Reading FC suffers immediate six-point deduction for breach of EFL's financial rules

Reading Football Club has suffered an immediate six-point deduction for a breach of the EFL's financial rules.

The Championship club have dropped from 46 points to 40, leaving them just one point above the relegation zone as a result of the penalty.

The sanction relates to the club's failure to meet the terms of a business plan agreed following a breach of the profit and sustainability limits in 2021.

The initial breach carried a six-point penalty with a further six points suspended until the current campaign.

A statement on the club's website reads: "Reading Football Club can confirm that we have accepted a second six-point penalty which has been applied following the club’s failure to fully satisfy a business plan agreed after a historical breach of the EFL’s Profit and Sustainability limits.

"The points deduction will be applied to our total with immediate effect.

"In November 2021, the club were issued with a six-point deduction for a cumulative breach of the regulations - with a further six-point penalty suspended until 2022-23.

"At the time of the original breach, it was agreed with the League this further six-point penalty was due to be applied if the club could not meet the demands of an agreed business plan for 2022-23. And, 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.

"Back in November, we vowed that lessons would be learned. And the strides which have been made have been significant; it is evident in our methods, procedures and actions over recent years - and most notably throughout this season - that the mistakes of the past have been understood, corrected and won’t be made again.

"In abiding by the EFL rules, the club have not spent a penny on transfer fees since the summer of 2020 and have not paid a loan fee to any club since the summer of 2019. Our squad has been entirely rebuilt from free transfers, free loanees and Academy graduates.

"Every single professional contract proposed has been scrutinised and ratified by the EFL before it has been offered and we have operated under a mutually-agreed capped wage bill imposed following our breach of the Profit and Sustainability regulations – our wage bill has been almost halved since the start of the 2019-20 season.

"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.

"The progress made has been recognised; it has been agreed with the EFL that the club’s restrictive embargo status will effectively end this summer and the club will, for the first time in years, be able to act sensibly in the transfer market - within a budget currently being reviewed by the Club Financial Review Unit and compliant with Profit & Sustainability boundaries, but free of the strictest limitations which have proven problematic in trying to piece together a team capable of challenging in the Championship and a squad tasked with taking this club towards a brighter more self-sustainable future.

"However, in the here and now, we find ourselves with another huge fight on our hands.

"The part you played in the run-in last season should not be underestimated. And 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.

"So for the next seven games, get behind us. We need your support!

"These continue to be challenging times for our club, your team. Thank you, as always, for your dedication to Reading Football Club and your magnificent support so far this season."