The K League will establish the sustainability of the league and its clubs through a financial soundness system introduced this year.
The Korea Professional Football Association held its weekly briefing at 11 a.m. on Nov. 26 at the Jongno-gu Football Hall in Seoul, with topics including the prospects of teams advancing to the K League 1 Final A and the K League Financial Stability System.
The league has been working to identify and resolve financial issues since the establishment of the Financial Stabilization Task Force in 2020, when the entire league faced an economic crisis due to COVID-19. After steady communication with each club, it introduced the K League Financial Stabilization System this year.
In particular, the system is characterized by proactive control rather than reactive sanctions, which is adopted by most leagues including UEFA. It is a will to prevent the occurrence of double deficits by proactively checking compliance at the time of player registration and then applying reactive sanctions by reviewing financial statements.
There are three main components of the financial stabilization system: ▲ compliance with the break-even point indicator, ▲ a 70% cap on player expenses as a percentage of revenue, and ▲ full capital leakage management.
Clubs cannot spend more than they earn each year. This includes profit and loss. If there is a deficit, it will be deducted from the current year’s budgeted revenue, and if there is a surplus, it will be added to the current year. Player expenses, including base salary, allowances, transfer fees, and solidarity contributions, are capped at 70% of the club’s total revenue.
In addition, clubs with zero equity in their financial statements must submit improvement plans and resolve them within the deadline set by the federation, and may be referred to the penalty committee in some cases.
An official from the federation said, “By prioritizing performance, it will be possible to prevent overspending on squad expenses and establish an efficient budget by allocating the entire budget to marketing and youth facilities.”스포츠토토
Meanwhile, the K League Financial Stability System was introduced at the 2023 AFC Professional Football Seminar held at the Asian Football Confederation (AFC) headquarters in Kuala Lumpur, Malaysia, on Nov. 11 and 12, and has attracted interest from Saudi Arabia and other Southeast Asian countries.
In the current situation where the professional league industry structure in Asia and Europe is different, it is said that it was interesting to see the K League case where the financial reconstruction system adapted to Asian conditions was established first.