Citizen Football Clubs Relying on Taxes Face Lax Subsidy Management

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The problem is that the number of these citizen- and municipality-backed football clubs, which effectively survive on taxpayer money, is steadily increasing. That is not all. It is difficult to tell where and how much of these subsidies are being spent, and the K League governing body, which is supposed to oversee this, is failing to play its proper role.

Reporter Pyeon Gwanghyeon has this exclusive report.

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Emerging after the 2002 FIFA World Cup to utilize infrastructure and develop the K League, citizen- and municipality-backed clubs have steadily grown in number following the introduction of the promotion-relegation system in the 2010s, increasing their weight within the K League.

Over the past six years, they have increased at a rate of one team per year, eventually coming to make up a majority of the league.

Many citizen and municipal clubs have effectively been used as tools for local government authorities to secure their own interests, leaving them lacking the motivation to pursue "self-reliant management." As a result, municipal subsidies have been on an upward trend every year.

Despite massive amounts of taxpayer money being injected, critics point out that subsidies are recorded inconsistently in accounting books, making it difficult for citizens to examine the clubs' finances.

Club A classified 7 billion won out of the 8 billion won it received from the city as a "capital transfer" added to its capital, making the subsidy appear to be only around 1 billion won. Meanwhile, Club B used a method called "offsetting," subtracting about 10 billion won in municipal funding from its expenditures, making it impossible to ascertain the scale of subsidies just by looking at the financial statements.

There are even clubs that do not disclose their financial statements at all.

[Official at Citizen Club C: We are not subject to public disclosure requirements because of our sales volume or things like that. (So there is no way for outsiders to see it?) Yes, that is correct.]

Supervision by the K League, which manages and oversees club operations, is also lax.

When reviewing the qualifications of newly established clubs, the league does look into financial soundness, but the threshold is so low that teams only need to avoid three consecutive years of net losses or complete capital impairment.

The criteria for maintaining the eligibility of existing clubs are even lower. Simply put, a club just needs a balance of zero won or more, and even if it falls into complete capital impairment, it has until 2030 to resolve it.

[Jung Do-jin / Professor of Business Administration, Chung-Ang University: It is a rock-bottom standard based on the assumption that subsidies will inevitably have to be continuously injected.]

While the K League stated that it would strengthen financial management,

[Cho Yeon-sang / Secretary-General, K League: As for more proactive systems we are considering, one is a salary cap. We are also devising roster systems to limit the number of players a squad can hold to a certain level.]

It did not give a clear answer on whether it would change the policy direction of continuously increasing the number of citizen and municipal clubs.

(Video Report: Yang Doo-won | Video Editing: Park Ki-deok | Design: Byun Da-young, Kim Min-young)
※ Please note: This article was translated by AI and may contain errors.