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EU orders Spanish football clubs to repay state aid

Xinhua, July 4, 2016 Adjust font size:

The competition regulators of the European Union (EU) ordered seven Spanish professional football clubs, including Barcelona and Real Madrid, to pay back millions of euros "illegal" state aid on Monday.

After in-depth investigations lasting two-and-a-half years, the EU's executive body European Commission concluded that the Spanish government supported seven professional football clubs with tax breaks and overvalued land transfers, giving those clubs an unfair advantage over other clubs in breach of EU state aid rules.

"Using tax payers' money to finance professional football clubs can create unfair competition," EU Competition Commissioner Margrethe Vestager commented in a statement, "Professional football is a commercial activity with significant money involved and public money must comply with fair competition rules."

According to European anti-trust rules, governments are not granted to provide state aid to commercial enterprises if it distorts market competition.

As a result, the EU ordered Spanish to recover unpaid tax of up to 5 million euros (5.55 million U.S. dollars) from Barcelona, Real Madrid, Athletic Bilbao and Atletico Osasuna, while Real Madrid has to repay 18.4 million euros for an overpriced land transfer to the City of Madrid.

The Commission also said that Valencia, Hercules and Elche were given access to overly favorable loan terms when they were in financial difficulties. In order to restore the level playing field with non-subsidized clubs, Valencia has to repay 20.4 million euros, Hercules 6.1 million euros and Elche 3.7 million euros.

Football clubs conduct several activities such as marketing, merchandising, TV broadcasting and transfer of players. In many cases, professional football clubs have significant turnover.

EU state aid rules ensure that public funding does not distort competition between clubs by protecting the level playing field for the majority of professional clubs who have to operate without subsidies, the Commission said in a statement. (1 euro = 1.11 U.S. dollars) Endit