The Premier League is recommending this record-breaking punishment as it believes Everton violated financial regulations. If the club is found guilty, they could face a 12-point deduction, which would leave them with negative points and at the bottom of the Premier League table. This would be the largest points deduction in Premier League history.
The club's financial situation is currently being reviewed by an independent commission, which will make the final decision. Everton has reported significant financial losses, which they attribute in part to exemptions related to the COVID-19 pandemic. They argue that they have complied with the rules and plan to "robustly defend" their position.
In addition to a points deduction, other potential penalties include fines, a transfer embargo, or a less severe points deduction. The Premier League is reportedly pushing for a harsh punishment, while Everton is in the midst of a takeover by American company 777 Partners.
The Premier League had announced Everton's alleged breaches in March and stated that the proceedings would be confidential and heard in private, with the final award to be published on the Premier League's website at a later date.