Prepared 11 June 2026  

BURNLEY-v-EVERTON-Compensation-Decision-with-Attachments-Redacted

Previous Article (September 17, 2025)

  Sources: PLJP 2023/3 (290pp, June 2026) | theesk.org (Quinn, Sept 2025) | Allied Maples | Durham Tees Valley | Recovery Partners v Rukhadze | Sheffield Wednesday v Football League  

Everton, through their own media channels have set out compelling reasons as to why they believe the ruling of the Commission is “fundamentally flawed in both law and fact”. The club statement can be read here.

I do not propose to repeat Everton’s arguments verbatim, but set out a minimum of six arguments for appeal:

The case for appeal:

The Commission has made an award of £26 million against Everton Football Club Company Limited (plus pre-award interest) on the basis of findings that are, by any reasonable analysis, not merely wrong in result but structurally defective in reasoning.

This article submits there are at least six grounds upon which this decision cannot stand and should be remitted or set aside on appeal.

Before setting out those grounds with precision, it is necessary to be clear about what this case actually is, because Burnley and the Commission have, at critical points, been willing to blur the line. 

This is not a case about whether Everton broke the Premier League’s Profitability and Sustainability Rules. Everton admitted that it did, and it paid for it with a six-point deduction. 

This is a case about whether that admitted breach, which the Commission found to exceed the permitted loss limit by £19.5 million across a four-year rolling period, caused Burnley Football Club to be relegated from the Premier League in May 2022. 

And then, separately, about whether that relegation caused Burnley the specific loss claimed.

On both questions, the Commission’s answers are infected by the fundamental problems identified below. 

It accepted probabilistic modelling based on a 12-year dataset whose own creator admitted produced results that were ‘improbable’ when applied to individual seasons. 

It treated a 51.47% probability as proof on the balance of probabilities without grappling with what that number actually means in a binary causation analysis. 

And it awarded £26 million against a respondent who, on any objective reading of the commercial evidence, had suffered no net loss.

Causation: The Commission treated probability as proof

This is the most important ground of appeal and, in my opinion, the most compelling. 

The Commission found causation proved on the balance of probabilities by reference to the Wilson/Daniels probabilistic model. That model, in its most favourable scenario for Burnley (Scenario 4, covering the four years of the PSR period), produced a 51.47% probability that Everton would have been relegated. Even after Burnley’s own inflation-adjusted recalculation, the equivalent figure was 50.51%.

The Commission found that a 51.47% probability of one outcome constitutes proof on the balance of probabilities that that outcome would have occurred. This is legally and analytically wrong. It is not how probability works and it is not what ‘balance of probabilities’ means.

The balance of probabilities test requires a tribunal to be satisfied, on the whole of the evidence, that a given event is more likely than not to have occurred. That standard requires something considerably more than a coin-flip with a slight tilt. Where probabilistic modelling produces an output this close to 50%, the Commission was not entitled to treat the midpoint of uncertainty as the point of legal proof. 

It was required to ask: given the acknowledged limitations of the modelling, the admitted improbability of some outputs, and the inherent randomness of football results, does the evidence as a whole satisfy us that Burnley would have survived relegation? 

The answer, on honest analysis, is that it does not.

The Commission’s own reasoning exposes this problem. At paragraph 167 it acknowledged: ‘Wilson/Daniels’ scenario 4 shows a probability of 51.46% to 46.71% in favour of Everton rather than Burnley being relegated (50.51% to 47.59% under the inflation adjusted calculation).’ These are the Commission’s own words. A margin of 3.76 percentage points, or 2.92 after adjustment, separating the two outcomes is not a ‘balance of probabilities’ in any legally meaningful sense. It is statistical noise.

The established principles confirm this. 

In Allied Maples Group Ltd v Simmons & Simmons [1995] 1 WLR 1602, the Court of Appeal distinguished between past facts (proved on balance of probabilities) and the assessment of ‘loss of a chance’ in future or hypothetical events (assessed by reference to the percentage probability). 

In a hypothetical counterfactual of this kind, what would have happened if Everton had spent £19.5m less, the legally correct approach would have been to assess the probability and award a proportionate percentage of the claimed loss. Instead the Commission split the analysis: it treated causation as a binary on/off question resolved by the 51.47% figure, then awarded the full assessed loss. 

That is not the law, and it is not fair.

There is a further and discrete causation error. 

The Commission accepted the Wilson/Daniels methodology of attributing the cumulative £19.5m overspend in its entirety to the 2021/22 season on the basis that ‘the benefit continues from season to season’ and ‘cannot be sensibly compartmentalised.’ 

This approach is factually tendentious. The PSR itself is a three-year rolling measure precisely because spending benefits accrue and deplete across multiple seasons. The correct counterfactual, as Mr Holt’s analysis demonstrated, was to test the marginal effect of the breach in each relevant season. When that is done, even under Allocation 3 (the most favourable to Burnley), the relegation probability is 31.13%,  a figure that by no measure satisfies the balance of probabilities.

The expert evidence: The Commission preferred the wrong methodology

The Commission rejected Mr Holt’s logit regression analysis and preferred the Wilson/Daniels three-stage model. It characterised Mr Holt as having ‘less compelling’ analysis and criticised him for not having ‘direct experience of footballing issues’. These characterisations require challenge.

First, the Commission’s criticism of Mr Holt’s football experience is an irrelevance that reveals the Commission’s reasoning on this issue. The question is not whether Mr Holt has played or worked in football, it is whether his economic and statistical modelling of the relationship between expenditure and points is sound. Logit regression is a widely used and peer-reviewed statistical method for modelling binary or ordinal outcomes, directly suited to match-result data. The Commission’s preference for a methodology used by ‘gambling industry ratings’ over a methodology rooted in econometric modelling is not a finding that the Commission was equipped to make without explicit statistical guidance. Importantly none was provided.

“Despite the superficial sophistication of Mr Holt’s model for assessing the correlation between player-related expenditure and points gained, it emerged that his counterfactual league table, before adjustment for Everton’s overspend, was simply a ranking of the 20 Premier League clubs in order of expenditure on wages and amortisation.”  Commission decision, para. 164

This criticism demonstrates, with respect, that the Commission misunderstood Mr Holt’s model. 

A ranking by expenditure is the baseline from which the model assessed the counterfactual impact of Everton’s overspend. It is the foundation of the regression, not a flaw in it. That the Commission misread this as a criticism rather than a feature speaks to the limits of a tribunal without dedicated statistical expertise adjudicating on sophisticated econometric evidence.

Second, and this point requires emphasis, the Wilson/Daniels Scenario 1 (the 12-year dataset) produced results that the Commission itself acknowledged to be ‘improbable’. Applied mechanically, the 0.37 points per £1m figure from 2012/13 to 2023/24 would have Everton achieving 85 to 98 points in the seasons of the PSR breach, well above their actual totals. 

This is not an inconvenient outlier. It is direct evidence that the dataset and the methodology are unsuitable for the specific calculation Burnley required them to perform.

The Commission’s answer was to note that the inflation-adjusted version of Scenario 1, run through the Stage 3 simulation, ‘continued to show a greater probability of Everton rather than Burnley being relegated.’ That is precisely the problem: in every scenario, the margin was thin, the uncertainty was large, and the Commission never asked the essential question of whether a model producing outputs that the parties agreed were ‘improbable’ should be trusted to determine any question of legal liability to the tune of £26 million.

The Commission preferred a methodology it partially misunderstood, applied to a dataset its own proponents acknowledged produced improbable results, to establish a causation finding by a margin of less than 4 percentage points. No appellate tribunal should permit that to stand.

Date of breach: Temporal argument was wrongly decided

Everton’s argument on the date of breach, that Burnley’s relegation had already occurred before the PSR breach crystallised at the end of Everton’s financial year on 30 June 2022,  was correct in principle and should have been upheld.

The Commission rejected this argument by analogy with the Rule X Leicester City arbitration, which held that a breach ‘may take place during the currency of the playing season before the Annual Accounts can be completed.’ I do not quarrel with the Leicester City analysis in its own context, that case was about whether the Premier League could prosecute a club after relegation, a different question entirely. 

The Commission’s error was to treat that reasoning as determinative of a causation question in inter-club litigation.

The causation question is this: can a breach that had not crystallised, been assessed, or been found to exist as at 22 May 2022 have ’caused’ a relegation that occurred on that same date? 

The Commission’s answer, that the breach ‘was present for many months before Burnley’s relegation’, conflates the underlying spending with the breach. 

A club exceeds its PSR limit when its three-year rolling calculation reveals an excess above £105m. That calculation requires the completion of annual accounts. Prior to completion, there is no breach; there is only a risk of breach, which is a fundamentally different thing.

“No damages can be given on account of any loss before the cause of action arose. This is so clear that it is hardly controverted.”   McGregor on Damages (35th edition), paragraph 12-015, cited with approval by the Commission itself

The Commission cited this passage and then refused to apply it, on the basis that the Rules should be read purposively. But purposive construction is not a licence to rewrite clear contractual provisions. The Rules provided a specific mechanism: accounts are submitted, the PSR calculation is performed, a breach is determined. 

That sequence has not only a procedural but a substantive significance, it is the breach that is the cause of action, not the antecedent spending that led to it. The Commission’s refusal to apply the plain temporal logic of McGregor on Damages, when it had already accepted that principle as the governing standard, is a manifest error of law.

The counterfactual: A profoundly unrealistic construction

The Commission adopted as the ‘only realistic counterfactual’ an assumption that Everton would have secured £19.5 million in additional profit from player sales at an earlier stage of 2021/22. It rejected both of Everton’s proposed counterfactuals, selling a player at an undervalue or refraining from buying underperforming players.

This finding was reached in circumstances that call for appellate scrutiny. 

The Commission found that Everton would not have sold the player in question at the combined offer price because Mr Moshiri’s evidence was that he considered that offer to be a material undervalue,  and that this view was supported by the subsequent sale price achieved. It then concluded that because the realistic counterfactual was an additional £19.5m in player trading profit, and because Everton did not achieve this, the breach occurred.

But this reasoning has a serious logical flaw. The Commission effectively said: Everton would not have accepted the available offers for its best players, therefore the breach was inevitable, therefore it was a ‘real’ breach with causal consequences. 

This ignores the established principle from Durham Tees Valley Airport Ltd v Bmibaby Ltd [2010] EWCA Civ 485 that the court must ‘assume that the defendant would have performed [the contract] in his own interests having regard to the relevant factors prevailing at the time.’

If Everton would not have sold the player at undervalue, and the Commission accepted this, then the counterfactual it was required to construct was not the one it adopted. 

A party cannot be required to have done something commercially irrational that it would demonstrably not have done. The Commission’s ‘only realistic counterfactual’ was not one that Everton would have executed in the real world. It was a theoretical construct built to support a causation finding rather than to illuminate what would actually have occurred.

This point is reinforced by Recovery Partners v Rukhadze [2025] 2 WLR 529 at paragraph 163, which the Commission itself cited: the court must ‘construct a hypothetical scenario in which the defendant’s conduct is changed to the minimum extent necessary to achieve compliance with the duty.’ 

On the Commission’s own findings, compliance required either (a) a sale that Everton demonstrably would not have made or (b) refraining from purchases of players who, even if underperforming, were making regular matchday appearances and contributing to squad depth. Neither of these counterfactuals, applied properly, produces the causation finding the Commission reached.

Quantum: The award of £26 million defies commercial reality

Even if causation were correctly established, which is denied, the quantum award is unsustainable. The Commission awarded £26 million on the basis that Burnley suffered a net loss of that amount across the four-year period from FY22 to FY25. This requires urgent appellate examination for three distinct reasons.

The Commission accepted a measure of loss that is not recoverable in law

Mr Boulton’s methodology treated net player trading as a cash outflow, purchasing players was a loss, selling them was a gain, with no capitalisation of player assets. 

This departs from generally accepted accounting principles under IAS 38 and UK GAAP (FRS 102), under which player registrations are capitalised as intangible assets and amortised. 

The Commission accepted this methodology because Mr Dudney also adopted it. But expert agreement on a methodology does not validate that methodology as a correct measure of legal loss. 

If the method adopted produces a figure that does not represent Burnley’s recoverable damages in law, that is, the losses caused by Burnley’s relegation as compared to what would have happened in the counterfactual, then the award is wrong regardless of both parties’ experts having accepted it.

Burnley FC made a player trading profit

The most striking fact in the entire quantum analysis, one that the Commission was required to confront far more directly than it did, is that Burnley, across the relevant period, generated very substantial player trading profits. 

Its actual cash inflow from player trading over FY22 to FY25 was £83.5 million net. Mr Dudney’s analysis demonstrated that Burnley had been an extraordinarily successful seller of players precisely because it was relegated: ‘had the club enjoyed less success in its player trading, and subject obviously to any impact on its but-for assumptions of a different pattern of player trading in the actual scenario, Burnley’s actual player trading cash outflows would have been far higher without these profits.’

Burnley went into the Championship, sold its best players at record prices, and generated £83.5 million in player trading receipts. The Commission then awarded it £26 million in compensation for the harm done by that relegation. This result is not merely anomalous, it is commercially absurd.

Mr Dudney’s evidence was substantially vindicated

Mr Dudney, Everton’s quantum expert, calculated that Burnley had made a net gain of £18.2 million as a direct consequence of its relegation. The Commission found this ‘primary case’ figure to be too generous to Burnley, but in doing so accepted many of Mr Dudney’s individual arguments. 

The Commission accepted Mr Dudney’s positions on numerous specific issues including squad betterment and loan fee treatment. It produced a ‘compromise’ total of £26 million that tracked much closer to Burnley’s claimed loss than the commercial evidence justified. 

An award within the £0–10 million range, which independent analysts including my article of 17 September 2025 had anticipated as the likely outcome range, would have been far more defensible on the evidence.

The £69.9 million gap between the two experts’ primary cases (Boulton £51.7m loss; Dudney £18.2m gain) is the largest variance in any English football financial-damages case. 

A Commission confronted with that range of uncertainty should have proceeded with exceptional caution. Instead it made a specific £26 million finding as if that precision were justified by the evidence. It was not.

Systemic injustice: Double jeopardy and the novel liability framework

This ground addresses the systemic injustice of the decision, which requires an Appeal Board to grapple with a question that has consequences far beyond these two parties.

Everton has already been penalised for the PSR breach. It received the largest points deduction in Premier League history and, after appeal, a six-point sanction that caused it genuine sporting and reputational damage. 

It also bore the substantial legal costs of two separate proceedings. To now face an additional award of £26 million in civil compensation, arising from the same admitted breach, assessed by the same Commission, is a form of double jeopardy that the Rules were not designed to create and that no reasonable reading of Rule W.51.5 compels.

“A points deduction is not designed to assess and reflect the sporting benefit from the breach, which is likely to be impossible to quantify. Instead, it is to punish and to deter with the wider aim of upholding the integrity of the competition.”  — Sheffield Wednesday FC v The Football League Ltd [SR/196/2020], Lord Dyson, para. 103 — cited in this decision

The Commission’s own citation of Lord Dyson’s observation in Sheffield Wednesday is instructive, and reveals the incoherence at the heart of the liability framework it has created.

It accepted, correctly, that the points deduction was not a quantification of sporting advantage. Having accepted that, it then permitted Burnley to claim that the sporting advantage was the direct cause of its relegation. 

But the entire PSR enforcement architecture acknowledged that quantifying the sporting advantage of a financial breach is impossible. The Commission cannot simultaneously hold (as the Sheffield Wednesday reasoning requires) that a points deduction does not reflect the sporting advantage and then permit a £26 million civil claim on the basis of precisely that advantage.

The wider consequences of this decision are significant and as stated in my previous article: ‘A successful claim by Burnley would set a precedent, effectively transforming regulatory penalties from a matter of internal sporting governance into a civil liability between rival clubs.’ 

Leeds United, Southampton, Leicester City, all clubs relegated in periods when PSR proceedings were ongoing, have dormant potential claims. The Manchester City Rule 1.6 proceedings involve 115 charges spanning many seasons. If this decision stands, the floodgates open for civil inter-club litigation of precisely this kind. 

An Appeal Board must ask whether that was the intended consequence of Rule W.51.5, and the answer, plainly, is that it was not.

The going concern issue and enforcement risk

A further matter which falls to be considered in the context of the appeal is the Commission’s refusal to grant a stay of enforcement pending appeal. This decision was reached notwithstanding Everton’s properly founded concerns about Burnley’s ability to repay if the appeal succeeds.

The Commission acknowledged that Burnley’s accounts to 31 July 2025 showed net current liabilities of £62 million with £142 million of financial debt, and that the auditor’s report disclosed a material uncertainty relating to the club’s going concern status. 

Its reliance on the Football Creditors Rule as providing eventual protection is not the same as saying that prompt repayment would be achievable. The Commission itself accepted that repayment under the Football Creditors Rule would come ‘by instalments only as elements of Central Funds became due.’ 

This means that if Everton succeeds on appeal, the practical process of recovering a sum that will have been paid out and spent by Burnley in the ordinary course of business may take years and be heavily contested.

Everton’s alternative proposal, that funds be paid into an escrow account, was entirely reasonable and should have been accepted. The Commission’s refusal to do so, on the basis that Burnley would ‘likely’ be able to make repayments, is the kind of judicial optimism that an Appeal Board should correct. 

The risk of irrecoverable harm is real. The remedy, escrow, was proportionate, readily available and at no cost to Burnley. The application should be renewed before the Appeal Board.

Summary: Grounds for Appeal

Concluding submissions

This decision does not reflect the balance of evidence. It reflects a Commission that found itself confronted with a genuinely novel legal question, can one Premier League club sue another for the financial consequences of a PSR breach?, and that resolved it by following the path of least analytical resistance.

• It accepted probabilistic modelling by a margin that barely clears 50%. 
• It awarded a loss to a club that made £83.5 million in player trading receipts in the same period. 
• It rejected the temporal argument that the breach post-dated the relegation on purposive grounds, while simultaneously applying orthodox contractual principles to limit the scope of the claim in other respects. 
• It has created a legal framework that, if affirmed, will generate a wave of inter-club litigation that the Premier League’s governance structure is wholly unsuited to manage.

Everton’s position is not that it was blameless, it admitted the PSR breach and accepted the points deduction. Its position is that it has already been punished, and that the additional imposition of a £26 million civil award on the basis of a coin-flip probability and a quantum analysis that its own author described as uncertain beyond a four-year horizon, is simply wrong in law and fact.

An Appeal Board has broad powers: it may remit the award in whole or in part, set it aside, or substitute its own findings on any or all of the grounds identified above. I invite it to do so. The result of this decision, compensation for losses arising from a relegation that, on the most favourable expert evidence, was 51.47% likely to have been avoided, is not the result that English football’s Rule W compensation regime was designed to produce. It is not the result that justice requires. And it should not be the result that stands.

Article prepared 11 June 2026| Sources: PLJP 2023/3 Commission Decision (290pp), Consequential Matters Decision (2 June 2026), theesk.org/Paul Quinn (17 September 2025), Allied Maples Group v Simmons [1995], Durham Tees Valley Airport v Bmibaby [2010], Recovery Partners v Rukhadze [2025], Sheffield Wednesday v Football League [2020], McGregor on Damages (35th ed.)