English Football Club Finances Are Under Scrutiny. Here’s Why.

Three English Premier League football clubs have been sanctioned or are under investigation for using accounting tricks to play down their financial losses. One of those clubs, Everton, was even deducted points in the standings, putting it at risk of being relegated, or demoted to a lower competitive division. The league, like others in Europe, enforces rules that cap clubs’ losses. But wealthy owners seek ways to bypass the rules to spend more on players.

Under Profitability and Sustainability Rules enacted in 2013, Premier League teams are permitted to lose a maximum of £105 million ($132 million) over any three-year period, which can include up to £90 million of equity injected by ownership. Though Everton originally claimed to have been within the limit, an independent commission appointed by the league said the club actually lost £124.5 million in the three years through the end of the 2022 season. In November, it was docked 10 points as punishment, putting it into the relegation zone for demotion to the second tier of English football. Everton has appealed.