Football in meltdown as Everton are hit with 10-point deduction for breaking Premier League finance rules - as Manchester City and Chelsea fear they could be next

English football is in turmoil today after Everton was deducted 10 points by the Premier League as legal experts predicted Manchester City and Chelsea could be relegated if they are found guilty of flouring financial rules.

The Merseyside club will appeal after being have been plunged into the relegation because of the punishment due to a breach of profitability and sustainability rules, calling it 'wholly disproportionate and unjust'.

Everton could have been fined or given a transfer embargo but instead the Premier League plumped for a more severe points deduction, leaving them only above bottom club Burnley on goal difference after being 14th this morning.

Manchester City and Chelsea will have been watching carefully. City were hit with more than 100 financial fair play charges last season with the result of the investigation believed to be imminent.

And Chelsea's new owners went to the Premier League recently to admit they have incomplete financial information related to some transactions under Roman Abramovich, between 2012 and 2019.  

Stefan Borson, a lawyer who has advised Manchester City in the past, said that if City are found guilty, and Chelsea are charged and found guilty, both could be relegated based on the Premier League's punishment of Everton today. 

Burnley, Leeds and Leicester have confirmed their intention to sue Everton for a total of £300million after the club were found guilty of breaching financial fair play rules.

MailSport has learned that senior figures at the three clubs held talks this afternoon to reaffirm their plans to sue after the Premier League confirmed Everton's guilty verdict and 10-point deduction, the biggest in the competition's history.

Everton are currently pouring £550m, maybe more, into their new stadium which wont be finished before late 2024

The Toffees were referred to an independent commission in March for alleged breaches which related to the 2021-22 season and a hearing took place last month.

The Premier League pushed for a sizable points deduction to set a precedent after the club were charged with breaching financial rules back in 2021-22. The Toffees posted staggering financial losses of almost £372million over a three-year period.

That is more than £250m above what the Premier League's guidelines permits clubs to lose over a three-year rolling time frame. The technical alleged breaches related to accounting treatments, with the League arguing Everton breached profit and sustainability rules (PSR).

A Premier League statement this afternoon read: 'An independent Commission has imposed an immediate deduction of 10 points on Everton FC for a breach of the Premier League's Profitability and Sustainability Rules (PSRs).

'The Premier League issued a complaint against the club and referred the case to an independent commission earlier this year.

'During the proceedings, the club admitted it was in breach of the PSRs for the period ending Season 2021-22 but the extent of the breach remained in dispute.

'Following a five-day hearing last month, the commission determined that Everton FC's PSR calculation for the relevant period resulted in a loss of £124.5million, as contended by the Premier League, which exceeded the threshold of £105million permitted under the PSRs.

'The commission concluded that a sporting sanction in the form of a 10-point deduction should be imposed. That sanction has immediate effect.'

Everton will appeal the verdict in the strongest possible way. They strongly deny they did not breach PSR and their financial losses were due to the building of a new stadium at Bramley Moore Dock and whether the interest payments on that development were permissible.

The Toffees believe a sporting sanction is wholly disproportionate and completely inappropriate. Everton will point to previous cases such as when six Premier League clubs were given a meagre fine for trying to break the football pyramid with the European Super League.

The punishment brightens the spotlight on both Manchester City and Chelsea and a former advisor to City tweeted that the precedent set could later result in relegation for both Premier League heavyweights. 

City face 115 alleged breaches of the Premier League's financial rules and Chelsea could face scrutiny over alleged payments connected to former owner Roman Abramovich.

Stefan Borson, a lawyer who has advised City, tweeted: 'Without seeing the judgement/award -10 points for Everton feels harsh for a straightforward FFP [Financial Fair Play] breach to me.

'But reinforces that sanctions against City [if proven] and now Chelsea [if charged and admitted on the off-books payments] will be potentially relegation inducing.'

Portsmouth were the last Premier League team to be docked points when they entered administration in 2010 and were given a 10-point penalty, ultimately relegating them. 

Everton will point out that entering administration is a more serious breach than their alleged doings.

Financial rules were loosened by the Premier League during Covid with all clubs suffering from the pandemic in terms of lost gate receipts and commercial opportunities. But Covid hit Everton harder than most, while they also point to the Russian invasion of Ukraine as a mitigating factor.

That had a direct impact on finances due to suspended commercial agreements but also a pre-agreement for a significant naming rights' deal on Bramley Moore Dock with Russian oligarch Alisher Usmanov's USM which never came to fruition due to sanctions.

Everton also insist they have been open and transparent during the process. They were in an imposed agreement with the League since 2021 to work within strict financial guidelines - essentially a salary cap meaning they had to sell to buy with players.

That has been evident in the last four transfer windows with Everton's net spend during that period being -£28million, better than nearly all Premier League clubs in the time. The Toffees insist this is evidence of the club's efforts to comply.

Mail Sport understands Burnley and especially Leeds - who were all been narrowly relegated in the last two seasons, with Everton escaping the drop - had pressured the Premier League to issue a strong punishment.

An Everton statement read: 'Everton Football Club is both shocked and disappointed by the ruling of the Premier League's Commission.

'The Club believes that the Commission has imposed a wholly disproportionate and unjust sporting sanction. The Club has already communicated its intention to appeal the decision to the Premier League. The appeal process will now commence and the Club's case will be heard by an Appeal Board appointed pursuant to the Premier League's rules in due course.

'Everton maintains that it has been open and transparent in the information it has provided to the Premier League and that it has always respected the integrity of the process. The Club does not recognise the finding that it failed to act with the utmost good faith and it does not understand this to have been an allegation made by the Premier League during the course of proceedings.

'Both the harshness and severity of the sanction imposed by the Commission are neither a fair nor a reasonable reflection of the evidence submitted. The Club will also monitor with great interest the decisions made in any other cases concerning the Premier League's Profit and Sustainability Rules.

'Everton cannot comment on this matter any further until the appeal process has concluded.'