Despite recent movements for fan ownership of clubs in England, there are still plenty of teams in the top few divisions that are reliant on their wealthy owners for survival. TV deals might make Premier League football profitable for now, but below the top-flight, and in other leagues around the world, football clubs are massively unsustainable and in many cases completely dependent on their owners’ cash for their very existence. If the owner goes bankrupt, or suddenly pulls out of the club, then the inherent unsustainability of football often results in fans seeing their beloved club fall down the leagues and face the risk of administration or even, in the worst case scenario, the end of their team.
While there is always a risk of the owner suddenly pulling out, or going bankrupt, is there also the possibility of an owner cutting investment without damaging the club?
Lists of the world’s richest clubs often exclude Suwon Bluewings, instead listing the sheiks and oligarchs that have recently been pouring their petrodollars into the likes of Manchester City and Chelsea. From a purely financial standpoint, however, Samsung, the company that owns the Bluewings, has assets that dwarf those of Roman Abramovich and the groups of investors from the Gulf States. The company’s annual revenue is three-quarters of the annual GDP of the entire United Arab Emirates itself. If Samsung, the world’s sixth largest company, chose to pump its money into its sports teams, then they could afford to sign practically anyone they wanted.
Samsung isn’t the only company to own a football team, of course. In South Korea and Japan, many sports teams are owned by the huge conglomerates that dominate the industrial landscape of the two countries. From Mazda in Japan, who own the J-League champions Sanfrecce Hiroshima, to steel giant POSCO, who own Korean sides Pohang Steelers and Jeonnam Dragons, these companies provide an abnormally large portion of the clubs’ revenues, without which they would struggle to compete.
Along with Suwon Bluewings, Samsung also owns the Samsung Lions baseball team. The Lions were the Korean champions for four years in a row before last year, when the team had to suspend several of their star players for illegal gambling, and subsequently lost the season finale to the Doosan Bears. Suwon Bluewings have luckily avoided any such controversy, despite scandals hitting the K-League left, right, and centre in recent seasons. In fact, they were actually even more successful than their baseball hitting counterparts back at the turn of the millennium, when they won three of their four K-League championships and twice won both the Asian Champions’ League and Asian Super Cup.
Having finished second in the league for the past two seasons, outsiders might believe that the glory days are about to come back to the Big Bird Stadium, Suwon’s iconic home ground that hosted the 2002 World Cup. Fans of the club are not so sure.
In 2014 Samsung moved the club, along with the Samsung Lions, and the company’s basketball and volleyball teams, from its powerful and world-famous electronics division, to its smaller advertising division, Cheil Worldwide. Since then, Cheil Worldwide have embarked on a cost-cutting mission as they look to make Suwon Bluewings more efficient and self-sustainable. They have also looked to diversify the club’s sponsorship options away from Samsung. In the business world, such activity would be laudable, but football isn’t business, and Korean football itself has several unique features which hinder sustainability.
Due to the popularity of baseball, among other reasons, the K-League gets neglected by television networks and subsequently has a far lower advertising pull than it may do otherwise. Matches also don’t attract many fans, although the well-supported Suwon Bluewings, along with FC Seoul and Jeonbuk Motors, are the exceptions. As a result, there is little money coming into the sport. Compared to their regional neighbours, the K-League is at a massive financial disadvantage. The J-League’s average attendances are more than double, and TV deals more than 20 times that of the K-League. Even the up-and-coming Thai Premier League has higher attendances and has recently negotiated a far better TV deal than Korea’s domestic league.
In an attempt to boost attendances in the past, many of the clubs used to give away thousands of free tickets to employees of their parent companies. Some of these invariably get sold for price by touts outside matches, reducing ticket revenue even further. Samsung have been trying to reduce the number of free tickets given away to employees, with some success. To their dismay though, local rivals Suwon FC, who are owned by the city government, have actually considered making some of their games free for everyone. When up against these types of problems, increasing match day revenues must feel like one step forwards, two steps back for Cheil Worldwide.
Another issue in Korean is that the majority of the teams in the K-League don’t own their own stadiums, preventing them from using these as a source of revenue. The clubs also have to pay rents to use the stadiums, which are often far too large for the clubs themselves as they were built for the 2002 World Cup. Suwon Bluewings are lucky in some respects; at least their stadium was built with football in mind, and thus doesn’t have a running track around it to discourage fans due to the poor views. The issue of stadium revenue was one of the first obstacles that Cheil came up against in their plans to streamline the Bluewings. During matches, the stadium had been showing advertisements that were unrelated to the club’s sponsors, eating into potential revenue. Cheil eventually resolved this issue, but not before a standoff which involved the company threatening to move Suwon Bluewings away from the Big Bird Stadium.
As increasing revenue has proved to be difficult, attempts by Cheil to balance the books have had to involve a reduction in expenditure, with noticeable effects on the pitch. High-earning players have been moved on, with not much coming in to replace them. The first name to leave the Big Bird Stadium was North Korean striker Jong Tae-se. When Suwon signed the then-North Korean international from FC Köln in 2013 it caused a bit of a stir south of the Demilitarised Zone that separates the Korean peninsula.
The strong target man received inevitable abuse from the opposition fans in every match, and right-wingers in the country even called for him to be arrested due to his political allegiances. However, his ability to hold the ball up was instrumental to Suwon’s two second place finishes, and his transfer to Shimizu S-Pulse midway through last season was seen by some as a sign of surrender in that title race. His move from the side second in the K-League to S-Pulse, who were then battling relegation to the second tier of Japanese football, was largely due to Suwon’s financial situation. Jong Tae-se stated that the reason for his move was that the Bluewings were unwilling to offer him a new contract whereas Shimizu S-Pulse had offered him a long-term deal that the then thirty-one year old couldn’t refuse.
Over the winter, several other high-earners followed Jong Tae-se out of the exit door in an attempt to lower what was the second highest wage bill in the league in 2015. Goalkeeper Jeong Sung-ryung, one of the highest earners in the whole of the K-League, left for J-League side Kawasaki Frontale, and defender Oh Beom-seok moved to the moneyed Chinese Super League to join Hangzhou Greentown.
Other players also left, but the situation could have been worse for Suwon, who did manage to keep hold of their star midfielders Kwon Chang-hoon and Yeom Ki-hoon for the time being. However the level of their acquisitions has been less than impressive, especially in the striker department. One of their winter targets chose second tier Daejeon Citizen over the Bluewings, and the only foreign player that they brought in this winter was plying his trade in the São Paulo regional leagues last season. With no replacement for Jeong Tae-se coming in, Suwon have had to rely on the young Kim Gun-hee who is making his debut season for the club. Despite all the potential that he has, Kim Gun-hee will struggle with having the whole hopes of the team on his shoulders when he really should be integrated into the team more gradually rather than thrust in at the deep end.
Suwon’s young and talented side might be able to keep them competitive for this season at least, but without help from the outside, their long-term competitiveness looks far less certain. In a league where around 80 percent of clubs’ revenues come from ‘sponsorship’ from either their parent company, or the local government, a complete lack of investment by Samsung would be fatal for the Bluewings. For Korean sides, there is a need to make the K-League a sustainable entity in itself, so that clubs are no longer reliant on their owners’ money. Unless that happens, it may be impossible for Suwon Bluewings to wean themselves off their corporate owners.
Not just in Korea, but in football in general, a move towards sustainability would help safeguard clubs from the whims of owners, and would spare fans the agony of having little or no control over the fortunes of their clubs.
By Steve Price. Follow @kleaguefootball