Profit Soars from 1.3 Billion to 17.2 Billion: Why Golf Association Members Are Crying [Win-Win Game③]

KLPGA Achieved 24.1 Billion KRW Net Profit Last Year
Annual Broadcast Rights Fee of 15 Billion KRW Boosts Popularity
Lower-Tier Tour Golfers Face Economic Burden and Career Concerns
Need for Various Welfare Benefits, Education, and Employment Support

"I'm already worried."

This is a sigh from the father of a golf player competing in the Korea Professional Golf Association (KPGA) Challenge (2nd division) Tour. "I planned to have him quit playing last year. But my son said he wanted to try for one more year. In the end, I couldn't go against his wishes. He is still playing on the Challenge Tour this year, but his results are not promising. My wife and I have been discussing our son's future, and it's giving me a headache. Continuing his career as a player is financially very burdensome."

Being a golf player requires a lot of expenses. Especially for players on the Challenge Tour, which is not the main tour, it is almost impossible to continue their career without financial support from their parents. This player's father has made a tremendous investment to raise his son as a golf player. He has poured in 2 billion KRW so far. However, his son has yet to appear on the 1st division tour.

The player's father said, "Playing on the 2nd division tour instead of the main tour requires a lot of money. You have to pay for lessons, practice rounds, tournament entry fees, and green fees," adding, "It costs at least 80 million KRW and up to 100 million KRW per year. It's not an amount that can be easily prepared." He continued, "The association operates the tour with stable funding. Support measures for 2nd division tour players are urgently needed," he appealed.

◆Association = Wealthy The Korea Ladies Professional Golf Association (KLPGA) and KPGA are thriving. They operate stable tours based on sufficient funds. Especially, the KLPGA and Korea Ladies Professional Golf Tour (KLPGT) are booming. Last year, they achieved a record net profit of 24.1 billion KRW. Previously, net profits ranged between 2 to 4 billion KRW. In 2023, the total revenue of KLPGA and KLPGT was 67.2 billion KRW. KLPGA's revenue was recorded at 46.6 billion KRW, including land and building assets worth 26.1 billion KRW, interest and dividend income of 17.8 billion KRW, and membership fees of 2.6 billion KRW. KLPGT's revenue was 20.6 billion KRW, including broadcasting rights fees of 15 billion KRW, event income of 3.9 billion KRW, and interest income of 900 million KRW.

The reason KLPGA and KLPGT could earn so much money was broadcasting rights fees. Since last year, they have received 15 billion KRW annually. This secured solid financial stability. Additionally, KLPGA purchased the Gildong headquarters building, which has 4 floors above ground and 2 basement levels, with a total floor area of 4,297.52㎡ (about 1,300 pyeong). The 1st and 2nd floors are leased out. Membership fees are also substantial. Currently, there are 3,048 members. Annual fees are 120,000 KRW, funeral fees 60,000 KRW, initial registration fees 3 million KRW, and income is also generated from tournament and qualifying round entry fees and certification fees.

KPGA and Korea Professional Golf Tour (KPGT) also manage considerable funds. From 2018 to 2022, the broadcasting rights fees KPGA Tour contracted with JTBC Plus amounted to only 1.8 billion KRW. Starting with 1 billion KRW in the first year, then 300 million KRW in 2019, 200 million KRW each in 2020 and 2021, and 100 million KRW in 2022. The average over the past five years was just 360 million KRW. However, last year, for the first time, they received over 3 billion KRW. This laid the foundation for stable tour operation.

KPGA has 6,935 members, with regular members paying an annual fee of 300,000 KRW and associate members 240,000 KRW. Membership fees alone exceed 2 billion KRW annually. Entrance fees are 3 million KRW for regular members and 2 million KRW for associate members. KPGA also owns a headquarters building in Pangyo with 10 floors above ground and 3 basement levels. It is known to generate monthly rental income in the hundreds of millions of KRW. KPGA Tour refused to disclose exact data, stating, "According to regulations, we cannot show it. We have never disclosed it to the media. The general meeting materials are confidential." It is known that KPGA conducted a special audit on expenditures last year, checking whether corporate cards were used appropriately and how the budget was spent during the previous administration.

◆Usage and Proper Investment Where was most of the substantial income of KLPGA and KPGA spent? Mostly on tournament operating costs. In 2023, KLPGA and KLPGT's total expenditures amounted to 41.9 billion KRW. KLPGA spent a total of 29.4 billion KRW, including 28.3 billion KRW on land, buildings, and business expenses, 350 million KRW on welfare, 550 million KRW on management, 120 million KRW on corporate tax, and 40 million KRW on education. KLPGT's expenditures were 12.5 billion KRW, mainly on event business expenses (4.6 billion KRW), business expenses (3.6 billion KRW), management expenses (2.1 billion KRW), and corporate tax (1.8 billion KRW).

Domestic men's and women's tours are smiling broadly. They are literally sitting on a pile of money. However, there are concerns that the bubble may burst. Only prize money has increased, while the number of tournaments has actually decreased. Critics say it lacks substance. Interest has also waned as top players move overseas. There is advice that efforts should be made to attract tournaments in Southeast Asia, such as Singapore, the Philippines, and Vietnam, rather than staying only in Korea.

Above all, investment for the future is necessary. In the case of the KLPGA Tour, active investment in the Dream (2nd division) and Jump (3rd division) Tours is essential. Without a foundation, competitiveness on the world stage will be lost. Last year, the Dream Tour's top prize money earner was Moon Jeong-min, who earned only 48,426,749 KRW. On the Jump Tour, Yang Jin-seo earned 13,761,625 KRW, ranking first in prize money. The structure is such that the more tournaments they play, the more deficits accumulate. Drastic measures are needed to increase prize money in lower-tier tournaments and waive entry fees and green fees.

The association collects annual membership fees from members. Spending that matches this is necessary. KLPGA spent 36 million KRW on member education and 350 million KRW on welfare last year. There are calls to expand these further. A player belonging to the 2nd division tour expressed dissatisfaction, saying, "Bold education and investment for members are needed. It feels like we only pay fees but don't really receive anything special." Retired players also demand active efforts from the association. One retired player said, "I hope they pay attention to creating jobs for members like the LPGA Tour in the U.S. It would be good if they offered various levels of professional certification to help with employment."