Are new sponsorships enough to solve Everton’s PSR problems?

by   |   15/02/2024  0 Comments  [Jump to last]

Everton’s well-documented issues with the Premier League’s Profit and Sustainability Rules (PSR) have undoubtedly cast a shadow over what could have been a promising season.

A 10-point deduction plunged the Toffees into the heart of the relegation battle – without the punishment they would be in the calmer waters of mid-table.

The club has appealed the decision and some experts have predicted they may end up being partially successful by having the sanction reduced.

While this would be welcome, question marks over the ownership situation and potential issues surrounding sponsorships leave the club facing an uncertain future.

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The proposed takeover by Miami-based 777 Partners is still awaiting approval from the Premier League, despite the group funding the club’s working capital.

Another possible headache is the league’s decision to ban shirt sponsorship deals with betting brands from the end of the 2025/26 season.

As one of several Premier League teams with betting sponsors, Everton could be left with a sizeable financial hole to fill when the law comes into force.

Premier League rules allow clubs to lose a maximum of £105 million over three years. Losing a deal worth £10m per annum would impact Everton’s hopes of complying.

The £105m figure has several conditions attached including one which states that £90m must be covered by ‘secure funding’ from a club’s owners.

This effectively means a club can only lose £5m of its ‘own’ money each year and highlights why losing major sponsorships could be catastrophic.

There have been suggestions that changes could be made to the rules, with Premier League clubs recently debating how PSR will operate in the future.

Ensuring these are compliant with FIFA and UEFA regulations is a sticking point, and will likely hinder the chances of any new rules coming into force in the short term.

On that basis, ratification of the new owners by the Premier League and a structured plan to fill the sponsorship gap created by the betting ban are crucial to Everton’s future.

Sponsorship deals between betting brands and Premier League clubs have dominated the landscape in recent years and have undoubtedly benefitted both sides of the equation.

Betting firms have used the link-ups to promote themselves to a captive audience, while clubs have been paid handsomely for advertising those companies

The voluntary ban of front of shirt advertising was made after negotiations by the Premier League, its clubs and the United Kingdom government.

An ongoing gambling legislation review cranked up the pressure on the league to take action, with critics arguing that it had become too reliant on betting industry income.

The move bears plenty of similarities to a previous ban on sponsorships from the tobacco industry, which left clubs pondering how they would fill the financial gap.

However, their fears proved to be unfounded, with companies from other business sectors quickly stepping into the breach by forging strong links with professional football.

Given the global nature of the Premier League, it is highly unlikely that any of its clubs will struggle to find new shirt sponsors when the ban comes into force.

Betting advertising has not been completely banned in the English top flight – a factor which will allow clubs to retain at least some of the income they currently generate from the sector.

A quick look at some of the non-betting sponsors on the shirts of other Premier League clubs highlights that big brands are eager to be associated with the competition.

For example, Manchester United agreed a deal with technology Qualcomm in 2023 that will see its Snapdragon brand replace the TeamViewer logo as their shirt sponsor from next season.

Numerous other major global brands could be willing to fill the void left by the betting ban, which should give Everton confidence they can secure a lucrative deal.

This factor alone will not be enough to solve Everton’s problems with PSR, with the ownership situation unquestionably another issue which must be resolved.

In the medium to long term, the Premier League must devise a set of rules which do not kill ambition and allow for true competition to flourish.

A key flaw in the current PSR limits is they have not risen line with football inflation since 2013. Had they done so, Everton would not have breached the rules.

In essence, the current rules maintain the pecking order in the Premier League by preventing ambitious clubs from knocking the big-hitters off their perch.

The idea that a club must sell its best players to comply with PSR – as Everton were forced to do with Richarlison – is a ridiculous notion.

New sponsorships alone will not solve Everton’s PSR problems. The flawed rules must be changed to ensure the league regains some semblance of being a fair and balanced competition.


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