach caused their relegation.”
The commission, which included the same three-man panel that deducted the 10 points, found that “on the balance of probabilities, Everton’s breach of the PSR caused Burnley to be relegated”. Both clubs presented expert evidence simulating the effect of Everton’s £19.5m overspend on points totals. The commission said it found Burnley’s evidence – which projected a gain of between 3.85 and 7.13 points for Everton – “more compelling”.
Everton finished 16th in 2021-22 on 39 points, four points above Burnley in 18th. Leeds, who finished 17th on 38 points, are reported to have agreed a settlement with Everton in September 2025.
The £35m award comprises £26m in damages and £9m in interest. Everton immediately appealed, with sources saying they will “robustly and thoroughly” contest the ruling. In a statement, the club said they were “clear in the belief the ruling is fundamentally flawed in both law and fact” and added that it “sets a dangerous and unworkable precedent for English football”.
Everton, now owned by The Friedkin Group (TFG) after Farhad Moshiri sold the club in December 2024 for £25m, insisted the compensation payment will not affect its PSR accounts for the current period. TFG said the ruling does not affect summer transfer plans or the club’s financial position. It is not known whether TFG will pursue Moshiri for the damages.
The verdict has widespread ramifications, increasing the likelihood of more clubs taking legal action against members who have broken Premier League rules. Leicester City, Nottingham Forest and Southampton were also reported to have considered action.