Reading have been plunged into the thick of the relegation battle after being handed a six-point deduction in the Championship for failing to comply with the EFL over its profitability and sustainability rules.
The Royals, currently managed by Paul Ince, have dropped from 18th to 20th in the table and are now on 40 points, just one above the relegation zone with seven matches of the season remaining.
Reading were initially sanctioned by the EFL in 2021 after being found to have breached the rules. They were given a six-point deduction then with an additional six-point suspended penalty for this season, which has now been enforced.
An EFL statement read: “Reading Football Club will be deducted six points from the 2022-23 Championship table, after the club admitted that it has failed to comply with the budget restrictions imposed, following a previous breach of the EFL’s profitability and sustainability rules.
“The points deduction is an activation of a suspended six-point penalty, which was set out in the terms of an agreed decision between Reading and the EFL in November 2021.
“The EFL has been notified and will apply the sanction with immediate effect.”
What have Reading said in response?
A Reading statement said: “Despite radical changes implemented at first team level and right across the structure of the business to its very core – and a rigid adherence to a strict league-monitored wage structure and transfer embargo, the club accepts that it has not sufficiently satisfied certain elements of the planned budget and that, as a result, the independent club financial review panel has been unable to ratify that the club has met its forecast for compliance.
“We have worked closely with the EFL and the independent club financial review unit throughout the process in our aims to achieve the targets set out in the agreed business plan and every reasonable effort has been made to construct a competitive squad of players whilst avoiding further punishment.
“However, despite the substantial progress we have undeniably made and the lessons that have indeed been learned, as promised, we accept that the situation was never going to be easily or quickly fixed.”
Why has this happened?
Reading failed to abide by the terms of a business plan agreed after the breach of the profit and sustainability limits in 2021.
The EFL confirmed that “the points deduction is an activation of a suspended six-point penalty, which was set out in the terms of an agreed decision between Reading and the EFL in November 2021”.
Between 2017 and 2021 Reading announced losses of £57.8m and the club was given a six-point deduction for exceeding the limit for that period which was £39m. Now a further six points have been enforced.
What does it mean for the Championship relegation battle?
Reading are now anxiously looking over their shoulder with Cardiff City and Huddersfield Town, who are in the relegation zone, just one point behind.
Blackpool in 23rd and Wigan in 24th are five and six points behind Reading respectively.
The Royals face some tricky games in the final weeks of the campaign, playing against top-of-the-table Burnley and promotion-chasing Luton Town and Coventry City, as well as Wigan and Huddersfield in their final two fixtures.
Reading’s recent form is a concern too. They have gone six games without a win, losing four including a heavy 5-0 defeat against Middlesbrough last month.
“We find ourselves with another huge fight on our hands,” Reading’s statement read.
“We will need our fans’ support once more. We know you, our loyal supporters, will rise to the challenge again and give this group of players the impetus they need to scrap and battle until the final whistle at Huddersfield on Monday 8 May.”
What happens next?
The club will need to agree a budget with the club financial reporting unit for the 2023-24 season to ensure that Reading complies with financial regulations.
However, their profit and sustainability review for this season will need to be completed before a new budget is set.