This is the second and final part of the ‘Real Madrid Saga’. Where the first part outlined the background of the case and
the role played by the Spanish national courts, the second part focuses on the
EU Commission’s recovery decision of 4 July 2016 and dissects the arguments advanced by the Commission to reach it. As
will be shown, the most important question the Commission had to answer was
whether the settlement agreement of 29 July 2011
between the Council of Madrid and Real Madrid constituted a selective economic advantage
for Real Madrid in the sense of Article 107(1) TFEU. Before
delving into that analysis, the blog will commence with the other pending
question, namely whether the Commission also scrutinized the legality of the operation Bernabeú-Opañel under EU State aid law. By way of
reminder, this operation consisted of Real Madrid receiving from the
municipality the land adjacent to the Bernabéu stadium, while transferring in
return €6.6 million, as well as plots of land in other areas of the city. More...
Out of all the State aid investigations of recent years involving
professional football clubs, the outcome of the Real Madrid case was probably the most eagerly awaited.
Few football clubs have such a global impact as this Spanish giant, and any
news item involving the club, whether positive or negative, is bound to make
the headlines everywhere around the globe. But for many Spaniards, this case
involves more than a simple measure by a public authority scrutinized by the
European Commission. For them, it exemplifies the questionable relationship
between the private and the public sector in a country sick of never-ending
Moreover, Spain is only starting to recover from its worst financial crisis in
decades, a crisis founded on real estate speculation, but whose effects were
mostly felt by ordinary citizens.
Given that the Real Madrid case
involves fluctuating values of land that are transferred from the municipality
to the club, and vice versa, it represents a type of operation that used to be
very common in the Spanish professional football sector, but has come under
critical scrutiny in recent years. More...
Editor’s note: This report compiles all relevant news, events and materials on
International and European Sports Law based on the daily coverage provided on
our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section
below, feel free to add links to important cases, documents and articles we
might have overlooked.
are looking for an International Sports Law Intern (with a particular interest
in the CAS)! More information can be found here.
The (terrible) State of the World
The fight against doping is still on
top of the agenda after the Russian doping scandal. The national anti-doping
organizations (NADOs) have reiterated their call for an in depth reform of the
World Anti-Doping Agency at a special summit in Bonn, Germany. These reforms are deemed urgent
and necessary to “restore confidence of clean athletes and those who value the
integrity of sport” and secure “the public’s desire for a fair and level
playing field”. The NADOs propose, amongst others things, to separate the
investigatory, testing and results management functions from sports
organizations, and to remove sports administrators from crucial anti-doping
executive functions. More...
On 28 September 2016, the Commission published the
non-confidential version of its negative Decision and recovery order regarding the preferential
corporate tax treatment of Real Madrid, Athletic Bilbao, Osasuna and FC
Barcelona. It is the second-to-last publication of the Commission’s Decisions
concerning State aid granted to professional football clubs, all announced on 4 July of this year.
Contrary to the other “State aid in football” cases, this Decision concerns
State aid and taxation, a very hot topic in
today’s State aid landscape. Obviously, this Decision will not have the same
impact as other prominent tax decisions, such as the ones concerning Starbucks and Apple.
This case dates back to November 2009, when a representative
of a number of investors specialised in the purchase of publicly listed shares,
and shareholders of a number of European football clubs drew the attention of
the Commission to a possible preferential corporate tax treatment of the four
mentioned Spanish clubs.More...
This is part two of the blog on the Willem
II and MVV State Aid decisions. Where
part one served as an introduction on the two cases, part two will analyze the
compatibility assessment made by the Commission in two decisions.
compatibility of the aid to MVV and Willem II (re-)assessed
Even though it was the Netherlands’
task to invoke possible grounds of compatibility and to demonstrate that the
conditions for such compatibility were met, the aid granted to both Willem II
and MVV was never notified. The Netherland’s failure to fulfill its notification
obligation, therefore, appears to be at odds with the Commission’s final
decision to declare the aid compatible with EU law. Yet, a closer look at the
Commission’s decision of 6 March 2013 to launch the formal investigation shows
that the Commission was giving the Netherlands a ‘second chance’ to invoke
grounds that would lead to a justification of the measures.More...
The European Commission’s decisions of 4 July 2016 to order the recovery of the State aid granted to seven
Spanish professional football clubs
were in a previous blog called historic. It was
the first time that professional football clubs have been ordered to repay aid
received from (local) public authorities. Less attention has been given to five
other decisions also made public that day, which cleared support measures for five football clubs in the Netherlands. The clubs in question were PSV Eindhoven, MVV Maastricht, NEC Nijmegen,
FC Den Bosch and Willem II.
Given the inherent political sensitivity of State aid recovery
decisions, it is logical that the “Spanish decisions” were covered more widely
than the “Dutch decisions”. Furthermore, clubs like Real Madrid and FC
Barcelona automatically get more media attention than FC Den Bosch or Willem
II. Yet, even though the “Dutch decisions” are of a lower profile, from an EU
State aid law perspective, they are not necessarily less interesting.
A few days before entering the quiet month of August, the Commission
published the non-confidential versions of its decisions concerning PSV Eindhoven, Willem II and MVV Maastricht (hereinafter:
“MVV”). The swiftness of these publications is somewhat surprising, since it often
takes at least three months to solve all the confidentiality issues.
Nonetheless, nobody will complain (especially not me) about this opportunity to
analyze in depth these new decisions. More...
Editor’s note: This
report compiles all relevant news, events and materials on International and
European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the
comments section below, feel free to add links to important cases, documents
and articles we have overlooked.
The McLaren Report on Russia’s State Doping System
It is difficult not to start this monthly
report without referring to the never-ending Russian doping investigation that
is shaking the sporting world. On 18 July, the independent investigation on
Sochi 2014 winter Olympics led by Prof. McLaren, a Canadian law professor, and requested
by the World Anti-Doping Agency (“WADA”), released its report. It confirmed
evidence of widespread, State-sponsored doping in Russian sports and called for
a full ban on the country from the next Rio Olympics. In response to the report,
the International Olympic Committee (“IOC”) vowed to take the “toughest sanctions available”. However, and despite the race against time in the
run-up to Rio 2016, the IOC delayed its decision for several days amid a WADA statement and several press articles
calling for a ban of Russia from Rio Olympics. Meanwhile, it did open an investigation
against Russia’s sports minister, Vitaly Mutko, the head official who allegedly supervised the overall doping cover up and explored all possible
legal actions against Russia. On 21 July, the Court of Arbitration for Sport (“CAS”) rejected the
appeal of the Russian Olympic Committee and 68
Russian athletes against the International Association of Athletics Federations
(“IAAF”) decisions to suspend All Russia Athletics Federation (ARAF) from IAAF
membership given the evidence of a state-sponsored doping system. As a
consequence, Russian track and field athletes were also banned from Rio 2016
Olympics. With the IAAF
welcoming this decision, one could think that nothing was standing in the way
of a full Olympic ban for all Russian athletes. While some Russian athletes announced
that they would appeal the CAS award to the Swiss Federal Court. Yelena
Isinbayeva, the banned pole vault champion, even took it a step further by
claiming that she would challenge the IAAF decision as far as the European Court of
Human Rights. Yet, it is very improbable that any of
these challenges be decided in time for the Rio Games.More...
Editor's note: Marine Montejo is a graduate from the College of
Europe in Bruges and is currently an intern at the ASSER International Sports
Part 2. EU competition law and sports funding
The first analysed impact of Brexit on
sport was the one regarding EU internal market rules and free movement.
However, all sport areas that are of interest to the European Union will be
impacted by the result of the future Brexit negotiations. This second part of
the blog will focus on EU competition law and the media sector as well as
direct funding opportunities keeping in mind that if the UK reaches for an EEA
type agreement competition law and state aid rules will remain applicable as
much as the funding programs. More...
It’s been a long wait, but they’re finally here!
On Monday, the European Commission released its decisions regarding State aid to seven Spanish professional football clubs (Real Madrid on two occasions) and five Dutch professional football clubs. The decisions mark the end of the formal
investigations, which were opened in 2013. The Commission decided as follows:
no State aid to PSV Eindhoven (1); compatible aid to the Dutch clubs FC Den
Bosch, MVV Maastricht, NEC Nijmegen and Willem II (2); and incompatible aid granted
to the Spanish football clubs Real Madrid, FC Barcelona, Valencia CF, Athletic
Bilbao, Atlético Osasuna, Elche and Hércules (3).
The recovery decisions in particular are truly historic.
The rules on State aid have existed since the foundation of the European
Economic Community in 1958, but it is the very first time
that professional football clubs have been ordered to repay aid received from
(local) public authorities.
In a way, these decisions complete a development set in motion with the Walrave
and Koch ruling of 1974, where
the CJEU held that professional sporting activity, and therefore also football,
is subject to EU law. The landmark Bosman case of 1995 proved to be of great significance as
regards free movement of (professional) athletes and the Meca-Medina case of 2006 settled that EU competition rules were
equally applicable to the regulatory activity of sport. The fact that the first
ever State aid recovery decision concerns major clubs like Real Madrid, FC
Barcelona and Valencia, give the decisions extra bite. Therefore, this blog
post will focus primarily on the negative/recovery decisions,
their consequences and the legal remedies available to the parties involved.
On 18 May 2016, the day the first part
of this blog was published, the Commission said in response
to the Hungarian MEP Péter Niedermüller’s question, that it
had “not specifically monitored the tax relief (…) but would consider doing so.
The Commission cannot prejudge the steps that it might take following such
monitoring. However, the Commission thanks (Niedermüller) for drawing its
attention to the report of Transparency International.”
With the actual implementation in Hungary appearing to
deviate from the original objectives and conditions of the aid scheme, as discussed
in part 1 of this blog, a possible monitoring exercise by the Commission of the
Hungarian tax benefit scheme seems appropriate. The question remains, however,
whether the Commission follows up on the intent of monitoring, or whether the
intent should be regarded as empty words. This second part of the blog will outline
the rules on reviewing and monitoring (existing) aid, both substantively and
procedurally. It will determine,
alia, whether the State aid rules impose an obligation upon the Commission
to act and, if so, in what way. More...