Reading Football Club have been hit with a six-point deduction by the English Football League (EFL) for breaching the terms of an agreed business plan. This marks the first decision handed down by the independent Club Financial Reporting Unit (CFRU). As a result, Reading are now 20th in the Championship with 40 points, one above the relegation zone.
Manager Paul Ince had predicted this punishment last week. In addition, Reading have agreed to a new budget with the CFRU, which will be finalized once the club’s full profit and sustainability review has been completed for the current season. The club accepted that they had not “sufficiently satisfied” elements of the planned budget.
Despite making radical changes to their first team and across the business structure, as well as adhering to a strict league-monitored wage structure and a transfer embargo, Reading were still unable to meet the forecast for compliance. The transfer embargo, which has been in place since 2021, will end this summer.
In 2021, Reading were given a six-point deduction for losing £57.8m between 2017 and 2021 – the EFL’s limit for that period was £39m. A further deduction was suspended until the end of this season, on the basis of targets in the EFL’s business plan being hit. The club said they had made “every reasonable effort” to build a squad without falling to further punishment.
Despite making substantial progress, Reading accepted that the situation was not going to be easily fixed. John Potterill-Tilney, Director of the CFRU, thanked the club for their transparency and cooperation during this process. He also praised the Club Financial Review Panel for helping to deliver an agreed sanction in just over one month since submissions were provided.
This decision and sanction will now give the club clarity to plan for the period ahead, both on and off the pitch. The EFL’s regulations establish the CFRP as an independent panel with the responsibility of reviewing the financial performance of EFL clubs.