The Premier League (PL) handed Everton the most severe punishment in the competition’s history last week when the Merseyside club was docked 10 points for breaching Profit and Sustainability Rules (PSR). The Toffees now sit joint bottom with newly promoted Burnley and are facing yet another relegation battle. The onus is now on the PL to apply punishments of similar severity to other teams facing PSR allegations, leaving football fans wondering what’s in store for teams like Chelsea and Manchester City.
The blue sides of both London and Manchester have already faced allegations of misconduct in recent history with Chelsea receiving a two-window transfer ban in 2019 after FIFA charged them with 150 rule breaches involving 69 academy players; and Manchester City receiving a two-year ban (which was later overturned) from European competitions after being alleged to have inflated the value of a sponsorship deal to meet Financial Fair Play (FFP) rules, requiring them to balance their spending with their revenues and restricts clubs from accumulating debt
Chelsea’s newest allegations first surfaced when The Guardian reported doubt over the legitimacy of the club’s financial operations, alleging that a series of payments were made by offshore entities connected to previous owner, Roman Abramovic. While Man City are currently being investigated by the PL on 115 separate charges of financial misconduct.
Firstly, it’s important to note what Everton have been charged with and why those charges have equated to the punishment they received.
Everton were charged with a breach of the PL’s PSR, contained in rules E. 47-52 of its handbook. The basic premise of these rules is that clubs can only spend what they earn, and over a rolling three-year period, clubs are not permitted to exceed a loss of anything over £105m. An independent commission found that in the financial year 2021-2022, Everton’s loss over the previous years amounted to £124.5m, ultimately leading to their ten-point deduction penalty.
Chelsea, at present, haven’t been charged with anything. They are alleged to have made a series of payments by offshore entities connected to Abramovic that benefited the Blues in the acquisition of players and managers including Eden Hazard, Antonio Conte, Willian, and potentially more. It’s been suggested that these payments weren’t declared to the relevant authorities; and would’ve breached the PL’s PSR if they had been. It would also mean that Chelsea would have breached UEFA’s FFP rules; Chelsea admitted the errors to UEFA and were handed an £8.6 million fine specifically for “submitting incomplete financial information,” but will face no further punishment.
It’s difficult to predict at this stage what – if anything – will come of the allegations against Chelsea. It remains entirely possible that they won’t be charged at all, but with the PL cracking down on financial misconduct amidst talk of an independent regulator, (as some feel that the PL favour bigger teams and therefor conduct their investigations unfairly) it also remains entirely possible that they will face a similar or more severe punishment than Everton received. Chelsea’s owners are reportedly playing ball with the PL concerning these allegations, hoping that it’ll make the PL look at them more favourably; however, it is also reported that Everton’s owners attempted to do the same but weren’t let off as the PL judged them to have “misled” the investigation instead of assisting.
Manchester City’s charges are slightly different but could lead to punishments that are much more severe. They are being charged with 115 separate breaches of PSR which could’ve allowed them to account for a much smaller loss than what they actually incurred. The difference between this case and the others is not only the sheer number of breaches but also the way they have been committed.
The three main allegations against City are of consecutive breaches relating to player remuneration, manager remuneration, and sponsorship deals. Remuneration is defined as the gross financial compensation set out in a negotiated contract, which accounts for basic salary, sign-on fees, and any conditional payments.
Ten of the PL’s charges against City are for breaching rules “requiring a member club to include full details of player remuneration in its relevant contracts with its players,” between the seasons 2010/11 and 2015/16, in which two rule breaches were alleged per season. This rule extends to players’ image rights which should also be “set out in the contract with his club.”
In 2022, German publication ‘Der Spiegel’ published documents raising questions over image rights payments in which former player Yaya Toure received nearly £8m from the Abu Dhabi United Group (ADUG) which should have been paid by Man City instead and were most likely left out of City’s accounts declared to the PL.
Der Spiegel also uncovered eight more alleged rule breaches – which have led to charges from the PL – relating to “full details of manager remuneration in its relevant contracts with its manager,” relating to when Roberto Mancini was manager of the club between the 2009/10 season and the 2012/13 season.
The documents showed that the Italian’s base salary in his first contract with the club was £1.45m, but that his company in Italy was paid an extra £1.75m per year for him to work for Abu-Dhabi based club Al-Jazira, for which he was required to work just four days per year.
Sponsorship deals were also alleged to have been the cause of several rule breaches after Etihad (one of the main City sponsors) had only paid £8m toward sponsorship deals that were declared by City to be worth £167.5m over three seasons with the rest of the money coming from ADUG.
All these charges allegedly allowed City to comply with the PL’s PSR as the club claimed they were earning a lot more from sponsorship deals than they were, while also not accounting for money paid to both players and managers over several years.
In a nutshell, then; Chelsea seem to be relatively safe as regards points deductions in the near future. Even if they do get formally charged and found guilty, it’ll likely take years for the investigation to be conducted and a punishment to be decided. For City, though, the case is a little bit more worrying. With their trial coming in April of 2024, harsher punishments than Everton’s could be looming for the Manchester club before the end of the season. However, Having already won an appeal against UEFA in the Court of Arbitration of Sport (CAS), City may win the case against the PL too and face no punishment.
