Burnley have won a landmark legal case against Everton over a breach of Premier League financial rules, with the Merseyside club ordered to pay £35m – the largest financial penalty ever imposed on a Premier League club.
The case, heard by a Premier League independent disciplinary commission, related to the 2021-22 season when Everton were found to have broken profit and sustainability regulations (PSR) by £19.5m over a three-year period. 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 breach of the PSR caused Burnley to be relegated”.
“Everton ordered to pay Burnley £35m after commission ruled PSR breach caused relegation in 2022.”
Burnley had argued that the breach impacted their chances of staying in the Premier League, and sought compensation for the losses associated with being relegated. The commission awarded £26m in damages and a further £9m in interest. Both clubs presented expert evidence to simulate the effect of the overspend on Everton’s points total, and the commission found Burnley’s evidence – which projected a gain of between 3.85 and 7.13 points – “more compelling”.
Everton finished 16th in 2021-22 on 39 points, with Leeds in 17th on 38 and Burnley 18th on 35. Everton were deducted 10 points in November 2023, which was reduced to six on appeal and applied in the 2023-24 season. Burnley’s case centred on the argument that had those points been deducted in 2021-22, they would have stayed up.
Everton have appealed, with sources saying they will “robustly and thoroughly” contest the ruling. In a statement, the club said they were “surprised and angered” and “clear in the belief the ruling is fundamentally flawed in both law and fact”. They 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.”
Premier League rules allow clubs to seek compensation from other members found guilty of breaching rules. 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 Friedkin Group, which took over Everton from Farhad Moshiri in December 2024, said the ruling does not affect the club’s summer transfer plans or its robust financial position. Everton have moved into Hill Dickinson Stadium since the breaches in question.
Any compensation payment will not impact Everton’s PSR accounts for the current period. The club’s appeal will now be heard, with Everton insisting it will be successful.