Lee Sedol Submits Resignation Letter to Korean Pro Go Assn.

[Kirby]

(From: http://www.insight.co.kr/newsRead.php?ArtNo=62209 and several other articles)

On the 17th Lee Sedol submit a letter of resignation to the Korean pro association, along with his brother, Lee Sanghun. All 320 Korean pros are a part of this association.

Apparently, Lee Sedol had an issue with the uniform deduction that the association takes out from all players. There is about a 3~5% deduction related to members' games that they take out. So players that win a lot of money pay a larger contribution to this amount.

Despite this, Lee Sedol has the intention to continue activity as a pro go player. It seems that he just wants to resign from that association.

[Bill Spight]

I guess some people don't even like a flat tax.

[Kirby]

I guess some people don't even like a flat tax.

The association is in a bit of a pickle.

If they agree to let Lee Sedol quit the association and keep playing games as a pro without paying that fee, other pros may follow suit - why would they want to keep paying that 3-5% if Lee Sedol doesn't have to.

OTOH, if they put some restrictions on the games Lee Sedol can play, fans and/or sponsors could object - it's Lee Sedol, afterall.

Lee Sedol had some friction with this same organization prior to taking a leave from playing games in 2009. This time, I guess his intention is to keep playing games, while quitting that association.

[Uberdude]

So it seems Lee is planning to win the Ing cup.

[EdLee]

Does anyone know what's the equivalent 'flat tax' from the China Go Association ?
Is it (much) higher than 3-5% ? Order of 30 - 50% ?

[Uberdude]

FYI the marginal income tax rate in South Korea for earnings over 80 million Won (£46k, $67k) is 35%.

3-5% doesn't strike me as too excessive, though I can see for a top pro with big winnings it becomes a lot. But I think that's part of the deal of pro associations: they exist to support and nurture pros and when you join when you are at the beginning of your career they are taking a bet on you: you might end up a failure and not win anything, or you might be a huge success, and the later will subsidise the former. Does anyone know what Lee's objections were, or if he proposed a different system that was rejected? Perhaps he wanted a cap, or it to only apply to games in Korea? I seem to recall his previous fracas was related to his earnings from playing in the Chinese league? Coming after the KBA involvement with organising the AlphaGo match though does seem a bit off...

[macelee]

Perhaps he wanted a cap, or it to only apply to games in Korea?

That is a good point. I understand he needs to pay a percentage of his income to the association as an obligation. On the other hand, there is a cap to the benefit he could enjoy from the association when he reaches retirement. So he is effectively subsidize other players, which may appear quite unfair.

[Kirby]

FYI the marginal income tax rate in South Korea for earnings over 80 million Won (£46k, $67k) is 35%.

3-5% doesn't strike me as too excessive, though I can see for a top pro with big winnings it becomes a lot. But I think that's part of the deal of pro associations: they exist to support and nurture pros and when you join when you are at the beginning of your career they are taking a bet on you: you might end up a failure and not win anything, or you might be a huge success, and the later will subsidise the former. Does anyone know what Lee's objections were, or if he proposed a different system that was rejected? Perhaps he wanted a cap, or it to only apply to games in Korea? I seem to recall his previous fracas was related to his earnings from playing in the Chinese league? Coming after the KBA involvement with organising the AlphaGo match though does seem a bit off...

(From this article: http://news.chosun.com/site/data/html_d ... 00320.html)

Basically, Lee Sedol's position seems to be that this Korean Pro Association is just a friendly organization, and there is no real legal requirement for him to be a part of it. The Hanguk Kiwon seems to have had some connection with this Korean Pro Association since it was much smaller with just like 20 or 30 pros.

Anyway, Lee Sedol's complaint is this 3 to 5% cut that happens for all pros, where all pros equally get 40,000,000 won for retirement, and it didn't seem fair. Combined with the fact that participation in this organization was a prerequisite for participating in some tournaments, he thought it was an unnecessary burden. Lee Sedol admitted that a law suit might result.

It seems that he finds this organization, which all Korean pros are currently a part of, to be a burden to Korean pros in general.

[Kirby]

Perhaps he wanted a cap, or it to only apply to games in Korea?

That is a good point. I understand he needs to pay a percentage of his income to the association as an obligation. On the other hand, there is a cap to the benefit he could enjoy from the association when he reaches retirement. So he is effectively subsidize other players, which may appear quite unfair.

In the same article I quoted above, Lee Sedol mentioned he is willing to pay 10% for foreign tournaments.

[Uberdude]

Ah, so is this organisation from which he is resigning not the same as the Hankuk Kiwon (and is that what we call the KBA = Korean Baduk Association?). What is the organisation that gives out pro ranks? What is the organisation whose boss appeared at the AlphaGo match ceremony to give them their honouray 9p? Do we need an org chart? Get the flipboard!

[Bill Spight]

Perhaps he wanted a cap, or it to only apply to games in Korea?

That is a good point. I understand he needs to pay a percentage of his income to the association as an obligation. On the other hand, there is a cap to the benefit he could enjoy from the association when he reaches retirement. So he is effectively subsidize other players, which may appear quite unfair.

I do not know the details, but it could easily be fair if Lee agreed to proportional fees at the beginning of his career. You have a cohort of young pros who face an uncertain future. A setup by which they pool a certain percentage of their winnings for retirement, most of which will be paid by the big winners, is fair, as they do not know who those winners will be. Without such guarantees it would be more difficult to get young people to become pros.

Edit: Let me underscore what everybody knows. Baduk is one of those professions where the monetary payoff for differences in ability is not proportional to those differences, but is concentrated at the top. The winnings of the average pro (the median) is significantly less than the average winnings (the mean).

[macelee]

In the same article I quoted above, Lee Sedol mentioned he is willing to pay 10% for foreign tournaments.

What is a 'foreign tournament'? Does that include the Chinese league? Lee in the past had dispute with the same organization regarding his earnings from China.

[gowan]

On the face of it it seems rather selfish of Lee to object to this "fee" payment. As Bill points out, at the beginning of their careers pros, nor anyone else, knows which ones will become big prize winners. Without some source of income at the start people would not choose to be pros. I suspect the weaker pros who do not win a lot of prize money are also the pros who most support and teach the amateur world in Korea, the source of new pros.

[Kirby]

What is a 'foreign tournament'? Does that include the Chinese league? Lee in the past had dispute with the same organization regarding his earnings from China.

Well, I don't know the details of how the current system is structured that well, but from the article:

"한국기원과의 충돌을 원하지 않는다"고 말한다. "외국 주최 대회 출전 수익 중 10%를 납부하는 기원 발전기금 등 기원의 다른 정책은 대부분 그대로 따를 작정"

"I don't want to class heads with the Hanguk Kiwon," he said. "Paying 10% development fee out of the earnings from tournaments hosted in foreign countries, or the other Kiwon policies, for the most part, I intend to follow.

My feeling is that he wants to keep following whatever requirements and policies the Hanguk Kiwon has, including rules they have for taking a cut from tournaments hosted in other countries.

But he wants to do away with this 3~5% cut from this Korean Pro association.

[Kirby]

I do not know the details, but it could easily be fair if Lee agreed to proportional fees at the beginning of his career. You have a cohort of young pros who face an uncertain future. A setup by which they pool a certain percentage of their winnings for retirement, most of which will be paid by the big winners, is fair, as they do not know who those winners will be. Without such guarantees it would be more difficult to get young people to become pros.

Your point about getting young people to become pros is fair.

Regarding an agreement to pay fees, part of the problem seems to be that this organization is a "friendly organization", without a formal legal agreement that pros have to be a part of it.

In the articles of association for he actual Hanguk Kiwon, they have a blurb that formally describes the relationship with the association, saying that the organization is there for the development of dignity and improving the Go ability of affiliated professionals.

Lee Sedol says that, like talent and other similar organizations, pros are free to participate or quit from this informal friendly organization.