Everton have been ordered to pay Burnley nearly £40m in compensation after a landmark legal case over the Premier League's financial rules. It is the largest financial penalty ever imposed on a Premier League club and sets a precedent that could reshape English football.
Profit and sustainability regulations (PSR) are the Premier League's financial fair play rules. They limit how much money clubs can lose over a three-year period. Everton were found to have breached PSR by £19.5m over the four years up to June 2022. In November 2023, a Premier League commission deducted Everton 10 points, later reduced to six on appeal. But that deduction was applied to the 2023-24 season, not the 2021-22 season when the breach occurred. Burnley were relegated at the end of the 2021-22 season, finishing 18th on 35 points, four points behind 16th-placed Everton. The Clarets argued that if Everton had been deducted six points in 2021-22, they would have stayed up and Everton would have gone down.
“Explains Premier League financial rules and how clubs can claim compensation, using the Everton-Burnley case.”
Premier League rules allow clubs to seek compensation from other members if rules are broken and cause them loss. Burnley sued Everton, and a commission (the same three-man panel that handled the points deduction) ruled in Burnley's favour. It awarded Burnley £26m in damages and £9m in interest, totalling nearly £40m. The commission said it 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".
For UK football fans, this case matters because it opens the door for more clubs to seek financial compensation from rivals who break the rules. Leicester City, Nottingham Forest and Southampton were also reported to have considered legal action against Everton. More significantly, the verdict raises questions about what could happen if Manchester City are found guilty of the 115 charges brought against them by the Premier League. City's charges relate to a period from 2009 to 2018, during which they won three Premier League titles. If found guilty, the compensation claims from clubs who missed out on European places, prize money or survival could dwarf the Everton penalty.
Q: What are Profit and Sustainability Rules (PSR)? PSR are Premier League financial regulations that limit clubs' losses over a three-year period. They are designed to prevent clubs from spending beyond their means. Everton broke PSR by £19.5m over the four years to June 2022.
Q: Why did Burnley sue Everton instead of just relying on the points deduction? Premier League rules allow clubs to seek compensation from other members that are found guilty of breaching rules. Burnley argued the breach cost them Premier League status, and the commission agreed, awarding nearly £40m in compensation.
Q: Can other clubs now make similar claims? Yes. Leeds United are reported to have already agreed a settlement with Everton in September 2025. Leicester, Nottingham Forest and Southampton were also considering legal action. The precedent could lead to a wave of compensation claims, especially if Manchester City are found guilty.
Everton have appealed the commission's ruling, calling it "fundamentally flawed in both law and fact". Their current owners, The Friedkin Group (TFG), say the ruling does not affect their summer transfer plans or the club's financial position. Meanwhile, the football world awaits the verdict on Manchester City's 115 charges, a decision that could have far greater financial consequences.