Everton are teetering on the brink of financial turmoil and relegation as the possibility of being forced into administration looms large over the club.
The Daily Mail reports that the potential fallout from their financial indiscretion, which includes a daunting nine-point penalty, would almost certainly see the team relegated from the Premier League.
The dire situation has been exacerbated by compensation claims from Burnley, Leeds United and Leicester City, with the three clubs actively seeking redress for Everton’s spending breaches.
A second independent commission, comprising a three-person panel, is set to convene and assess the legitimacy of these claims, with a resolution expected before the season concludes.
Burnley, Leeds and Leicester are preparing compensation claims amounting to £100 million each, facilitated by their loss of Premier League income during seasons in which Everton overspent.
Despite having prospective buyers in 777 Partners, the Toffees will undoubtedly struggle to cover such a compensation bill that is set to total a mind-boggling £300m.
While 777 have committed to injecting £20m monthly for the club’s operational costs during the Premier League’s takeover assessment, they draw the line at covering a potentially hefty compensation bill.
The deal negotiated by Farhad Moshiri and 777 includes clauses that would significantly reduce the sale price if Everton are compelled to pay compensation or faces relegation.
The gravity of the situation raises concerns about the current regime’s ability to settle a substantial compensation bill, which could plunge the club into administration and trigger an automatic nine-point deduction.
The three clubs have 28 days to formally lodge their claims, with the Premier League confident that the case, along with Everton’s appeal against the ten-point penalty, will be settled before the end of the season.
Financial implications further complicate Everton’s predicament, considering 777 have already loaned the club over £40m, but they could be relegated to secondary debtor status if their takeover bid is rejected.
Everton have become the third club in Premier League history to receive a points deduction after Middlesbrough in 1997 and Portsmouth in 2010 – both of which faced relegation at the end of their respective seasons.
While Sean Dyche’s side are just two points from safety despite their ten-point hit, losing nine more points would almost certainly seal their fate.
