The Busan Metropolitan Government has decided to end the free office rent it has long given the International Esports Federation (IESF), following an official city audit that found the arrangement lacked a proper legal basis. The change could put the federation’s presence in South Korea at risk, as some of its board members are now discussing moving its headquarters abroad.
Under the new terms, the IESF will have to start paying rent in January of next year. City officials told the federation that its rent-free status, along with the private, non-competitive lease arrangement it had been operating under, would be terminated. The IESF’s executive leadership then reported the matter to its Board of Directors, and the notice has reportedly caused considerable dismay.
The decision came out of a special audit carried out in September by the Busan Metropolitan City Audit Committee. The audit looked at how public property was being managed by city-affiliated organisations in the Haeundae district, including the Busan IT Industry Promotion Agency (BIPA), the Busan Cinema Center and BEXCO.
According to a FinancialPost report, auditors found that these institutions had been providing public office space to several organisations, the IESF among them, free of charge without a valid legal or regulatory basis under public property management rules. Following the audit’s corrective instructions, Busan informed the relevant agencies and the IESF of the change. City officials said that notifying the federation was an unavoidable step to fix the legal problems the audit identified.
The timing of the notice has added to the frustration. IESF President Vlad Marinescu had met with the Busan Mayor only weeks earlier to reaffirm cooperation and strengthen ties between the two sides. Of the IESF’s 20 board directors, 19 are foreign nationals, and a significant number of them have voiced dissatisfaction with the sudden change.
Some have suggested moving the global headquarters out of South Korea altogether. Board members have raised the possibility of relocating the secretariat to countries that are actively competing to host international esports governing bodies, including Indonesia, the United Arab Emirates and Norway.
Busan officials have acknowledged that losing an international organisation is a real risk, even though they are bound by the auditors’ legal findings. To avoid an abrupt departure, the city is reviewing several compromise options.
These include reducing the size of the office space the IESF occupies so that its total rent is lower and revising local city ordinances to create a legal framework that would allow discounted or subsidised rent for international organisations. The city is also looking at other support arrangements that would comply with public property laws without forcing the federation to leave.
The IESF board has not made a final decision on relocation, and discussions over possible compromise terms are continuing.
The IESF has deep roots in the city. It was founded in 2008 at the Nurimaru APEC House on Dongbaekseong Island in Busan. It later operated mainly out of Seoul, but in 2017 Busan signed a Memorandum of Understanding with the federation to bring its permanent headquarters to the city.
The aim was to support the local esports industry and establish Busan as a global esports hub. As part of the deal, the city offered rent-free office space in facilities managed by BIPA in Haeundae-gu. During this partnership, the IESF has held its annual World Esports Summit (WES) in Busan for a decade, hosted the World Esports Championships, and led international anti-doping programs in esports.
