EU Commission requires Spanish football clubs to pay back State aid

Ceyhun Pehlivan
EU Commission requires Spanish football clubs to pay back State aid

On 4 July 2016, the European Commission has ordered Real Madrid, Barcelona and five other Spanish football clubs (Valencia, Athletic Bilbao, Atlético Osasuna, Elche, and Hercules) to repay tens of millions received as state aid in breach of EU unfair competition regulations.

According to the EU Commission, public financial support granted by Spain to these football clubs gave them an unfair advantage over other clubs based on the following findings:

  1. Four Spanish clubs (Real Madrid, Barcelona, Bilbao, Osasuna) were treated as non-profit organisations during over twenty years and benefitted a 5% lower tax rate than their competitors that were considered as limited liability companies for tax purposes in Spain;
  2. Three Valencia football clubs (Valencia, Hercules and Elche) were granted loans from a State-owned organisation when they were allegedly going through financial hardship. The European Commission considers that the public guarantee allowed the clubs to obtain the loans on more favourable terms by giving them an economic advantage over their rivals; and
  3. The Commission investigated a settlement on a land transfer between Real Madrid and the City of Madrid. The EU Commission states that the land affected by the transaction was overvalued by €18.4 million, which would give Real Madrid an unjustified advantage over other clubs.

As a result, these seven Spanish football clubs now have to pay back the advantage they received.

Separately, the Commission cleared Dutch aid given to four clubs (FC Den Bosch, MVV Maastricht, NEC Nijmegen and Willem II, Tilburg), saying the support complied with EU State aid rules.

Ceyhun PehlivanCeyhun Pehlivan
DLA Piper LLP

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