La Liga investigation opened
The European Commission has confirmed it is investigating whether Spanish authorities have given illegal state aid to seven Spanish football clubs, in a move which endangers the long-standing ‘member-owned’ status of La Liga sides including Barcelona, Real Madrid and Athletic Bilbao.
The announcement followed previous reports that the EC was worried that Spain’s central and regional governments had supported its clubs in various ways -- such as preferential tax rates, land deals, grants to build new stadiums, and guaranteeing bank loans.
Details of the bases of the investigation were contained in a press release published online on Wednesday morning.
“The Commission will firstly investigate possible tax privileges for Real Madrid CF, Barcelona CF, Athletic Club Bilbao, and Club Atletico Osasuna,” it said. “In another inquiry it will assess whether a widely reported land transfer between the City of Madrid and the club Real Madrid CF involved any state aid in favour of the club.
"Finally, it will examine the compliance with EU state aid rules of guarantees given by the state-owned Valencia Institute of Finance for loans that were used to finance the three Valencia clubs Valencia CF, Hercules CF and Elche CF, while those clubs were seemingly undergoing financial difficulties.”
The statement went on to suggest that it was up to the Spanish authorities to prove that these supports had not "unduly distorted competition" in European football’s ‘market’.
“All these measures were financed through state resources and provide advantages to specific clubs that carry out economic activities in the EU internal market,” it said. “The measures are therefore likely to affect competition and trade between Member States. As a result, they appear to involve state aid in the meaning of the EU rules. Such aid can be found compatible when it furthers a common objective without unduly distorting competition in the internal market. At this stage, Spain has not adduced any evidence to this effect.”
Joaquin Almunia, the Commission's vice president in charge of competition policy and also an Athletic fan, said in the statement that football clubs should be able to pay their own way and not receive on public money.
“Professional football clubs should finance their running costs and investments with sound financial management rather than at the expense of the taxpayer,” Almunia said. “Member States and public authorities must comply with EU rules on state aid in this sector as in all economic sectors.”
Spain’s sports minister Miguel Cardenal told AS: “They have grouped together cases which have nothing to do with each other."
Leading football economist Jose Maria Gay de Liebana told AS he feared an unintended consequence of the EC investigation would be an end to La Liga's much cherished tradition of socio-owned clubs.
“The clubs which are not SAD [limited companies] are considered non-profit bodies and pay 25 percent, while the rest pay 30 percent,” Gay de Liebana said. “If the EC forces them all to convert we will have got ourselves into a right mess.”
Many football clubs in other European countries receive direct and indirect supports from local and national governments. For example Premier League sides Manchester City and West Ham have both been invited to move into stadiums first built with public money for the 2002 Commonwealth Games and London 2012 Olympic Games respectively. Another investigation is also reportedly underway into government support to Dutch teams including PSV.