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).
UEFA is under pressure to investigate claims of massive corruption during Ukraine's preparations for Euro 2012, amid allegations that as much as $4B in state funds allocated for the tournament was stolen by officials, according to Harding & Leigh of the London GUARDIAN. European Parliament's Green faction leader Rebecca Harms said that "UEFA had to investigate why Ukraine cancelled competitive tenders for all Euro 2012 projects in '10." Instead, contracts for roads, stadiums, and other infrastructure projects went to a "handful of shadowy companies, including one based offshore in Belize." Politicians from the opposition claim the companies belong, "directly or indirectly," to government officials. The Ukrainian government denies these allegations. The total cost of the Euro has been in dispute. Deputy PM Borys Kolesnikov said that the "government spent $5B, including $800M on stadiums." However, others have said that the real number including "related projects and state guarantees is $10B." Ukrainian taxpayers paid $585M for the reconstruction and development of the Olympic Stadium. Kyiv Post reporter Mark Rachkevych, who has investigated Euro 2012 corruption, said that "the bill was bigger than for other similar-capacity European stadiums." He added: "The Warsaw stadium was $35M cheaper. But it has a huge business centre attached." Moreover, the Allianz Arena in Munich also cost less, "despite the fact that Ukraine has cheaper labour costs than Germany" (GUARDIAN, 6/20).
Even "with their country in a severe financial crisis," the Portuguese picked the most expensive hotel of all the Euro 2012 participants, according to Rodrigo Cerqueira of LANCENET. The team from the Iberian Peninsula spends €33,174 ($41,822) a day for their stay at the Hotel Remes Sport & Spa in Opalenica, Poland. Faced with criticism, Portuguese Football Federation VP Humberto Coelho said, "Not one Portuguese will pay a cent for this. Everything that we are spending, including the prizes for the players, comes from the money we receive from UEFA." The portuguese sum "impresses when compared to the spending" of other teams teams. Germany, "one of the Euro zones strongest economies" pays €22,500 ($28,366) a day for their hotel in Gdansk, Poland. Spain who is also going through a "severe crisis" spends €4,700 ($5,925) a day for their hotel in Gniewino, Poland. Russia, Poland and Ireland who are all now eliminated from the competition spent €30,400 ($38,325), €24,000 ($30,257) and €23,000 ($28,996) a day, respectively (LANCENET, 6/21).
Brazilian Bank Itaú predicts the 2014 World Cup will increase the country's GDP 1.5% in three years, according to Beatriz Olivon of EXAME.com. The study reveals the sectors that will benefit the most from the World Cup will be "hospitality, transportation, communications, cultural intellect and retail trade." The study also estimates that, "apart from the temporary jobs during the event," 250,000 new positions will be created by the World Cup. Furthermore, "close to 165 million potential consumers in the country should spend between $3B and $6B before 2014." The official government estimate for the total World Cup costs is R$36.5 ($18B). Another interesting note is that in the past the World Cup has resulted in a "30% increase in exportation" for the host country (EXAME.com, 6/21). MEIO&MENSAGEM reported stadium construction costs at R$7.2B ($3.5B), telecommunications R$4.2B ($2.1B) and security R$4.1B ($2B). The tourism industry should see "an increase of 3 million visitors in the next three years, or 2 million foreigners and 1 million Brazilians." The impact of the World Cup could also be seen in Brazil's "social pyramid." Until '14, Brazil's middle class "should increase by 23%, going from 114 million to 140 million people" (MEIO&MENSAGEM, 6/21).
The English Football Association was fined €5,000 ($6,293) by UEFA for the "inapropriate conduct" of English fans during their win over Sweden in Kiev onFriday, according to ESPNSTAR. The fine was for "the attempted pitch invasion by England supporters during the Group D match." The fine will not be contested by the FA who believes the the "relative small amount" reflects UEFA's belief the incident "was not serious" (ESPNSTAR, 6/21).
Brazilian Sports Minister Aldo Rebelo guarantees support of Brazilian wines as official sponsors of the 2014 World Cup, according to IBRAVIN. After meeting with a number of representatives from Brazil's wine sector, Rebelo said, "The World Cup is not only the biggest sporting event worldwide, but also a big opportunity for our development, to show our virtues. Hence the interest in supporting the national viticulture." Congressman Jeronimo Goergen explained that Rebelo's support "buried once and for all the possibility of foreign wines sponsoring the event." Goergen added: "We understand the World Cup stage cannot be used for propaganda for outside products." Goergen finished by saying that "the objective is reproducing what other host nations did before and defend the interest of our products, as was the case with beer in Germany and wine in South Africa" (IBRAVIN, 6/20).