EU opens investigation into Spanish public funding of football clubs
The European Commission has targeted seven major Spanish football clubs including Real Madrid and FC Barcelona over possible illegal state funding.
The Commission has opened three ‘in-depth’ investigations in order to verify that certain existing public support measures in Spanish football are not in breach with the EU state aid rules.
"Professional football clubs should finance their running costs and investments with sound financial management rather than at the expense of the taxpayer. Member States and public authorities must comply with EU rules on state aid in this sector as in all economic sectors," said Commission vice president in charge of competition policy, Joaquín Almunia in a press release from the EU.
One of the investigations will be looking into the so-called ‘socio’-system. Four clubs in the Spanish La Liga are owed by ‘socios’, meaning that a club is member-owned, and the EU probe will determine the legality of this owning system. According to the Commission, the socios could be benefitting from favourable tax arrangements.
Another investigation will examine a land transfer between the City of Madrid and the club Real Madrid CF, and the third investigation concerns three regional governments’ loans and bank guarantees to their financially troubled clubs.
“All these measures were financed through state resources and provide advantages to specific clubs that carry out economic activities in the EU internal market. The measures are therefore likely to affect competition and trade between Member States,” the EU press release says.
According to Reuters, Spanish sports minister Jose Manuel Garcia Margallo has denied the breach of rules by any of the involved clubs and says that the Spanish government will stand behind the clubs.
“The government will fight to the last to defend Spanish clubs because they are also part of the Spanish brand," he said.
Both the clubs and the Spanish government will have one month to answer the accusations from the European Commission.
SOURCES:European Commission Press release: europa.eu/rapid/press-release_IP-13-1287_en.htm
Reuters: www.reuters.com/article/2013/12/16/us-soccer-spain-eu-probe-idUSBRE9BF16U20131216