Reading FC Fans Have Had ENOUGH

Just outside of London, in Berkshire, lies Reading, a city with history as far back as at least 871 AD. And from Reading comes Reading FC, one of the oldest clubs in England. Founded in 1871, Reading FC has been active for 152 years and has played in the top tier of the English pyramid twice, both in the 21st century. 

This weekend the fans stormed the pitch after seeing the club getting another round of points deductions for financial issues placing them 21st in League One in the automatic relegation spots. But the club might not make it to the end of the season. What’s happened at Reading?

In 2014, after dropping out of the Premier League, ownership of the club changed hands twice in three years. It’s costly to make a push for the Premier League and after being relegated, the club got into financial trouble. Then-owner Anton Zingarevich was unable to keep up with the investment needed and sold to a Thai consortium who in turn, sold to the Chinese Dai family.

Dai Yongge Takes Over

Enter Dai Yongge, a Chinese businessman and, if his words are to be believed, football enthusiast. Dai made his fortune in commercial real estate in China and because of this alleged football interest, he decided to start a team there. Which absolutely bombed. They moved the club to Beijing but had to shut it down just a year later.

Then they moved on to Europe after Xi Jinping announced his plan to make China a footballing super power. In 2016, the Dai’s first potential victim was Hull City where they came as close as putting down a deposit on the club before failing Premier League’s ownership test because it was unclear where the funds came from.

However, they did manage to close a deal for a football club in 2016 when they bought the Belgian club KSV Roeselare. After running it for three years, having utterly failed sporting wise as the club sat second from last in the Pro League, they also failed financially. In 2019 the Belgian club was declared bankrupt.

When the family found another opportunity to purchase an English club in 2017 they had better luck. Despite the Premier League declaring them unfit to own a club and sending their findings to the EFL, the body governing League 1 football, they were allowed to purchase the club.

Disaster Management

It’s hard to accurately express how much of a disaster the Dai’s ownership of the club has been, at least for the last four years. Just before they took over, the club had finished third and just lost out on promotion to the Premier League. After that, well see for yourselves.

But sporting performance isn’t the worst part. The financial mismanagement that now threatens to bankrupt the 157 year old club is. In the past three years, the historic club, under Dai’s stewardship has failed financial regulations with the EFL, they’ve missed salary payments to players and staff, accrued both personal fines and fines on the club, been put under transfer embargo for failing to pay taxes and have gotten not one or two but three points deductions totalling 16 points.

Reading fans are rightfully upset. And this weekend they took matters into their own hands by storming the field while their team was playing Port Vale, ultimately causing the game to be suspended.

There’s a saying: “Never attribute to malice that which is adequately explained by stupidity.” So, are they stupid?

When it comes to football - possibly - but when it comes to business - probably not. They’ve built one of the biggest real estate companies in China and are one of the wealthiest families in the world. So why has it gone so wrong at Reading? Malice?

One theory is that this was the plan all along. When they bought the club in 2017, they moved the ownership of the stadium out of the club and into another company they own. Since then, they’ve racked up debt in the club and if it were to go bankrupt, well, the debt would be wiped out but what would the Dais have left? That’s right, the other company that owns the stadium and, more importantly, the land it sits on.

Don’t forget, the Dai family’s fortune comes from real estate. With this manoeuvre they’d lose minimally on the club and gain prime development land.

Going Forward

The good news is that the Supporter Trust At Reading (STAR) managed to get the stadium protected from just this scenario in October by successfully petitioning the local government to make the stadium a so-called “Asset of Community Value”, or ACV. While the ACV can be turned over, if it can be argued that the need for housing is greater than the community value of the ground, it does put another lengthy process in the way of that project.

In November, Dai Yongge announced that plans to sell the club were in motion but so far those plans have yielded nothing. In a meeting with the EFL in December, STAR were told that no exclusivity deals (the first part of a deal where one potential purchaser gets exclusive rights to negotiate) had been struck and that they too were concerned about the ownership status of the club.

Both STAR and the organisation “Sell Before We Dai” have called upon the EFL to expel the Dai family as owners of the club. This is an acute situation but long term, how will the EFL prevent this from happening to another club? There were clear red flags when this purchase was made, the failed Premier League fit and proper test as well as the Chinese club the owners previously dissolved.

What’s sad is also that the Dai’s mismanagement of the club isn’t harming them, it’s harming the club, staff, players and the fans. The transfer embargoes and the points deductions only serve to make things worse for them, rather than the Dai’s who are cushy in a £42m house next to Buckingham Palace.

The Dai’s have ruined two clubs already and are well on their way to ruining a third.

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