Everton’s 2024-25 accounts, released on Tuesday, show improved financials under the new owner, but also reveal how qualifying for Europe next season may give them a headache.
With seven games of the season remaining, David Moyes’ side sit eighth in the Premier League, with 11 English sides potentially able to qualify for next season’s continental competitions.
Getting into Europe would be a cause for celebration for a club who have not reached a UEFA tournament since the 2017-18 season. But it would also pitch the club into a rules-based gap that has opened up for English clubs as a result of different governing bodies employing different financial regulations.
Everton’s latest accounts detailed an £8.6million ($11.4m) loss last season, a marked improvement on the combined pre-tax deficit of £566m over the past seven years. Yet that reduced loss was only achieved through a £49.2m accounting profit booked through Everton Women and Goodison Park being moved into a standalone entity elsewhere in the club’s corporate structure.
Such transactions can be included in clubs’ calculations under profit and sustainability rules but PSR will be replaced by a squad-cost rule (SCR) from next season. SCR will target spending on a club’s football staff, limiting those costs to a proportion of club revenues and player sale profits. Gains on internal asset sales will make no difference to a club’s SCR calculations.
UEFA already employs SCR more strictly, but it is the European body’s football earnings rule that would come into focus should Everton qualify for continental competition.
PSR assesses clubs’ financial results over three seasons. UEFA’s football earnings rule, which will remain in place next campaign and for the foreseeable future, does the same but more stringently.
UEFA allows clubs a loss limit of €60million (£52m; $70m) over three seasons, around half the existing £105m limit in the Premier League. Clubs can increase that limit by €10m a season up to a maximum of €90m if they hit certain sustainability metrics, but English sides generally fail to meet that criterion due to debt incurred from transfers.
Everton qualified for the 2017-18 Europa League, their last continental competition, but fell at the group stage (Visionhaus/Corbis via Getty Images)
Everton do not explicitly disclose their own transfer debts, but from other figures in their accounts, it can be inferred they owe less in transfer fees than many other clubs. Yet, even with the maximum loss limit allowed under UEFA (around £78m today), a figure there’s no guarantee Everton would meet the requirements for, compliance looks tricky at this point.
UEFA’s rules discount internal asset sales, such as the movements of the women’s side and their old Goodison Park home into a separate group. As a result, the pre-tax starting point for Everton in 2024-25 without those sales would be a loss of £57.8m — even higher than their 2023-24 deficit. Across those two seasons, Everton’s pre-tax loss totalled £111m.
That does not constitute their football earnings result. Just as under PSR, clubs can deduct ‘good’ expenditure on infrastructure, youth academies, community, and the women’s team — albeit Everton’s ability to do the latter has likely disappeared now that the team sits outside of the men’s team entity.
But Everton spent more than £100m net on players last summer, investing substantially in the squad for the first time in years. Although there will be significant revenue benefits from the move to Hill Dickinson Stadium, another notable loss this season would be of little surprise.
Clubs competing in Europe in 2026-27 will be assessed on losses from 2023 to 2026. In other words, Everton will carry that £111m pre-tax loss into their UEFA calculation next season.
The Merseyside club are not in a unique position. Chelsea and Aston Villa breached the football earnings rule last year following their 2023-24 results. Each paid a fine and are now in settlement agreements with UEFA that limit future losses and places restrictions on squad numbers for European campaigns. If they breach those agreements, they would be banned from European football.
More recently, The Athletic projected Newcastle United and Nottingham Forest would breach the rule this season based on their expected 2024-25 figures. Neither of those clubs nor UEFA have confirmed a breach, but their recently released accounts do little to suggest an alternative. Newcastle have confirmed ongoing discussions with UEFA about rule compliance.
The above may all prove to be a moot point — but if Everton return to Europe next season, they will find themselves tackling new challenges in football’s regulatory morass.