Everton have received an immediate 10-point deduction after being found to have breached the Premier League's profit and sustainability rules. The point deduction, which was meted out by an independent commission will be effected immediately. The punishment is the biggest sporting sanction in the competition's history will push Everton further down to 19th place in the table, placing them on a new total of four points.
The club has said that it will appeal the decision after noting that it was "both shocked and disappointed" by the "wholly disproportionate and unjust" ruling.
Everton posted financial losses for the fifth successive year in March after reporting a £44.7m deficit in 2021-22.
Premier League clubs are permitted to lose £105m over a three-year period and Everton admitted to being in breach of the profit and sustainability rules (PSR) for the period ending 2021-22.
Following a five-day hearing in October, the commission found in favor of the Premier League that Everton's losses during that period amounted to £124.5m.
In a statement, Everton said: "The club does not recognize the finding that it failed to act with the utmost good faith and it does not understand this to have been an allegation made by the Premier League during the course of proceedings.
"Both the harshness and severity of the sanction imposed by the commission are neither a fair nor a reasonable reflection of the evidence submitted.
"The club will also monitor with great interest the decisions made in any other cases concerning the Premier League's profit and sustainability rules."
The Toffees have now become the third premier league club that had suffered point deductions after, Middlesbrough was deducted three points for failing to fulfill a fixture against Blackburn during the 1996-97 season, and in 2010 Portsmouth was deducted nine points after going into administration.
Neither club was able to avoid relegation following those sanctions.
The deduction leaves the Toffees level with bottom club Burnley on four points after 12 matches - and two points adrift of safety.
Treble winners City were charged in February before Everton and that case is still ongoing.
Chelsea is also in the mix and could face further scrutiny from football authorities over reports of payments connected to the club's former owner Roman Abramovich.