A feeling of disappointment and determination is coursing through Everton Football Club after it was hit with an unprecedented 10 point deduction for financial wrongdoing.

There was an overwhelming sense of injustice at Finch Farm and the club's Royal Liver Building HQ after the Premier League announced the harshest punishment it had overseen on Friday lunchtime. Manager Sean Dyche, away during the international break, was informed by director of football Kevin Thelwell.

The club anticipated a sanction - a penalty became unavoidable once it revised its position and, in October, accepted the single rule breach it was accused of after the technicalities of the case were spelt out during months of deliberations.

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But the severity of the independent commission’s ruling was met with dismay within a club that believed it had acted with transparency. In the hours after the club learnt its fate both Everton and its fanbase appeared galvanised in the face of adversity and prepared to stand up against its treatment in the chambers of power and the four stands of Goodison Park.

The case against Everton ultimately amounted to a dispute over £19.5m. Over the four year accounting period that ended in the summer of 2022 the club was permitted to lose up to £105m without prompting a referral to the commission by the Premier League. When Everton submitted its accounts it judged its losses for that timeframe at £87.1m. The Premier League disagreed and eventually argued the appropriate figure was one of £124.5m. By the time the commission heard arguments in the case last month, Everton accepted it had crossed the boundary but asserted it had done so by just £7.9m. The commission found in favour of the Premier League.

Two key areas of dispute were identified in the judgement. The first centred on whether interest from loans obtained from Metro Bank and Rights and Media Funding could be excluded from the profit and sustainability calculations. Everton believed it could because it said the borrowing was for use towards the development of the new stadium. The Premier League countered this was not the case and that initial stadium funding came from interest-free lending from majority shareholder Farhad Moshiri. The commission ruled in favour of the Premier League, finding those commercial loans were instead “advanced for the limited purposes of working capital”.

The second main area of argument was on whether Everton could exclude fees arising from the Transfer Levy - a charge of 4% of the value of any transfer payments made by a club which is passed onto the Premier League and which funds the Professional Footballers’ Pension Scheme, with any surplus then going towards a youth development initiative. Again, the commission ruled in favour of the Premier League.

While the argument in this case focused on technical interpretations of specific issues, it was clear the Premier League had set its case against the backdrop of spending that began when Moshiri took a stake in Everton. Everton’s counter argument was that a perfect storm of unpredictable setbacks had hit the club and that as soon as problems began to emerge it sought to work with the Premier League to stick within the rules. It argued to the commission: “The club's alleged overspend arose, in short, from a combination of unforeseen circumstances, which frustrated prudent plans to reduce its losses.”

For the Premier League, Moshiri appears to be seen as a billionaire who staked Everton’s sustainability on reaching Europe and building from there. The commission wrote in its judgement: “Mr Moshiri came to Everton with great aspirations. He wanted to transform the club into one of the top teams in the Premier League, regularly playing in Europe. And he wished to provide the club with a new, state of the art, stadium. No other Premier League club had carried out two such projects at the same time.”

Moshiri is said to have wanted to finance the team into European football and then take advantage of the additional income that would generate to sustain a competitive Everton alongside the stadium project. When the team underperformed on the pitch, those plans suffered. One stark example cited by the report is the 16th-placed finish in the 2021/22 season. The club had projected a sixth-placed finish but instead ended up in a relegation battle that it only narrowly won under then manager Frank Lampard. The disparity between the ambition of a top six finish and the reality cost the club £21m in expected income.

Everton, meanwhile, asserted its issues with adhering to financial regulations largely came down to unforeseen developments beyond its control. These included the Covid-19 pandemic, which it said hurt the club’s ability to sell players at market value, and the Russian invasion of Ukraine that led to the suspension of sponsorship arrangements with USM. The USM-associated businessman Alisher Usmanov was sanctioned by the European Union in the wake of the invasion. The judgement states that when the invasion took place Everton claims it was a club on the cusp of signing a 20-year, £10m-a-year stadium naming rights deal with the company. The commission disagreed that the impact of invasion of Ukraine could be deemed a mitigating factor for Everton, ruling: “The loss of a proposed agreement, even when that agreement might have been thought likely, is the type of event that businesses experience. It is not something that can stand as diminishing Everton’s culpability.”

A further argument submitted by the club was that the public knowledge of the club’s difficult financial situation led to rivals driving a hard bargain for its players - claiming Richarlison was sold to Tottenham Hotspur in the summer of 2022, but within this financial period, for £60m when he was worth £80m. Everton argue the signing of the naming rights deal and the full realisation of Richarlison’s value are each just two of several instances where, in typical circumstances, they would have secured income that would have kept them within the spending limits.

The Premier League sought to offer no leniency, however, and neither did the commission, which ruled: “The cause of Everton’s profit and sustainability rule (PSR) difficulties was the fact that it overspent (largely on its purchase of new players and its inability to sell other players), and because it finished lower in the league than it had projected in financial year 2022. Everton’s understandable desire to improve its on-pitch performance (to replace the non-existent midfield, as Mr Moshiri put it in evidence) led it to take chances with its PSR position: those chances resulted in it exceeding the £105 million threshold by £19.5 million.”

Having accepted the club breached the spending limits, Everton’s dispute with the authorities is now over the nature and severity of its sanction. The 10 point deduction has come into immediate effect and Everton now sit joint bottom of the Premier League with four points having seen the good results of recent weeks wiped out by the penalty. An appeal has been launched and is expected to be heard - and ruled upon - before the end of this season. Senior figures do not just believe that the penalty is disproportionate, they also believe it is wrong for what is considered to be an accounting issue to be met with a sporting sanction. The commission, which set the punishment, referenced the wealth of Moshiri as a relevant factor in deeming a fine insufficient.

The club is also angered by allegations it did not act in “good faith” during work with the Premier League, particularly after January 2021 - when the level of concern led to the Premier League producing a report to its board on Everton’s expenditure. There is a belief - backed up by references in the report - that chunks of the case against the club were built upon documents it released as part of its engagement process. The commission’s report accepts that Everton’s breach of the regulations was not deliberate, and states that the Premier League has not accused the club of being dishonest.

The club issued a public response to the findings on Friday afternoon, highlighting its ‘shock and disappointment’. It said: “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.”

Its position over the severity of the punishment was echoed by supporters. Fan group The 1878s raised more than £9,000 to fund efforts to heighten the atmosphere at Goodison Park within hours of the judgement being announced. The All Together Now supporter campaign group released a statement in which it criticised the ruling as one that will hit fans the hardest when mistakes were the responsibility of club officials. It drew reference to the ambitions of six top flight clubs seeking to join a breakaway league and being handed fines of around £3m as evidence of disproportionality and added: "Evertonians are appalled by the double standards of the harshness of this penalty when compared to the small fine imposed on the six clubs who tried to destroy the integrity of English football by forming a Super League. We call upon all Evertonians and all football fans who want to see fairness and a well -run game to oppose this appalling decision. The poor and inequitable governance of football represents a great threat to the game’s integrity.”