Analysis: Where now for Reading's future amid reports of a bid for the club?
- Published
Reading's 2-1 loss at Leyton Orient was their seventh in 11 League One games this season
Reading fans fretting about the possibility of the club slipping into administration will have raised eyebrows when reports emerged, external that Rich Energy founder William Storey could buy the club from Chinese owner Dai Yongge.
Yongge's steadfast refusal to communicate with anyone, including his own staff at Reading, his failure to pay bills at the end of each month, and his disregard for the EFL's profitability and sustainability rules during his six-year tenure has run Reading to the brink.
Sources at the top of the club tell me Storey's bid will fail.
The Royals have clarified, external that there is "currently no agreement in place with any party", and that "no single individual or entity has exclusivity in this process".
They added: "Several parties have approached the club in recent weeks with declarations of interest in purchasing the club. All approaches are being assessed on their own merits to find the most suitable buyer to ensure a healthy future of the club."
The first issue for Storey and anyone else trying to buy Reading (and I am told there are several more attractive interested parties from the US), is reaching an agreement over the true value of the club with Yongge.
He has pumped in hundreds of millions of pounds, so will surely be wanting to minimise his losses. No right thinking business operator will want to pay even tens of millions, let alone hundreds of millions, for the privilege of owning a club drowning in debt.
William Storey has shown interest in Sunderland and Coventry, while he had a short-lived sponsorship deal with the Haas Formula One team in 2019
The other issue is the EFL's owners' and directors' test. Storey has already seen bids for Sunderland and Coventry flounder. His sponsorship of F1 team Haas was short-lived.
A "corporate restructuring process" at Rich Energy was blamed for the early termination, external of that contract - if Yongge is planning to sell to Storey, for a reported £50m, fans may be forgiven for thinking it is a case of out the frying pan and into the fire.
It will be a significant moment for the EFL's scrutiny of potential new club owners - they allowed Yongge to take over the Royals six years ago after the Premier League had thwarted his attempts to buy Hull City.
Storey was invited to the training ground by Yongge a few months ago, and pictures on social media, originally published by the British businessman, show this visit definitely took place. Storey has since posted comments on social media about Reading FC. He has made no secret of his interest.
But could administrators being placed in charge of club affairs, and a 12-point deduction probably leading to League Two football, be preferable for staff and fans of the club?
Understandably, going into administration is much feared by fans at all clubs, but at least it would mark the lowest point in the downward spiral.
Accountants controlling things, rather than Yongge, would at least calm the situation.
Based on what happened at clubs like Derby, Portsmouth, Southampton and Huddersfield over the last 15 years, it may be the start of happier times.
Reading fans threw tennis balls onto the pitch to delay last month's League One home games with Bolton and Burton
Accountants would have a better grasp of the club's true value, and could strip out the excess spending. Administration immediately reduces the scale of some of the debts, making it a more attractive proposition to potential buyers.
Throughout this sorry saga at Reading, the not knowing has been a big part of the unrest. Fans have been thrashing around in the dark, searching for answers that have never come.
Ruben Selles, the manager, is left to field questions on the business and finances, rather than tactical formations and player fitness. Whoever comes in, be it administrators or a new owner, they must communicate better, play by the rules, pay the bills and bring financial stability.