Reading FC lost £146m in five years under its owner, then faced a winding-up petition

In July 2023 BBC South Today looked at how Reading FC went from a May 2017 Championship play-off semi-final to League One. The day after that win, Chinese businessman Dai Yongge and his sister Dai Xiu Li were confirmed as buyers of a 75% stake, making them the club's fourth group of owners in five years. Six years later Reading had been relegated to the third tier for the first time in 21 years, had points deducted for breaching financial regulations and faced a winding-up petition over unpaid taxes. A supporters' group called "Sell Before We Dai" was calling for a change of ownership.

The BBC's review of the accounts found pre-tax losses of £146m over five years, against an EFL limit of £13m a year. At its peak in 2021 the club spent 234% of its revenue on player wages. Talented players left for low fees because of poor contract management and a lack of release clauses, and the pandemic made an unsustainable plan worse, leading to a transfer embargo of nearly two years. Former chairman Sir John Madejski said Dai had put well over £200m into the club and had "very bad advice" given the scant return.

At the end of June 2023 HMRC issued a winding-up petition over unpaid tax, shortly after the EFL charged the club with failing to pay players on three occasions during 2022-23. The BBC could not reach Dai. It found that trading in shares of his parent company, China Dili Group, had been suspended in Hong Kong since October 2022 while an independent investigator looked at its financial reporting, and that he and his sister had previously owned two other clubs, Beijing Renhe and KSV Roeselare, which both folded after relegation and financial trouble.

£146m of pre-tax losses in five years, a points deduction, relegation to League One and an HMRC winding-up petition.

Wages ran at 234% of revenue in 2021, far beyond what the club earned.

Players with value left cheaply because contracts lacked release clauses.

The club depended on one owner's cash injections, and by mid-2023 it was missing tax and player payments.

Owners repeatedly breached EFL financial rules, which brought sanctions and a transfer embargo.

A club financed by one owner's cash is only as solid as that owner's ability to keep sending it.

Reading started the 2023-24 League One season with a rebuilt squad on limited resources under new head coach Ruben Selles and director of football Mark Bowen. The owners declined to comment to the BBC. The supporters' group said Dai's stewardship had been an "unmitigated disaster" and wanted him to sell at the earliest opportunity. The BBC's piece does not report how the HMRC petition was resolved.