Another PSR Punishment for Everton? This LATEST Update on Manchester City’s Legal Case COULD Mean Everton Would Suffer from….

Everton Face Potential PSR Penalty Amid Manchester City Premier League Case

Everton’s support for Manchester City in their Premier League dispute may have unintended consequences. The Toffees, still reeling from their own Profit and Sustainability Rules (PSR) breaches, could face further penalties due to their stance on Associated Party Transaction (APT) rules.

Everton were docked 10 points, later reduced to six, for breaching PSR in 2021-22. They also received a two-point deduction for another breach related to losses in the PSR assessment window up to 2022-23.

The ongoing hearing into Manchester City’s 115 charges has sparked a “civil war” within the Premier League. City’s legal challenge to the APT rules, which govern commercial deals with owner-related companies, has been supported by Everton.

However, this backing may backfire. A former Man City adviser and legal expert warns that changes to the APT rules could retroactively affect Everton’s soft loans, potentially triggering another PSR hearing for 2023-24.

Everton have £451m in soft loans, which could be treated as subsidies under the revised APT rules. If applied retroactively, this could lead to another PSR breach.

Stefan Borson notes: “If changes to the way that the PSR system views soft loans… are applied retroactively, it could theoretically be bad news for Everton… City’s position on shareholder loans appears to be that historic loans should count for PSR calculations with no adjustment.”

Borson cautions that it’s “very unlikely” the 2023-24 PSR tests would count market interest rates for shareholder loans. However, the uncertainty adds to Everton’s woes.

The impending takeover by Dan Friedkin will likely write off or convert the soft loans to equity, but this won’t exempt Everton from potential punishment if retroactive changes are applied.

Everton’s complex situation includes:

1. Ongoing compensation claim from Burnley
2. Confirmed hearing over 2021-22 breach
3. Potential PSR penalty for 2023-24

The Toffees’ support for Manchester City’s APT challenge may have inadvertently increased their own regulatory risks.

Key Points:

• Everton’s support for Manchester City’s APT challenge may lead to further PSR penalties
• Changes to APT rules could retroactively affect Everton’s soft loans
• £451m in soft loans potentially treated as subsidies under revised rules
• Dan Friedkin’s takeover won’t exempt Everton from potential punishment
• Everton face multiple regulatory challenges, including Burnley compensation claim and confirmed hearing