Gwangju FC avoided a severe penalty for violating financial soundness regulations again.
The Korea Professional Football League held its 4th disciplinary committee meeting on the 12th and announced, "A penalty of 10 million won and a one-year ban on player transfers have been imposed on the Gwangju club. However, in the case of the transfer ban, the enforcement will be suspended for three years from the date of confirmation of the disciplinary decision."
The conditions for the suspension of enforcement by the league's disciplinary committee are twofold.
The reason Gwangju received the aforementioned penalty is due to continued violations of financial soundness regulations. The league explained, "Gwangju was in a completely capital-deficient state in the fiscal year 2022, before the implementation of the financial soundness system, and also failed to comply with the profit and loss breakeven point indicator with a loss of 1.41 billion won in the fiscal year 2023 after the system was implemented. Additionally, the club's capital deficiency worsened as it failed to implement the financial improvement plan submitted."
Additionally, "Subsequently, Gwangju again failed to comply with the profit and loss breakeven point indicator with a loss of 2.3 billion won in the fiscal year 2024, and the financial improvement plan submitted by the club was not adhered to. In the process, Gwangju submitted a budget plan that overestimated revenue in order to increase the salary cap for players in preparation for the 2024-2025 AFC Champions League elite participation, but in reality, it recorded large operating losses," it added.
Gwangju's unstable finances have been a problem for some time. The club submitted an overestimated budget plan in early 2024, and when this was detected, it received a sanction that prevented them from signing players during the summer transfer market. As a result, Coach Lee Jung-hyo had to manage the 2024-2025 AFC Champions League elite with only the existing squad since September last year.
The problem is that nothing has changed this year either. The league requested Gwangju, the only team among the K League 1 and 2 clubs last November, to submit the 2024 provisional settlement and the 2025 budget plan.
However, Gwangju once again violated financial soundness regulations and ultimately could not avoid being referred to the disciplinary committee for the first time. According to the league, Gwangju is currently in a capital deficiency state amounting to 4.1 billion won.
According to Article 11 of the K League disciplinary regulations, violations of financial soundness regulations and rules can result in warnings, penalties, point deductions, transfer bans, and relegation measures. Since Gwangju has already received a warning once, public opinion has formed that a severe penalty is necessary.
However, the result was limited to a fine of 10 million won, and the one-year transfer ban was granted a suspension period of three years. At this point, the penalty given to Gwangju essentially amounts to just the 10 million won fine. Even though they have violated the regulations, they can just pay the fine and avoid further penalties as long as they do not violate them again.
Naturally, dissatisfaction has emerged among fans. This incident has greatly diminished the weight of the K League's financial soundness regulations. It can be interpreted as a case that shows that even spending money while violating regulations can lead to avoiding severe punishment.
K League, like other leagues, is criticized because investment is closely tied to performance. Of course, it is true that Coach Lee Jung-hyo and the Gwangju squad have produced several results despite difficult conditions. However, there can only be claims of equity among other teams that had to tighten their belts for fear of violating financial soundness regulations.
In particular, the K League has a structure where relegation and separation of the final round exist. Teams that operated within the regulations and fell to the lower ranks, as well as teams that fell to K League 2, understandably feel disheartened upon seeing this case. In extreme cases, there is nothing to say if a team decides to achieve results while being prepared to pay fines by violating financial soundness regulations. Such light penalties only harm the equity and credibility of the league.
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