Guangzhou pays penalty for crushing debts

The collapse of arguably China's most decorated soccer club has provided a harsh wake-up call for the country's domestic league system, with pundits calling for a more rational and sustainable approach to revive the sport for good.

Expected, yet still shocking, the disbanding of eight-time Chinese Super League (CSL) champion club Guangzhou FC, confirmed in a statement on Monday, has triggered mixed reactions from the sport's community, with fans lamenting the fall of the giant, while critics hail the end of the "big-spending" era of the Chinese leagues.

The club, formerly known as Guangzhou Evergrande, announced on Monday that it had failed to pass the Chinese Football Association's financial review for entry into the 2025 season due to heavy debts, and thereby was being disbanded, marking an abrupt end to a storied 32-year journey, which brought plenty of joy and pride to its supporters on the continental stage.

"Despite all the efforts to raise funds from all possible sources, the club could not pay off all its debts — the result of heavy financial burdens from previous seasons — by the deadline. We express our sincere apologies to our loyal fan base, and we greatly appreciate the understanding and forgiveness of all the fans," said the statement released by Guangzhou FC on Monday.

The club's prolonged financial woes — partially due to the collapse in 2021, and ultimate liquidation in January last year, of its parent company Guangzhou Evergrande Real Estate Group — first raised widespread concerns over the future of the two-time AFC Champions League winner at the end of 2022, when it was relegated from the topflight CSL, to the second-tier China League One. Things were exacerbated due to the lack of revenues across the whole of China's soccer league system.

The already fragile financial status of China's soccer pyramid was dealt a heavy blow by the pandemic, with a long list of investors divesting their soccer interests one after another. A series of legal disputes between clubs and players, especially some expensive imports, over unpaid wages made international headlines.

Right after the CFA listed Guangzhou among the clubs considered financially capable of keeping their league access in an initial review on Dec 20, Chinese national team striker Wei Shihao, a former Evergrande player, citing his long overdue wages from the 2022 relegation season, immediately questioned the approval, posting on Weibo: "How come Guangzhou passed?"

Two other clubs — top-flight team Cangzhou Mighty Lions and the third tier's Hunan Billows — also announced that they were disbanding on Monday after failing to meet the financial requirements for the new season.