〈Anchor〉
The structural problems behind the decline of South Korean football following the North and Central America World Cup are being laid bare. One of the fundamental causes is the vulnerability of the professional football ecosystem, which should serve as its foundation. An exhaustive survey of professional football clubs by SBS revealed that the vast majority operate under merely the "professional" title and are practically incapable of functioning without massive financial support from local governments.
First, this exclusive report by reporter Lee Jeong-Chan.
〈Reporter Lee Jeong-Chan〉
The first and second tiers of the current professional football "K League" consist of a total of 29 teams, among which 17 are so-called "citizen clubs" supported by local governments.
Persistent criticism has been raised that these citizen clubs rely on "subsidies" funded by local government taxes rather than self-generated revenue, but an exhaustive investigation by SBS showed the situation is far more severe than expected.
Analyzing the financial data of 14 clubs—excluding three newly joined teams this year—the total subsidies received by these 14 clubs from local governments last year amounted to 140.1 billion won, accounting for 64% of their total revenue.
Among them, only three clubs—Gangwon, Daegu, and 인천—which have long histories and operate in the form of stock corporations, generated more independent revenue than their subsidies.
Except for these three, the subsidy dependency rate of the remaining 11 teams reaches 73.4%, and even if the self-generated revenues of all 11 teams are combined, they fall short of the independent revenue of the three clubs: Gangwon, Daegu, and 인천.
What is even more serious is that even this level of subsidies is not enough for the survival of citizen clubs.
Paju faced the crisis of delayed wage payments from its very first year of turning professional, and Gimhae found itself at a crossroads of survival and abolition after securing only two wins in its debut season.
[Jeong Yeong-du / Mayor of Gimhae: If we judge that there is neither financial sustainability nor public significance, as the club owner, I have no choice but to make a decision.]
Gimpo, whose accounting staff member was arrested on suspicion of embezzling tens of billions of won (around 8 billion won), is surviving by plugging its financial holes with supplementary budgets.
Comparison is virtually meaningless with major European leagues that operate professionally based on sponsorship income, ticket and merchandise sales, and broadcasting rights fees. It also stands in stark contrast to domestic professional baseball, which has increased its "self-sufficiency" by reducing the proportion of support funds from parent companies from 41% in 2018 to 25% last year.
〈Anchor〉
The problem is that the number of citizen clubs surviving on taxpayers' money is steadily increasing. That is not all. It is difficult to figure out where and how much the subsidies are being spent, and the Korea Professional Football League, which is supposed to monitor this, is failing to play its role.
Reporter Pyeon Gwang-Hyeon investigated this matter exclusively.
〈Reporter Pyeon Gwang-Hyeon〉
Citizen clubs, which were launched after the 2002 Korea-Japan World Cup to utilize infrastructure and develop the K League, have continuously grown in number and increased their weight within the K League since the introduction of the promotion and relegation system in the 2010s.
Over the past six years, they have increased by roughly one team each year, eventually accounting for the majority of the league.
Many citizen clubs lacked the incentive to pursue "self-management" as they were effectively used as tools for local government authorities to secure their own interests, resulting in a continuous upward trend in "local government subsidies" every year.
Despite massive amounts of "blood money" being poured in, criticism is rising that the methods of recording subsidies in account books are not standardized, making it difficult for citizens to examine club finances.
Club A classified 7 billion won out of the 8 billion won received from the city as "capital transfer," which is added to capital, making the subsidy appear to be only around 1 billion won. Club B performed so-called "offsetting," reducing about 10 billion won in city funds from spent expenses, making it difficult to verify the scale of subsidies just by looking at the financial statements.
There are even clubs that have not disclosed their financial statements at all.
[Official at Citizen Club C: We are not subject to public disclosure due to sales and other reasons. (So there is no way for the outside to see?) Yes, that is correct.]
Monitoring by the Korea Professional Football League, which manages and supervises club operations, is also lax.
Although it reviews financial soundness when screening the eligibility of new clubs, the threshold is so low that they only need to avoid three consecutive years of net losses or complete capital impairment.
The criteria for existing clubs to maintain their status are even lower; to put it simply, a club's balance just needs to be zero won or more, and even if they fall into complete capital impairment, they only have to resolve it by 2030.
[Jeong Do-jin / Professor of Business Administration, Chung-Ang University: This is a rock-bottom standard based on the premise that subsidies will inevitably continue to be poured in endlessly.]
The Korea Professional Football League stated that it will strengthen financial management,
[Cho Yeon-sang / Secretary General of the Korea Professional Football League: We are considering even more proactive systems. One of them is a salary cap. We are also devising a roster system to limit the number of players on the squad to a certain level.]
However, it gave no clear answer on whether it would change the policy direction of continuously increasing citizen clubs.
(Video reporting: Yoo Dong-hyuk, Hwang In-seok, Yang Doo-won / Video editing: Lee Jae-sung, Park Ki-deok / Design: Lim Chan-hyeok, Byun Da-young, Kim Min-young)
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