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Could Reading FC face January transfer ban?

The Royals' ability to add much needed reinforcements in the January transfer window may not be affected just by the level of support by the club's new Thai owners...

Ben Hoskins

Last summer it was well documented that Reading went over a year without paying a transfer fee for a player. Nigel Adkins' preparation for this season were severely hindered by the club's long-running takeover saga.

The true fall out of the Anton Zingarevich era is still unknown but it would appear that some of Adkins' Championship colleagues may find themselves sharing his experience of a long wait to buy new reinforcements.

Financial Fair Play (FFP) blogger Ed Thompson has written a new article, published on 30th October, providing a detailed update as to the FFP consequences for Reading as well as the rest of the Championship.

Thompson wrote:

Which Championship clubs can expect to receive a Transfer Embargo?

With Championship clubs due to submit their Fair Play information to the Football League by 1 December, it is worth considering which clubs are likely to have breached the rules and the likely impact.

Looking at the Championship clubs, 9 are viewed as being ‘Likely' or ‘Very Likely' to receive a Transfer Embargo from January.

The Football League will look back at the season 2013/14 and determine which clubs exceeded the permitted loss limits for that season. During 2013/14 clubs were able to make losses up to £3m for the season (rising to a maximum of £8m if the owner was prepared to put their hand in their pocket to inject equity [i.e. not loans] into the club to cover the difference).

Some expenditure is excluded (such as charitable donations, promotion bonuses, and youth development expenditure).  N.B. Championship Youth Development costs are unlikely to be much over £700k.


2012/13 profit/loss

Transfer ban likelihood


Birmingham City


Very likely

Results released in HK for 2013/14 suggest losses above threshold. Owner  unlikely to have inject equity

Blackburn Rovers


Very likely

Club have already stated a transfer ban is to be expected




Bottom of table with well-documented issues but costs seem to be under control

Bolton Wanderers


Very likely

Club over £160m in debt and recent press reports that club may be sold.



Very likely

The 12/13 loss related to L1 - costs will have increased since then. £5.75m  cash for Lallana in July unlikely to be enough to remove ban for Summer



Hard to call

Likely to need  an equity injection from owner and probably OK if injection made




Advocates for FFP who have cut costs to meet thresholds. Equity injection will probably be required.

Cardiff City


Not possible

Ex PL club so no ban possible until 2015/16

Charlton Athletic


Hard to call

Likely to need an equity injection from owner and probably OK if injection made. New owners net spenders this season.

Derby County



Sold naming rights to stadium last season but will need equity injection. Tfr profit last season and subsequent spending suggests club will be within limits



Not possible

Ex PL club so no ban possible until 2015/16

Huddersfield Town



Advocates for FFP and want interactive FFP controls

Ipswich Town



Club cut costs and McCarthy announced "we are keeping to FFP rules, I'm damn sure not everyone else is"

Leeds United



It is hard to envisage either owner having injected the equity to cover losses over £3m. Sale of McCormack for £10.4m will help 2014/15 results.



Very likely

Owner likely to inject equity but despite cost-cutting, unlikely to be within threshold



Very unlikely

Costs under control and don't appear to have paid a transfer fee for last two seasons

Norwich City


Not possible

Ex PL club so no ban possible until 2015/16

Nottingham Forest


Very likely

Likely ban reported by local press. Club spent heavily last season and reinvested sales proceeds in Summer on new signings.



Hard to call

Parachute payments will have helped considerably but whether they cut costs enough is hard to call. New owner in place before end of financial year so equity injection likely. Key player sales will help 2014/15 position.

Rotherham United


Very  unlikely

A club used to keeping costs under control

Sheffield Wednesday



Appear to have kept costs under control and require minimal (if any) equity




Low net spend over last two seasons

Wigan Athletic


Very unlikely

Parachute payments and sale of McCarthy for £13m should see Wigan OK



Very likely

Hard to envisage losses in their promotion-season from L1 being below threshold.

Of the three clubs that were promoted to the Premier League last season, Leicester and QPR are expected to have incurred total fines or around £50m in total:


2012/13 profit/loss

Fair  Play tax likelihood


Leicester City


Very likely

Fine could easily be around £20m



Hard to call

Owner likely to have injected equity and any fine (if there were one) would be very low (i.e. less than £250k)



Very likely

Fine probably somewhere between £27m and £35m

How the embargo works

Any embargo would be applied before the start of January Transfer window. Under the ban, a club could still players however they will only be able to sign a player if it is on a ‘one a one-out, one in' basis where both the following conditions apply:

  • The club has fewer than 24 registered players, and
  • The incoming player has wages of below 75% of the departing player.

Once an embargo is applied a club can apply in March to the Football League to have the ban removed. However the removal of the ban cannot take place until 31 May 2015 and will only occur where the club has submitted Interim Information that confirms the club is on target to pass the FFP test in the following December (i.e. relating to the 2014/15 Season).

It is therefore possible that some of the clubs that start their transfer embargo in 1 January 2015 will not have their ban removed during next summer's transfer window.

Possible changes to the FFP rules

On 6th November Championship clubs are due to meet to discuss and vote on new FFP rules.

The current version of the rules were voted in by member clubs in April 2012; meetings to update the existing rules took place towards the end of last season but clubs could not agree on a new measure.

Any new rules are unlikely to impact on any transfer embargoes due to be applied in January (although they could potentially impact on any transfer embargoes relating to summer 2015.

With so many disparate interests and different financial positions amongst clubs in the Championship, gaining a consensus on one set of rules or approach is again likely to prove difficult.

Not surprisingly Thompson is, like the rest of us, unsure of the true financial ramifications of Zingarevich's spell in charge at the Madejski Stadium. The money generated from the sales of Adam Le Fondre and Sean Morrison should hopefully help Reading pass the new rules.

Some of our Championship rivals, though, may not be so lucky. It is likely we will hear plenty more about the FFP rules before the turn of the year.

You can read more from Ed over at the Financial Fair Play Blog.