Everton have announced that they have withdrawn their appeal against a two-point deduction for breaching the Premier League's Profit and Sustainability Rules (PSR).

The Toffees initially lodged an appeal after they were hit with a two-point penalty by an independent commission for breaching PSR by £16.6m for the three-year period to 2022-23.

Everton were previously docked 10 points in February, which was reduced to six on appeal, after they were found guilty of overspending by £19.5m up to 2022.

The appeal for their second points deduction was due to take place next week and the verdict was scheduled to be announced before their final Premier League fixture of the season away against Arsenal on 19 May.

However, it is understood that club lawyers have made the decision not to proceed with their appeal having reviewed the reasons for the recent rejection of Nottingham Forest's attempt to overturn a four-point penalty.

A statement from Everton read: "Everton Football Club has withdrawn its appeal of the decision by a Premier League Independent Commission to impose a two-point deduction on the club for a breach of the Premier League's Profitability and Sustainability Rules for the accounting period ending in June 2023.

"A hearing, scheduled for later this month, will now not proceed, and the club will conclude the 2023-24 Premier League season with the two-point deduction remaining in place."

What does the future hold for Everton?

Everton's decision to accept their punishment and withdraw their appeal comes just a few weeks after Premier League survival was confirmed following a strong run of form under the tutelage of Sean Dyche.

The Toffees collected 13 points from six matches in April, with Dyche subsequently winning the Premier League Manager of the Month award, and his side now sit 11 points clear of the relegation zone with two games to spare.

Everton can somewhat relax for the remainder of this season, but another hearing and a possible third points deduction is on the horizon after the last commission was unable to rule on a dispute between the Toffees and the Premier League over stadium interest payments.

It has been alleged by the Premier League that Everton were not entitled to capitalise £23.46m in stadium interest payments in their accounts, something the Toffees have profoundly rejected.

This issue is expected to be resolved at some stage before the start of the 2024-25 campaign, so Everton face the prospect of beginning the new Premier League season with minus points.

Amidst all this uncertainty, frustrations over the club's ownership status remain, with current owner Farhad Moshiri allegedly considering the termination on his agreement with 777 Partners to purchase the Toffees amid doubts over the firm's financial capabilities.