Everton have been ordered to pay Burnley nearly £40 million in compensation following a landmark legal case over breaches of the Premier League's Profitability and Sustainability Rules. The ruling represents the largest financial penalty ever imposed on a Premier League club.
The decision came from a Premier League independent disciplinary commission made up of the same three-person panel that deducted Everton 10 points for the same breach in November 2023. The compensation comprises £26 million in base damages, with £9.1 million in interest plus accrued interest added on top.
Burnley brought the legal action after being relegated to the Championship at the end of the 2021-22 season. The club argued that had Everton received their points deduction earlier, in 2021-22 rather than 2023, Burnley would have remained in the Premier League and Everton would have gone down instead. The ruling was based on a "loss of chance" principle, meaning Burnley lost the opportunity to stay up due to Everton's rule breach.
Under Premier League rules, clubs can seek compensation from others found guilty of breaking regulations. The verdict has significant implications for English football, as it now opens the door for other clubs to pursue similar legal action. Several Premier League clubs have reportedly sought legal advice in case Manchester City is found guilty in their long-running case, with the possibility that clubs could sue for missing out on titles or European qualification.
Everton responded to the ruling with a statement saying they were "surprised and angered" by a verdict they believe is "fundamentally flawed in both law and fact". The club has appealed the commission's decision. They argue they believed they were PSR compliant when Burnley were relegated in May 2022 and could have taken action such as selling players had they known otherwise. Everton also point out they have already suffered financial consequences, including a six-point deduction and around £6 million in lost revenue from being demoted in the 2022-23 season.
The Premier League has assured Everton that the compensation sum will not count towards this year's PSR calculations. The club is now owned by The Friedkin Group following Farhad Moshiri's sale in December 2024. Moshiri received only £25 million from the sale, and it remains unclear whether the new ownership will pursue him for the damages owed to Burnley.
Burnley chair Alan Pace said the club's action was always about making football fair. "Clubs that comply with the rules deserve to compete on a level playing field," he said. The independent commission confirmed that a rule was broken and a competitive advantage was improperly gained.