Newcastle United CEO makes Everton FFP claim as two Premier League clubs face points deduction

Newcastle United CEO Darren Eales believes Everton's troubles with Profitability and Sustainability Rules (PSR) has focused the minds of other Premier League clubs.

Under PSR, clubs are permitted to lose a maximum of £105million over a rolling three-year reporting cycle. Those found guilty are at risk of a fine or a points deduction.

Everton received a 10-point deduction - the biggest punishment in the Premier League's history - in November after an independent commission found that the club's losses during 2021-22 amounted to £124.5m.

And the Toffees are now facing their second punishment after again being referred - along with Nottingham Forest - to the independent commission for alleged breaches in their accounts for the 2022-23 financial year.

Indeed, It was only last week Eales was asked about Everton's situation when Newcastle announced their latest accounts, which showed a £73.4m after-tax loss. Magpies boss Eddie Howe is keen to strengthen his squad in this month's transfer window but is struggling to do so as the club complies with PSR.

"I can only speak for myself, but look, the reality is the Everton judgement showed that there were teeth to the PSR regime and I think that's something that's probably focused a lot of minds within the Premier League, that this is something that's real," Eales told reporters.

“To be clear, right from our takeover, we've understood that that's the regime that we're in and our business plan and everything we do are premised on the basis that we're compliant.

“But I think it's fair to say that a lot of people probably didn't expect it to be the level that it was, and that's has certainly focused minds, I think."

Both Everton and Forest are set to argue their case. For the Toffees, who appealed their 10 point deduction, will continue to base their argument around the costs of building their new Bramley-Moore Dock Stadium, with work set to be completed before the end of the year.

Forest have spent around £250m on new signings since returning to the Premier League last year but will likely point to the £47.5m sale of Brennan Johnson to Tottenham Hotspur after the accounting cut off as mitigation for their losses.

In February 2023, Manchester City were charged by the Premier League with 115 alleged breaches of financial rules between 2009-10 season to the 2017-18 campaign. A hearing is set to take place later this year.