In the case of Real Madrid, the refund amounts to 18.4 million euros for the cession of land between Real Madrid and Madrid City Council, while Valencia, Hercules and Elche must return 20.4 million, 6 , 1 million and 3.7 million for the guarantees granted by the Valencian Institute of Finance for loans granted to these three clubs of the Valencian Community.
In addition, Real Madrid, FC Barcelona, Athletic Bilbao and Osasuna must reimburse up to 5 million euros per club for having obtained tax privileges.
The decision comes after the European Commission opened several investigations in depth and came to the conclusion that several public aid measures granted by Spain to these seven professional football clubs “unfairly benefited them from other clubs”, which means a violation of Community rules on State aid from the European Union.
The first investigation concerned tax privileges in favor of Real Madrid, FC Barcelona, Athletic Bilbao and Atlético Osasuna, which were treated as non-profit entities, although in Spain professional football clubs are considered to be companies anonymous for tax purposes. In addition, the four clubs benefited from a lower tax rate (5%) for “more than 20 years, without an objective justification,” the EC stressed.
Spain has meanwhile adjusted its corporate tax legislation to end this discriminatory treatment as of January 2016, but to eliminate the undue advantages received in the past, clubs are now obliged to return unpaid taxes.
The EC considers that the amounts to be returned are limited (between 0 and 5 million per club), but the exact amounts that must be recovered by Spain will be determined by the Spanish authorities, said the EU executive.
In a second investigation, the Commission examined an assignment of land between Real Madrid and Madrid City Council. These investigations determined, with the help of an independent study, that the lands affected by the transaction were overvalued by 18.4 million euros. “This gave this club an unjustified advantage over other clubs that now must be returned,” the EC stressed.
Public funds must meet the standards of fair competition and, in this case, the subsidies investigated did not meet them “
Margrethe Vestager European Commissioner for Competition
Finally, the Commission investigated the guarantees granted by the Valencian Institute of Finance (IVF) for loans granted to Valencia, Hercules and Elche.
At that time, these clubs were experiencing financial difficulties and the public guarantee allowed them to obtain the loans in more favorable conditions. By not having paid adequate remuneration for the guarantees, these clubs benefited from an economic advantage over others, which have to be financed without the support of the State.
The state funding was not linked to a restructuring plan for the clubs with a view to their viability, and none of them applied compensatory measures to counter the distortion of competition caused by the aid, the EC said.
In this way, in order to restore fair conditions of competition with the non-subsidized clubs, Valencia, Hercules and Elche must now return the advantage received.
Community sources stressed that small clubs “will have to pay” and that it will depend on the Spanish Government how these payments are made and if a restructuring is carried out.
On the deadlines to return the amounts, the same sources indicated that in two months the authorities must indicate how the payments will be made, within a period of four months, for which the EC grants a total of six months to resolve The issue.
They specified that the illegal aid corresponds to “a limited amount”, from which the clubs benefited “in the past”, specifically in the last decade.
The European Commissioner for Competition, Margrethe Vestager, explained that “using taxpayers’ money to finance professional football clubs can distort competition.”
“Professional football is a commercial activity in which a lot of money is at stake. Public funds must meet the standards of fair competition and, in this case, the subsidies investigated did not comply, “he added