Why most Thai football teams lose money

Thailand’s football industry has seemingly gotten things backwards. At present, only a few of the larger clubs are good at competing and making money. The smaller ones suffer continuous losses - financially and on the playing field. These latter live in fear that their “benefactors”, often politicians operating at the local and regional level, will throw in the towel.

According to Department of Business Development’s business database in 2023, of the 16 Thai League clubs which participated in the 2022 season, ten has less than 100 million baht in income. As for the other 6, only 2 clubs had income approaching 400 million baht.

And, as noted by Miti Tiyapairat, chief consultant of Singha Chiang Rai United, a northern club which won the League Championship in 2019, “the gap between smaller and larger teams is getting bigger every year.”

High costs and poor management contribute to the problem.  Running a club in Thailand is expensive.  Financial statements for the 2022 season show that club expenses ranged from 14 million to 450 million baht.

Income came mostly from the sale of tickets and souvenirs, donations from supporters and copyright revenue from livestreaming.  In many instances, it was not enough to cover expenses. In 2022, only 4 clubs made a profit - BG Pathum United, Buriram United, PT Prachuap, and Chiang Rai United. Profits ranged from 6 to 48 million baht.  The other 12 clubs clubs incurred losses ranging from 1.7 to 280 million baht.

Football politics

Politics has helped the industry to remain in the black, however.  As a result of coup d’etats and party dissolutions, many career politicians were out of work in 2017 and 2018.  Banned, ineligible, and disqualified, they turned to football to rebuild their support bases. As the league boomed, the public was treated to pictures of politicians and their relatives running football clubs. In 2023, some 16 were politically connected.

In a survey conducted after the 2023 election, the ‘sports-lifestyle’ media platform Mainstand, found that at least 11 club executives in Thai Leagues 1 and 2 were actually parliamentarians. Of these, 4 came from Bhumjaithai Party, 3 from Pheu Thai Party, 2 from Palang Pracharath, 1 from Move Forward Party and 1 from Chart Thai Pattana Party - a significant shift from how things stood in the aftermath of the 2019 election, when the industry had many executives linked to the military-backed Palang Pracharath Party.

It has been frequently said that club income is heavily dependent upon the “personal connections” of team managers with sponsors. Finding external support is much easier for the politically-influential.  Political figures involved in the running of clubs have openly said as much.  In this respect, Newin Chidchob, a powerful Thai politician from Buriram Province, shifted away from Thaksin Shinawatra’s ally and found the Bhumjai Thai Party, had role in building support for Buriram United is a case in point.  Until the 2023 election, his Bhumjaithai Party was a part of the ruling coalition. It was presumably because of this, in part, that the club was able to build a new home football field, arguably the country’s most beautiful and modern, in the space of a single year. Year after year, Buriram United has also enjoyed a high income and widespread support.

Money laundering in the football industry

In any business, financial problems are hard to avoid.  So, too, the football industry. A recent study by the Financial Action Task Force suggests that in many places, the industry is a haven for criminals. The organisation’s  ‘Report on Money Laundering through the Football Sector’ notes that the industry is often used to hide money derived through illegal practices. This sits rather awkwardly with the notion that the game has a positive role in society. People tend to believe that it is clean and motivational - a sport for the masses.

Be that as it may, the football industry is often used by criminals to clean up images and cash. Overseas, such club investors are respected as “a patron” People often don’t care where the money comes from.  Their only concern is that their local football club receives support. Clubs are closely connected to communities. Because of this, investing in a football club helps criminal networks build business links and break into political circles, locally and at the national level.

In the Thai football industry, investments in clubs, especially when made by influential figures with political connections and well-off individuals involved with nebulous business activities, have long raised questions. Over a decade back, Phumkiat Wannakaew, a researcher in the Faculty of Law at Chulalongkorn University, investigated the matter and found that most clubs did not have enough income to cover expenses, created an opportunity for owners - frequently businessmen, investors and politicians to hide income they did not want to declare.

A more recent survey conducted by Glocal found a number of cases involving gambling and money laundering in the football industry.  Notable examples from the 2022-2023 period include: Chanonphat Naksua, president of Nakornsri United FC as well as a parliamentarian representing Songkhla’s District 4 in the lower house, who was arrested for his involvement in an online gambling network; Mangkorn Fa Lottery Company,  the main sponsor of Thai League 3, which came under investigation for selling overpriced lottery tickets and running a gambling website; and the charges of money laundering and organising a gambling ring which were also brought against Phantawat Nakwisut  and 17 accomplices at Kong Salak Plus, a sponsor of both Thai League 3 and Kong Salak Plus League.

Similar charges were filed last year.  Lamphun Warrior Club president Pongsiri Thanratchawongsuek, or “Boss Tan” , was initially arrested in June 2022.  He and his accomplices were later charged with online gaming and money laundering.  The police reportedly have reliable witnesses and are currently working with the Anti-Money Laundering Office to investigate and seize his ill-gotten assets.  This may include the Lamphun Warriors. Evidence suggests that Pongsiri bought the club to serve as a front for laundering income made through online gambling networks.

The case is worth keeping an eye on.  A strong court ruling could well lead to big changes for the Thai football industry.