Everton’s points deduction has been reduced from 10 to six after an appeal – but there remains the potential for a chaotic end to this year’s Premier League relegation battle.
The new verdict moves Everton up to 15th and five points away from the drop zone.
It also leaves Burnley and Sheffield United an almost impossible task to save themselves.
But there are still more twists to come.
Everton and Nottingham Forest face fresh cases of alleged breaches of the Premier League’s financial rules for the assessment period ending with the 2022-23 season, with Forest’s hearing taking place on Thursday 7 and Friday 8 March while a date for Everton’s is still unknown.
The reality is that for Everton, they have gone over their limit for the three-year cycle ending in 2021-22, and two of those years count for their next hearing.
It will only be when this next process is complete that they will discover what damage their overspending has ultimately caused.
What the rest of the Premier League clubs think about the appeal panel’s new six-point verdict remains to be seen.
There was a desperation not to spend and land in trouble during last month’s transfer window. It will be interesting to see if six points proves to be a deterrent in the future.
BBC Sport looks at the key questions and what happens next.
What happens next in this Premier League season?
With the new six-point deduction determined, the Premier League can now move on to these two new cases which have to be heard by 8 April, although given that is a Monday, they are likely to be concluded the previous week.
On 8 April, there will still be six full Premier League match rounds to play, with the possibility of some rearranged games, meaning it is likely the relegation places will not have been decided.
So any decision that ends in more points deductions is virtually certain to be subject to an appeal, even as a pre-emptive strike by the clubs – and that brings the potential for chaos as there is no guarantee any appeal would be heard before the final games of the campaign on 19 May.
Those final-day fixtures include Burnley v Nottingham Forest and Arsenal v Everton.
In terms of actually playing matches, that is when the season ends. But in terms of regulation, the 2023-24 season remains ‘live’ until the annual general meeting in June when the relegated clubs transfer their certificates.
A ‘backstop date’ for the whole thing to be concluded is 24 May.
What are the financial rules?
The profit and sustainability rules (PSR) are aimed at promoting financial stability within the Premier League.
They were introduced in 2015-16, although the demand to protect clubs from overspending can be traced back to Portsmouth who in 2010 became the first – and so far only – Premier League club to go into administration after failing to find a buyer who would pay off spiralling debts of about £60m.
Current rules limit the losses clubs are allowed to make, although the figure can be inflated by external owner-driven funding.
However, the rules are due to be switched so, like Uefa, spending is linked to turnover.
Opponents of the rules argue they prevent significant investment from wealthy backers and, by definition, maintain the status quo of the biggest clubs remaining the richest and most successful.
How much are clubs allowed to spend?
Essentially, clubs are allowed to incur losses of £105m over a three-year reporting cycle.
The rules were loosened slightly during the Covid pandemic and there are various elements of club business, such as academies, that clubs can spend on without it affecting their profit and sustainability submissions.
It is also a quirk of accounting that selling ‘homegrown’ players – such as Manchester City’s £40m transfer of Cole Palmer to Chelsea last summer – has more of an impact than selling a player that has been bought for a fee.
What has changed this season and what changes are coming?
Everton were first charged in March 2023 over alleged profit and sustainability breaches. Their hearing was in October.
They were deducted 10 points in November and almost 12 months from that initial charge – after an appeal – their case is settled. That is a lengthy process, with Everton boss Sean Dyche saying the case may have had a psychological impact on his players.
Last spring, the clubs threatened with relegation over that period – Nottingham Forest, Southampton, Leeds, and Leicester, plus Burnley who had been relegated as Everton survived the season before – threatened legal action because the potential punishment was not going to impact upon the period when the rules were said to have been broken.
In response to this, the Premier League brought in new rules which meant clubs had to make their profit and sustainability submissions for the football financial year ending in June by 31 December in the same year.
Future changes are still to be confirmed but are set to be in line with Uefa’s Financial Fair Play (FFP) rules, which will eventually allow clubs to spend a maximum of 70% of their income on wages, transfers and agents’ fees.
Will Everton and Forest have points deducted?
Anything from a warning, to a fine, to points deductions is possible. However, in their written reasons over Everton’s appeal, the Appeal Board said an immediate points deduction and nothing less than a points deduction was appropriate.
Everton’s points penalty for essentially exceeding the limit by £19.5m has focused minds and shows why clubs are so keen to keep their spending within allowable limits.
Everton admitted they had spent more than they were allowed but initially put forward several mitigating factors for their breach, including the Covid-19 pandemic reducing the value of their players and the amounts they were able to generate by selling them.
What about Manchester City?
One response from some football fans assessing profit and sustainability charges tends to be ‘what about Manchester City?’
City were charged in February 2023 with more than 100 offences relating to their spending, which date back to 2009 and include allegations of hidden payments and non-cooperation.
Premier League chief Richard Masters recently revealed a date had been set for City’s hearing, but would not reveal when.
Because these are historic charges over multiple years, all of which are contested, the case is fundamentally different to the recently announced ones which are regarded as more straightforward, with the arguments over breaches likely to centre around differences of opinion over actual spending or the amounts that can be claimed back.