Operating on Taxpayer Money While Claiming to Be 'Professional,' but Facing Poor Management (Full Video)

[Anchor]

The structural problems behind the decline of South Korean football following the North and Central America World Cup are being starkly exposed. One of the fundamental causes is the fragile ecosystem of professional football, which should serve as its foundation. Following an exhaustive survey of professional football clubs by SBS, it was found that the vast majority operate in name only as "professionals" and are virtually incapable of functioning without massive tax subsidies.

First, an exclusive report by reporter Lee Jeong-Chan.

[Reporter Lee Jeong-Chan]

Currently, the 1st and 2nd divisions of professional football's K League consist of a total of 29 teams, among which 17 are so-called "citizen clubs" supported by local governments.

While criticism has persisted that these citizen clubs rely on local government "subsidies" financed by taxes rather than self-generated revenue, an exhaustive SBS survey revealed that the situation is far more severe than anticipated.

Analyzing the financial data of 14 clubs—excluding three teams that newly joined this year—the total subsidies received by these 14 teams from local governments last year amounted to 140.1 billion KRW, accounting for 64% of their total revenue.

Among them, only three clubs—Gangwon, Daegu, and 인천 (Incheon), which have a long history and operate in the form of stock corporations—generated more self-revenue than 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 self-generated revenues of Gangwon, Daegu, and 인천 (Incheon) alone.

What is even more alarming is that even this level of subsidies is not enough for the survival of citizen clubs.

Paju faced the risk of unpaid wages from the very first year of its professional transition, while Gimhae recorded only two wins in its debut season, pushing it to the brink of survival.

[Jung Young-du / Mayor of Gimhae: If we determine that there is neither financial sustainability nor public significance, as club owner, I have no choice but to make a decision.]

Gimpo, where an accounting staff member was arrested on suspicion of embezzling tens of billions of won, is barely surviving by patching up its financial deficit with supplementary budgets.

This stands in stark contrast to major European leagues—which operate professionally based on sponsorship revenue, ticket and merchandise sales, and broadcasting rights fees—as well as domestic professional baseball, which has increased its "self-sustainability" by reducing the proportion of parent company support from 41% in 2018 to 25% last year.

[Anchor]

The problem is that the number of citizen clubs virtually surviving on taxpayer money is steadily increasing. That is not all. It is difficult to figure out where and how much of these subsidies are being used, and the Korea Professional Football League, which is supposed to monitor this, is failing to play its proper role.

Reporter Pyun Kwang-Hyun investigated this story exclusively.

[Reporter Pyun Kwang-Hyun]

Launched after the 2002 Korea-Japan World Cup to utilize infrastructure and develop the K League, citizen clubs have continuously grown in number following the introduction of the promotion and relegation system in the 2010s, increasing their weight within the K League.

Over the past six years, they have grown at a rate of one team per year, eventually occupying a majority in the league.

Many citizen clubs have practically been used as tools for local government authorities to look after their own interests, lacking the motivation to pursue "self-managed business," and as a result, "local government subsidies" continue to increase every year.

Despite massive "tax money" being poured in, criticism arises that subsidies are not recorded in a standardized manner on account books, making it difficult for citizens to inspect club finances.

Club A classified 7 billion KRW out of 8 billion KRW received from the city as "capital transfer," adding it to capital, making the subsidy appear to be only around 1 billion KRW. Meanwhile, Club B performed a so-called "offsetting" method, subtracting about 10 billion KRW in municipal funds from incurred expenses, making it impossible to verify 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: Because of sales and things like that, we are not subject to public disclosure. (So there is no way for outsiders to see it?) Yes, that's correct.]

The oversight by the Korea Professional Football League, which manages and supervises club operations, is also lax.

While it examines 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 standards for maintaining eligibility for existing clubs are even lower; simply put, a club's balance just needs to be zero won or more, and even if they fall into complete capital impairment, they have until 2030 to resolve it.

[Jung Do-jin / Professor of Business Administration, Chung-Ang University: It is a rock-bottom baseline 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, Korea Professional Football League: One more proactive system we are considering is a salary cap. We are also devising a roster system to cap the number of players a squad can hold at a certain level.]

However, it did not give a clear answer on whether it would change the policy direction of continuously increasing citizen clubs.

(Photo: Yonhap News)
(Video reporting: Yoo Dong-hyuk, Hwang In-seok, Yang Doo-won; Video editing: Lee Jae-sung, Park Ki-deuk; Design: Lim Chan-hyuk, Byun Da-young, Kim Min-young)
※ Please note: This article was translated by AI and may contain errors.