East Asia Japan

Sagan Tosu on The Verge of Bankruptcy

Krishna Sadhana

Football Tribe SEA Editor


Worrying news emerged out of J.League 1 club Sagan Tosu yesterday, as club president Minoru Takehara announced the club’s finances from the fiscal year 2019, which, in Japan, concludes on March 31st of this year. Takehara revealed that the Kyushu-based club is deep in the red financially, with the club bleeding approximately $18.6 million in the previous fiscal year. Despite a relatively healthy merchandise and ticket sales, Tosu’s sponsorship revenue has been declining at a worrying rate, which, coupled with an increase in expenses regarding players and staff as well as a continuous skyrocketing of non-operating expenses, meant that the club is in the verge of being shut down altogether due to bankruptcy. The threat of bankruptcy becomes even more apparent as the $3.25 million emergency loan that the J.League would provide to struggling clubs, combined with the $6.5 million that Tosu would receive from the league as their annual general distribution, are not enough to patch up the gigantic hole in Tosu’s finances.

While it was widely agreed that the costly wage of former player Fernando Torres as well as the costly lay-offs of former head coaches Massimo Ficcadenti and Lluis Carreras contributed to Tosu’s financial collapse, the rot has actually began after online gaming company Cygames withdrew their sponsorship in the winter of 2018. Cygames’ withdrawal meant that Tosu had to rely on their longtime sponsors, cosmetics giant DHC, as their main source of sponsorship income, and when DHC withdrew their sponsorship in the winter of 2019, Tosu’s finances took a massive hit. The club was forced to draft in sponsorship from local companies, who were unable to give as much funds as either Cygames or DHC, but were still able to provide enough funds to keep the club afloat for at least this season. However, the ongoing COVID-19 pandemic has forced the J.League to suspend all matches until at least either May, June, or July, which meant that Tosu were unable to earn any matchday income from the matches suspended by the pandemic. The pandemic also meant that Tosu were also unable to secure additional sponsorship including a main sponsor for the current season, while the team’s current sponsors are trying to temporarily suspend their funding in order to save costs during the pandemic.

This drought of income, combined with the club’s inability to cut back on players’ expenses due to most players being on multi-year contracts, meant that Tosu are in dire straits during the pandemic-caused suspension of football, with some fearing that Tosu might not even survive to see the league being resumed again once the suspension is lifted. But thankfully, Tosu have at least tried to keep themselves alive through the suspension thanks to third-party share allocation, and they have tried to send some of their biggest wage-earners away on loan to other clubs, with Mu Kanazaki reportedly joining Nagoya Grampus once the league restarts. However the threat of bankruptcy and with it insolvency, is indeed real and still looming over Tosu.

“We are dipping into our capital faster than other J.League clubs,” said Takehara during yesterday’s press conference on Tosu’s ailing finances, “We’ll evaluate how we do things and do all we can to keep the club going.”

Discussions have been made on whether Tosu will fold altogether or they will start life anew from the J.League 3, the lowest professional tier within the J.League pyramid, or even lower down the Japanese football pyramid as an amateur club. Sources within the J.League have noted that in order for a club like Tosu to receive an emergency loan from the league, said club must be able to pay back the loan within three years, and the loan won’t be given if the club doesn’t have the resources to pay back the loan within the specified period of time.

“They’ve had financial problems since three years ago,” said an anonymous source within the J.League, “Last year we tried to find a solution for their financial problems but we were unable to find one. If things go on the way they are right now, it will be difficult for Sagan Tosu to continue…they might cease to exist as a club this season.”

Shoud Sagan Tosu meet their untimely end this year, they will follow on the footsteps of their predecessor, Tosu Futures, who were dissolved in 1997 after a similarly catastrophic financial meltdown. Sagan Tosu were formed on the ashes of Tosu Futures, and should the club in sky blue go under, it is yet to be seen on whether the people of Tosu, and by extension Saga Prefecture, would have another team ready to represent them in the Japanese football leagues.