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SBD Global/June 22, 2012/International Football

Guangzhou Evergrande FC Owner Under Scrutiny, Gaining Rule To Benefit Its Team

Shares in Evergrande, which owns Chinese Super League Guangzho Evergrande FC and is "one of China's largest property developers," tumbled on Thursday according to Robert Cookson of the FINANCIAL TIMES. The drop comes after a U.S. shortseller accused the company of "fraud, bribery and reckless spending on football teams." Los Angeles-based Citron Research alleged in a 57-page report on its website that Evergrande has "abused the capital markets" and "represents the worst of Chinese neo-capitalism." Evergrande's shares closed down 11.4% on Thursday, having fallen as much as 20%, and leaving the company with a market capitalisation of $7.6B. Evergrande plans to build a Chinese soccer academy for 10,000 youth in partnership with Real Madrid (FINANCIAL TIMES, 6/21).

RULE CHANGE
: In Beijing, Tang Zhe wrote Guangzhou Evergrande is on its way to "separate itself from the rest of the field a little more." The club was "granted the ability to buy two more foreign players" during a conference of the professional league council in Xianghe, Hebei province. Each CSL club is allowed up to five foreign players, which must include at least one from Asia. Guangzhou Evergrande, at the top of the CSL, proposed that clubs playing in the Asian Football Confederation Champions League be allowed to buy more foreign players "to help them remain simultaneously competitive in continental competitions and the domestic league." The proposal was approved by a 43-16 vote (CHINA DAILY, 6/21). WILD EAST FOOTBALL wrote that after the change was passed the Chinese Football Association announced a "very unusual caveat to the rule," that the new rule only applies to teams currently in the AFC Champions League, "which surely will make many of those who voted in favor of it regret their vote." It is a mid-season rules change that will "only benefit a single club," Evergrande, which proposed the change (WILDEASTFOOTBALL.net, 6/20).

INSIDE THE LEAGUE: WILD EAST FOOTBALL also noted that the CSL released a "state of the game" report that included some statistics about salaries and revenues. Guangzhou Evergrande won the CSL title last season and "outpace the league when it came to attendance." However, the club's more than 45,000 average did not lead them to earning the most through ticket revenue though. Beijing Guoan earned the most, RMB 20M ($3.1M), while Guangzhou Evergrande finished second, earning RMB 17M ($2.7M). The average CSL salary is RMB 5.5M ($864,000), while two years it was just RMB 2M ($314,000), but there is a large gap between the average salary of foreign and domestic players, "a gap that has been widened very quickly." The total amount spent on salaries has also doubled, going from RMB 400M ($62.8M) to RMB 880M ($138.2M) (WILDEASTFOOTBALL.net, 6/20).
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