A yellow card for J. League

The financial conditions of J. League football clubs are deteriorating because of the nation’s economic downturn. Most J. League clubs are spilling red ink. They need to take measures to economize and the J. League should reconsider its expansion plans.

With an accumulated deficit of ¥1.1 billion, Oita Trinita was forced to ask the J. League for help. The league, which has a fund to help clubs, decided to lend ¥350 million to the club, which will be downgraded from Division 1 to Division 2 next season. The league is also considering extending an additional ¥250 million loan to the club by the end of January 2010.

Nippon Television Network Corp. has sold its stock in Tokyo Verdy to a holding company because it was dissatisfied with the Division 2 club’s performance.

FC Gifu, a Division 2 club that had borrowed ¥50 million from the J. League, asked that its end-of-November repayment deadline be postponed. The league complied and set the end of July 2010 as the new deadline.

The J. League aims to expand the number of Division 2 clubs from the current 18 to 22 by accepting clubs from the Japan Football League without imposing strict conditions. With the 18 clubs in Division 1, the total number of clubs would increase to 40.

If the economy was healthy, the J. League’s aggressive expansion policy might attract more fans. But larger draws are unlikely in the immediate future. In fact, most clubs are having difficulty securing sufficient funds from sponsors. If the J. League expands as planned, it could end up with many financially weak clubs.

The league’s decision to save Oita Trinita may have been too generous. In addition to reducing the league’s ¥1 billion fund by more than half — if the second loan goes through — it may encourage other clubs to rely on loans from the J. League instead of introducing belt-tightening measures. The league should consider an amateur-league downgrade for those clubs whose management appears lax. It should also strive for ways to invigorate the league without increasing the number of clubs.