Three of Everton’s competitors have informed the American investment company that they plan to sue the club for £300 million if they are found in violation of spending regulations later this month, potentially putting the proposed sale to 777 Partners at risk once again.
According to information obtained by Mail Sport, 777 has received a letter from Burnley, Leeds, and Leicester asking them if they are aware of their plans to sue Everton pending the conclusion of a Premier League independent tribunal on October 25.
The letter from the trio to 777 was originally directed to the Premier League, who is thought to have replied acknowledging the correspondence and claiming that they will forward the information to Everton‘s prospective new owners.
The three clubs feel the delay may have helped Everton escape relegation by avoiding a points deduction, with Leeds and Leicester going down on the last day of the season as Sean Dyche‘s team survived by two points. The three clubs are upset that Everton‘s allegations were not dealt with last season.
Prior to the conclusion of the last campaign, Mail Sport revealed that five teams, including Southampton and Nottingham Forest, had written to the Premier League to claim compensation in the event that Everton were found guilty. The situation has now worsened in advance of the independent hearing.
The Premier League has been officially notified in writing by Burnley, Leeds, and Leicester that they intend to file a lawsuit. It is believed that each club will want £100 million in damages based on the loss of top-flight revenue for one season.
Burnley was kicked out of the Premier League the season before Everton‘s expenditures caused controversy as they reported £372 million in three-year rolling losses, but the club was exempt from charges since it was given exemptions attributed to Covid.
Since they both finished 11 points below fourth-place Everton and would not have survived even if the Goodison Park club had been punished points, Southampton and Forest are said to have left the anti-Everton coalition. The former club managed to stay in the Premier League.
Everton was fined by the Premier League in March after releasing updated financial records for the previous year, which revealed a deficit of £313.5 million over the preceding three years.
Clubs are prohibited from losing more than £105 million over the course of three years by the Profit & Sustainability regulations, albeit expenses for community programmes, women’s football, and infrastructure are taken into account in the calculations.
Clubs are also entitled to reimbursement for losses specifically linked to Covid. Everton claims in their most current financial statements that Covid losses totaled £90.4 million over the previous three years, but that still leaves them with a loss of £223.1 million, which is substantially over the permitted amount.
The ambitions of 777 to purchase Everton are already under examination due to unanswered doubts about the source and sufficiency of their cash, so any legal action from rival clubs would deal a significant damage to those plans.
After reaching an agreement in principle to purchase the club from Farhad Moshiri last month, the Miami-based investment firm gave Everton almost £20 million to aid with cash flow concerns. However, the club remains in a precarious financial position that would be made worse by a protracted legal dispute.
After spending almost £750 million over a contentious seven-year period as manager, Moshiri has made it clear he would not supply any additional funding. In addition, the team has to find over £300 million to finish building their new stadium at Bramley-Moore Dock.
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