Editor’s note: Rhys Lenarduzzi is a final semester Bachelor of Law (LL.B) and Bachelor of Philosophy (B.Phil.) student, at the University of Notre Dame, Sydney, Australia. As a former professional athlete, then international sports agent and consultant, Rhys is interested in international sports law, policy and ethics. He is currently undertaking an internship at the T.M.C. Asser Institute with a focus on Transnational Sports Law.

In 2019, training compensation and solidarity contributions based on FIFA’s Regulations on the Status and Transfer of Players (RSTP) amounted to US$ 75,5 million. This transfer of wealth from the clubs in the core of the football hierarchy to the clubs where the professional players originated is a peculiar arrangement unknown in other global industries. Beyond briefly pointing out or reminding the reader of how these systems work and the history behind them, this blog series aims to revisit the justifications for FIFA-imposed training compensation and the solidarity mechanism, assess their efficacy and effects through a case study of their operation in the African context, and finally analyse the potential impact of upcoming reforms of the FIFA RSTP in this context.

First, it is important to go back to the roots of this, arguably, strange practice. The current transfer system and the legal mechanisms constituting it were largely the result of a complex negotiation between European football’s main stakeholders and the European Commission dating back to 2001. The conclusion of these negotiations led to a new regulatory system enshrined in Article 20 and Annex 4 of the RSTP in the case of training compensation, and at Article 21 and Annex 5 in the case of the solidarity mechanism. Before paying some attention to the historical influences and how we arrived at these changes, as well as the justifications from the relevant bodies for their existence, let us briefly recall what training compensation and the solidarity mechanisms actually are.

1.     FIFA’s training compensation and solidarity mechanism: A very short introduction

Training compensation is the obligation of an acquiring/buying/signing/new club to compensate the training clubs of a player. A training club is considered to be the clubs of the player between the ages of 12 and 21, though the obligation to compensate continues if either of the following two instances take place, up until the season of a player’s 23^rd birthday:  i) “[A] player is registered for the first time as a professional” or,  ii) “a professional is transferred between clubs of two different associations…”. The obligation does not arise if a former club terminates a player’s contract without just cause, when a professional reacquires amateur status in moving clubs, or when a player transfers to a category 4 club. Regarding the categories, this is important because the amounts owed to a training club hinge on where clubs fall within four categories (For more on the four categories see HERE).

There are some regulatory differences between the EU/EEA and the rest of the football world. A significant distinction is that without sufficient justification that it is worthy of compensation, a former club will not be owed by a “new club”[1] if they have not offered a contract of equivalent value to the player in question.[2]

The Solidarity mechanism provisions stipulate that when a player moves to a new club, mid contract, for a fee agreed between the new club and former club, then 5% of that fee is designated as a solidarity contribution, and each of the player’s training clubs will receive a portion. The apportionment varies depending on what age the player was registered with the training club (further information on apportionment can be found HERE). This obligation arises when a player is transferred definitively or on loan, between clubs from different associations, as well as when a transfer takes place within the same association, but a training club of the player is affiliated to another association.

For both training compensation and the solidarity mechanism, the regulations provide that the national association will instead receive the money when the club owed “has in the meantime ceased to participate in organised football and/ or no longer exists”.[3] In cases as such, the compensation is to be used for youth football development.

Disputes can arise when the new club does not pay on time or at all, or if there is a disagreement on the amount owed, as well as when a new club attempts to make the case that a player has already terminated his training period prior to age of 21. Given the above explanation of the systems is brief, further detail may be found within the relevant articles and annexes (see HERE for the full regulations).

2.     A brief history: From the ‘retain and transfer system’ to the FIFA RSTP 2001

Much of the current framework is the product of various events surrounding the birth of the regulations in 2001, though the ideas and concepts it captures go way back beyond this time. The English Football League’s registration system that would go on to be touted as the ‘retain and transfer system’ dates back to at least 1893.[4] Both this system and the American Baseball ‘reserve rule’ system are often mentioned in the same breath. As Sloane pointed out in 1969: “The justification for the reserve rule and the retain and transfer system lies in their alleged function in bringing about a more or less equal distribution of playing talent between clubs, whilst, their advocates argue, free competition would lead to a concentration of 'star' players into a few rich clubs.”[5]  Both systems were the target of an array of challenges over the years, though up until ‘free agency’[6] in the case of American Baseball (much earlier) and Bosman[7] in football, each system remained largely the same in existence and justification.[8] To further emphasise that the issues recognised, and in turn the ideas and justifications pertinent to the current system are hardly new, the Chester Report of 1969 on the situation regarding employment and transfers in football in England had striking similarities to much of what was raised within the European-level negotiations that lead to the changes in 2001.[9]

With the momentous Bosman case in 1995, the previously commonplace practice of an out of contract player being retained and unable to transfer (regardless of that player’s preferences) was found contrary to EU law. Importantly for the subject of this blog, the court also recognised that “encouraging the recruitment and training of young players must be accepted as legitimate”[10] aim, on the basis of which the free movement rights of players could in principle be restricted. Thus, leaving an opening for a regulatory system that would support the “recruitment and training of young players”[11] and restrict free movement in a proportionate way.

In 1998, the European Commission decided to open an investigation against FIFA based on competition law concerns linked to its then applicable RSTP.  This decision brought FIFA, UEFA and FIFPro to the European Commission’s negotiating table to hammer out a compromise that would satisfy their divergent interests and be compatible with the EU’s antitrust rules. The regulations as they now stand, aside from some minor amendments, reflect the outcome of those negotiations. The final press release of the European Commission concluded that FIFA’s new regulations would have to reflect a set of principles in order to be deemed compatible with EU competition law. In particular it accepted that:

• in the case of players aged under 23, a system of training compensation should be in place to encourage and reward the training effort of clubs, in particular small clubs;
• creation of solidarity mechanisms that would redistribute a significant proportion of income to clubs involved in the training and education of a player, including amateur clubs; 

These are in fact quite faithfully transposed in the FIFA RSTP provisions discussed above. Since then, the Bernard[12] ruling of the CJEU further clarified that the societal significance of sport, rendered the incentivisation of training legitimate. In its ruling, the court specified that in order to comply with EU law, a training compensation system ‘must be actually capable of attaining that objective and be proportionate to it, taking due account of the costs borne by the clubs in training both future professional players and those who will never play professionally’.^[13] This remains the main benchmark that any FIFA training compensation system must meet in order to comply with EU law.

As we have shown in this section, the shape of the current FIFA training compensation system and solidarity mechanism are very much a direct result of the EU’s interventionism in the regulation of football in the aftermath of the Bosman case. In doing so, the EU institutions also recognised that the idea of redistributing funds to compensate the costs incurred by the training club in instructing a player is a legitimate one.

3.     Justifying redistribution: Sharing the costs of training

Why do football institutions want this system in place and how was it justified? As was alluded to above, these ideas are not new ideas and are rooted in tradition.[14] Football and its intricacies have been deemed in need of protection for a long time, at least from within. More importantly for this blog, there is a desire for wealth to be redistributed in the form of compensation to the training clubs, to manufacture solidarity between the different levels of football and to incentivise goals such as training, education and development. This justification for FIFA’s redistributive systems is largely connected to the recognition that sport is important for the social fabric, and that incentivising development and training clubs goes beyond football and has societal benefits.

These objectives are reflected in the compromise agreed between FIFA and the EC in 2001. The latter’s press release emphasised that training compensation was “to encourage and reward the training effort of clubs, in particular small clubs“. Similarly, FIFA stated in Circular no. 769; “This system is designed to encourage more and better training of young football players, and to create solidarity among clubs, by awarding financial compensation to clubs which have invested in training young players.” Thus, it is clear that both the football authorities and the EU institutions recognise that the core aim of the FIFA’s training compensation and (though less obviously) its solidarity mechanism are to support the recruitment and training of young professional footballers. In fact, the CJEU’s advocate general in Bernard later recognised that training compensation rules “ensure that clubs are not discouraged from recruitment and training by the prospect of seeing their investment in training applied to the benefit of some other club, with no compensation for themselves”.[15] She went on to emphasise that “there is a broad public consensus that the training and recruitment of young players should be encouraged rather than discouraged”.[16]

At the heart of these rationalisations lies the core belief that failing to compensate the club that has helped a young player grow into a professional player is unfair and would discourage the club’s future effort to train players. Whether a training compensation system is necessary to attain such an objective is, however, far from evident. As was pointed out by advocate general Lenz in the Bosman case, such objectives could as well “be attained by a system of redistribution of a proportion of income, without the players' right to freedom of movement having to be restricted for that purpose“.[17] Nevertheless, the idea of redistribution between clubs remains the fundamental policy objective that underpins both FIFA’s training compensation system and solidarity mechanism.

Concluding remarks and subsequent blogs

This blog has highlighted that FIFA’s training compensation system and solidarity mechanism were introduced, after lengthy discussions with the European Commission and relevant stakeholders, in order to create a solidarity and redistributive relationship between the club where a player was trained and the club were a player pursues his professional career. The core justification behind them is that the training clubs provide an important educational service and that their work would be discouraged if they would not be enjoying some economic returns on their investment (in time and resources) to train players that go on to play professionally for a bigger/richer club.

While this objective is certainly respectable, there are, however, questions that remain regarding the adequacy and necessity of these systems to effectively redistribute funds between clubs. First, one should always keep in mind that training compensations are restricting the players’ freedom to move between clubs. Second, as we will see in the coming blog focusing on African players and clubs, it is questionable whether the current FIFA rules are in practice achieving their main redistributive function. Third, if these mechanisms are necessary to encourage training, it is as well remarkable that they are not also introduced in the context of women professional football, as will be discussed in our third blog. Finally, my last blog will assess how the coming changes to FIFA’s RSTP will affect the structure and operation of both the training compensation system and the solidarity mechanism.

[1] “New club” is the language used in the RSTP.

[2] “[I]n writing via registered post at least 60 days before the expiry of his current contract” per RSTP Annex 4 (6) ‘Special provisions for the EU/EEA’.

[3] RSTP - Annex 4 (3) 3; Annex 5 (2) 3.

[4] Sloane, P. J. (1969), The labour market in professional football, British Journal of Industrial Relations, 7, 181-199.

[5] Ibid.

[6] Established from the decision in Curt Flood v. Bowie Kuhn, et al. 407 U.S. 258.

[7] Case C-415/93 Union Royale Belge des Socie´te´s de Football Association and others v. Bosman and others, ECLI: EU: C:1995:463

[8] Gerrard, B. (2002), The Muscle drain, Coubertobin-Type Taxes and the International Transfer System in Association Football,  European Sport Management Quarterly at 50 – “High Court in England ruled in 1963 that the retain-and transfer system was a restraint of trade. This led to a progressive relaxation of the transfer system with players being given more freedom to move between teams at the end of their contracts while transfer fees remained payable”.

[9] Per Sloane (1969) – “Contracts should have a terminable date and be renewable only on the consent of both parties… The committee did, however, suggest that a special levy should be imposed by the Football League on transfer fees, in addition to the present arrangement and graded according to the size of fee at a progressive rate. This levy could be returned to clubs for the purpose of ground improvements and would thereby tend to offset the tax advantage which clubs derive by signing players, since such payments, unlike the cost of ground improvements, are tax allowable.

[10] Bosman, para 106.

[11] Ibid.

[12] Case C-325/08 Olympique Lyonnais SASP v Olivier Bernard and Newcastle UFC, ECLI: EU: C:2010:143

[13] Ibid para 45.

[14] Pearson, G. Sporting Justifications under EU Free Movement and Competition Law: The Case of the Football ‘Transfer System’, European Law Journal, Vol. 21, No. 2, (March 2015) pp. 222.

[15] Opinion of Advocate General Sharpston in CJEU case C-325/08 Olympique Lyonnais SASP v Olivier Bernard and Newcastle UFC, para 46.

[16] Ibid para 47.

[17] Opinion of Advocate General Lenz CJEU case C-415/93 Union Royale Belge des Socie´te´s de Football Association and others v. Bosman and others, para 239.

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, inter alia, whether the State aid rules impose an obligation upon the Commission to act and, if so, in what way.

In order to correctly decipher the potential consequences of Hungary’s behavior under EU State aid law, it is necessary to make a distinction between the part of the aid scheme declared compatible in the tax benefit scheme in the Hungarian sport sector decision, i.e. the donations for the sport infrastructures used by the professional sport organizations, and the donations used to cover personnel costs. Due to the fact that these two types of donation destinations were allowed based on two different exception procedures (the general exception found in Article 107(3)c) TFEU for the aid to sport infrastructure, and the General Block Exemption Regulation or the de minimis aid Regulation for the aid to cover personnel costs), the rules on reviewing and monitoring aid differ slightly. This blog will only focus on the review and monitoring rules of the tax benefit scheme in the Hungarian sport sector decision. 

Reviewing and monitoring State aid schemes – a Commission obligation?

A decision to approve an aid scheme (also known as a “positive decision” under Article 9(3) of the Procedural Regulation 2015/1589), should not fully release the Commission from any obligations regarding ex post control of that scheme. As can be read from Article 108(1) TFEU, “(t)he Commission shall, in cooperation with Member States, keep under constant review all systems of aid existing in those States. It shall propose to the latter any appropriate measure required by the progressive development or by the functioning of the internal market.”

The Commission’s responsibilities appear straightforward. After declaring the Hungarian tax benefit scheme compatible with EU law, it is obliged to review the implementation and usage of the aid by the Member State and the beneficiary, or beneficiaries. The CJEU settled as far back as 1974 that the Commission’s obligation to review existing aid is binding and that the Member States in question the obligation to cooperate with the Commission.[1] In fact, as Advocate General Lenz stated in his opinion in the Namur-Les Assurances du Crédit case, the Commission’s task to constantly review aid is even more necessary for aid schemes, like the Hungarian tax benefit scheme, as compared to individually authorized aid measures.[2] Pursuant to Article 108(1) TFEU and Article 21 of the Procedural Regulation, where the Commission considers that an existing aid scheme is not, or is no longer, compatible with the internal market instead of immediately launching a formal investigation, the Commission must issue a recommendation to the Member State concerned. The recommendation may propose, in particular:

1. Substantive amendment of the aid scheme;
2. Introduction of procedural requirements; or
3. Abolition of the aid scheme.[3]

It is important to note that in accordance with Article 288 TFEU, fifth sentence, recommendations have no binding force. Therefore, the proposed measure itself is not binding for the Member State. Only where the Member State accepts the proposed measure, shall it be bound by its acceptance to implement the appropriate measure.[4] However, if the Member State refuses to accept and implement the recommendations, the Commission could launch a formal investigation in accordance with Article 108(2).[5] Article 108 (1) TFEU and Article 21 of the Procedural Regulation also require the Member States to cooperate with the Commission for the purpose of reviewing aid schemes. This cooperation is further specified in Article 26 of the Procedural Regulation, which obliges Member States to submit annual reports on existing aid schemes to the Commission.[6] The reports allow the Commission to monitor the compliance with the positive decision by the Member State. As was already discussed in part 1 of this blog, Hungary too is required to submit a yearly monitoring report containing information on the total aid amount allocated, the sport infrastructure projects funded, their beneficiaries, etc.[7] A failure by Hungary to submit an annual report, would allow the Commission to propose an appropriate measure as listed above.[8] Whether Hungary actually submits annual reports to the Commission is currently unclear.      

Monitoring the tax benefit scheme in the Hungarian sport sector – not as straightforward as it appears

The Commission has repeatedly expressed its ambition for more and better monitoring of State aid schemes. This ambition follows from its primary objective to increase Commission enforcement focus on cases with the biggest impact on the internal market, as can be read from, inter alia, the State Aid Modernisation (SAM) Communication of 2012. Better targeted State aid control means an “increased responsibility of Member States in designing and implementing aid measures” for cases of a more local nature and with little effect on trade, as well as “enhanced ex post monitoring by the Commission to ensure adequate compliance” with the State aid rules.[9] In 2006, the Commission introduced a regular, ex post, monitoring exercise of existing aid schemes. The monitoring exercise gradually increased from 20 different schemes in 2006, to 75 schemes in 2014, covering all Member States, all main types of aid approved as well as block-exempted schemes.[10] The monitoring exercises conducted in 2014 led to the openings of four formal investigations.[11] The willingness to increase monitoring seems logical when taking into account EU case law, which imposes, in practice, an obligation for the Commission to review previously approved aid schemes. Yet, only a very small amount of existing aid schemes is monitored, nor is it realistically possible to do monitor all the schemes. As can be read in the recently published DG Competition Management Plan 2016, over the last 10 years the Commission declared over 3000 aid schemes or measures compatible with EU law after a the preliminary phase (“decisions not to raise objections”) alone.[12] This amount does not take into account positive decisions or block exempted aid schemes and measures, all of which should, strictly speaking, be monitored. Exact numbers on the amount of existing aid schemes currently running throughout the EU are not available, but one could safely say that the overwhelming majority of existing aid schemes are not monitored. Unless the State aid department of the Commission dramatically increases its resources, both in terms of finances and staff, monitoring all existing State aid schemes will remain utopic.  

The “specificity” of State aid to the professional sport sector and why extra monitoring in the sector should be considered

The Hungarian tax benefit scheme is not functioning in accordance with its original objectives: many of the sport infrastructure projects funded with public money do not seem strictly necessary and selected professional football clubs benefitted disproportionately. Under these circumstances, a monitoring exercise conducted by the Commission could be needed. If a monitoring exercise confirms disproportionate spreading of subsidies, a consequent set of appropriate measures taken by Hungary could bring the scheme in line with its original objectives. However, given that the majority of schemes are not monitored, there is a very big chance that the Hungarian tax benefit scheme is not one of the “lucky ones” selected. It is also unclear whether the Commission’s answer to the Parliamentary question of 18 May in any way increases that probability.  

The State aid complaint procedure as an alternative

Another way to force the Commission to look into the aid scheme, not yet discussed above, is through a State aid complaint procedure. Although the tax benefit scheme was already approved by the Commission in 2011, this should not rule out the possibility of an interested party submitting a complaint to inform the Commission of any alleged unlawful aid.[13] Pursuant to Article 12(1), the Commission is obliged to examine without undue delay a complaint by an interested party, thereby automatically triggering the preliminary State aid investigation of Article 108(3) TFEU. Although ‘unlawful aid’ refers to new aid put into effect in contravention of Article 108(3) TFEU[14], and not existing aid, such as aid schemes authorized by the Commission[15], ‘new aid’ also refers to existing aid that has been altered by the Member State.[16] In accordance with the Commission’s State Aid Manual of Procedures, for an aid scheme to be altered, the complainant would need to demonstrate that a change has taken place that affects “the evaluation of the compatibility of the aid with the common market”.[17] In addition to this, the complaint would need to include, inter alia, information on the (functioning of) the scheme, the amount of aid granted, and why the scheme is no longer compatible under Article 107(3).[18] A further highly important criterion is for the interested party to demonstrate to the Commission that the complainant is directly affected in its “competitive position” by the aid scheme.[19] This criterion empowers the Commission to separate formal complaints from the complaints that are “not motivated by genuine competition concerns”, thereby reducing considerably its workload of having to launch a (preliminary) investigation based on every single complaint it receives.[20] Complaints submitted by complainants, who the Commission does not consider to be interested parties, will be regarded as “general market information”[21] and do not oblige the Commission to investigate.  

The “specificity” of State aid to professional sport – no complaints by other clubs

The “interested party” criterion was only added after the reform of the Procedural Regulation in 2013[22], and has affected the professional sport sector considerably. The two years prior saw great activity by the Commission in the sector, including the opening of four formal investigations into alleged State aid to professional football clubs like Real Madrid and Valencia CF.[23] The investigations into alleged aid granted to Real Madrid and Valencia CF were not launched after the submission of a complaint by an interested party, but after “the attention of the Commission was drawn by press reports and information sent by citizens in 2012-2013”.[24] The end of formal investigations into alleged aid granted to professional sport clubs coincided with the introduction of the “interested party” criterion: since citizens are not considered interested parties, the Commission does not have an obligation anymore to investigate complaints, or any form of information, submitted by them. At this moment, only complaints submitted by interested parties, i.e. a party directly affected in its competitive position, have the potential of triggering fresh State aid investigations in the professional sport sector.[25]

Which persons or undertakings fulfill the “interested party” criterion? The answer to this question requires a case by case analysis and depends on the aid measure or scheme chosen by the public authorities.[26] Nonetheless, where aid is granted to a professional sport club, the clearest example of an interested party would be another professional sport club. Getting professional sport clubs to submit State aid complaints is, however, easier said than done. Contrary to other economic sectors where competitors would complain if they feel that they are directly affected in their competitive position, no professional sport club has ever submitted a State aid complaint, nor is it likely to happen anytime soon. As is confirmed by Dutch professional football club FC Groningen’s director Hans Nijland in an article published on 18 May by the Dutch magazine De Groene Amterdammer , “if (another football club) manages to sign a deal with its municipality, I will not complain. In fact, I would say congratulations, well done”.[27] The same mentality probably prevails in Hungary, making it very unlikely that a Hungarian professional football club, or any other professional sport club, decides to submit a complaint alleging unlawful aid to, say, Puskás Akadémia FC due to the disproportionate distribution of subsidies under the tax benefit scheme.  

Why extra monitoring in the sport sector should be considered

The advantages of EU State aid control include efficient government spending in the economy as well as better accountability and transparency of aid measures.[28] Nonetheless, with the chances of the Commission monitoring existing aid in professional sport, such as the Hungarian tax benefit scheme, being very slim, and given the unlikeliness of a submission of a complaint by a competing professional sport club, how useful are the State aid rules to achieve better accountability and transparency in (professional) sport? Local governments will continue spending large amounts of public money on projects that distort competition and are contrary to the general public interest, without a meaningful risk of being called back. Furthermore, as long as the Commission does not prioritize State aid enforcement to the professional sport sector, similar to how it enforces the State aid rules regarding fiscal aid to multinationals[29], it is also unlikely that it will investigate ex officio.

From the “efficient use of Commission resources” viewpoint, it is, in a way, understandable that the Commission has decided not to prioritize State aid to professional sport. They are, after all, not the most distortive State aid cases. However, this lack of prioritization is not being compensated with the submission of complaints by interested parties, meaning that public authorities have less to fear from State aid control in the professional sport factor, as compared to other market sectors.

To prevent a complete carte blanche for the public authorities, I would argue that the Commission should impose upon itself stricter conditions as regards monitoring State aid measures and scheme to the benefit of professional sport clubs. The current monitoring system, where the chance of being monitored is smaller than not being monitored, is inefficient in a sector where competitors do not serve as watchdogs. Only by radically increasing the monitoring chance in the professional sport sector can better accountability and transparency of aid measures be achieved.

[1] Case 173/73, Italy v Commission, [1974] ECLI:EU:C:1974:71, para 24.

[2] Opinion of Advocate General Lenz in Case C-44/93, Namur-Les Assurances du Crédit SA v Office Nationale du Ducroire , [1994] ECLI:EU:C:1994:262, para 86.

[3] Procedural Regulation 2015/1589, Article 22. Contrary to the decision options of formal investigations, a decision to order a recovery of the aid from the beneficiary or beneficiaries, as listed in Procedural Regulation, Articles 9(5) and 16, is not an option for the “review procedure”.

[4] Ibid., Article 23(1).

[5] The Enterprise Capital Funds (ECF) decision is a good example of a formal investigation based on ex post review and monitoring. Following a “selected” monitoring exercise in 2011, it was discovered that the UK had failed to take the appropriate measures to bring an aid scheme in line with the Commission Guidelines on Risk Capital , even though it had promised to do so. This led to the Commission opening a formal investigation in November 2011.

[6] Pursuant to Procedural Regulation, Article 26(1), the obligation to submit annual reports applies to decisions “to which no specific reporting obligations have been imposed in a conditional decision”. Under a conditional decision, the Commission attaches to a decision conditions subject to which aid may be considered compatible with the internal market. The tax benefit scheme in the Hungarian sport sector decision has no specific conditions attached to it, apart from the usual obligation for the Member State concerned to submit an annual report to the Commission.

[7] Commission Decision of 9 November 2011, SA.31722 – Hungary - Supporting the Hungarian sport sector via tax benefit scheme , para 57.

[8] Procedural Regulation 2015/1589, Article 26(2).

[9] EU State Aid Modernisation Communication of 8 May 2012 , para 19.

[10] Commission Staff Working Document of 4 June 2015, “ Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on Competition Policy 2014 ”, page 10.

[11] Ibid. One of the investigations involved the Enterprise Capital Funds scheme – Supra n5.

[12] DG Competition document of 18 March 2016 REF. Ares(2016)1370536 “ Management Plan 2016 ”, page 15.

[13] Procedural Regulation 2015/1589, Article 24(2).

[14] Ibid., Article 1(f).

[15] Ibid., Article 1(b)(ii).

[16] Ibid., Article 1(c).

[17] Internal DG Competition working documents on procedures for the application of Articles 107 and 108 TFEU of 10 July 2013, State Aid Manual of Procedures , Section 5, para 1.2.1.

[18] A complaint that does not comply with the compulsory complaint form, or if the complainant does not provide sufficient grounds to show the existence of unlawful aid can be withdrawn by the Commission. See Procedural Regulation 2015/1589, Article 24(2).

[19] Form for the Submission of Complaints Concerning Alleged Unlawful State Aid or Misuse of Aid , point 3.

[20] Draft Report by the European Parliament of 19 March 2013 on the proposal for a Council Regulation amending Regulation (EC) No 659/1999 laying down detailed rules for the application of Article 93 of the EC Treaty (COM (2012) 725 final) , page 17.

[21] Supra., No 19.

[22] Council Regulation (EU) No 734/2013 of 22 July 20-13 amending Regulation (EC) No 659/1999 laying down detailed rules for the application of Article 93 of the EC Treaty [2013] OJ L204/14.

[23] An explanation on why the public financing of sports infrastructure and professional sports clubs only started to attract State aid scrutiny in recent years can be read in: Ben Van Rompuy and Oskar van Maren, “EU Control of State Aid to Professional Sport: Why Now?” In: “The Legacy of Bosman. Revisiting the relationship between EU law and sport”, T.M.C. Asser Press, 2016.

[24] See, for example Commission decision of 18 December 2013, SA.36387 Spain – Alleged aid in favour of three Valencia football clubs, para 3. The other formal investigations to professional football clubs (i.e. Real Madrid , five Dutch football clubs and four Spanish football clubs ), were also launched after the Commission received information through citizens and/or the press.

[25] Or the Commission decides to open an investigation ex officio pursuant to Procedural Regulation 2015/1589, Article 12(1). However, this is very unlikely, given the lack of priority given by the Commission to sport.

[26] For example, in the case of the Hungarian tax benefit scheme, clubs or associations not active in the sport sector (e.g. theatre clubs, art clubs, etc.), could potentially argue that they have been placed in a disadvantageous position, since they cannot receive donations under the scheme. An aid measure provided in the form of advantageous land transactions, such as the Real Madrid case, could directly affect any undertaking interested in purchasing the same land, or any other plot of land against other market conditions.

[27] Hester den Boer and Bram Logger, “ Een spits van belastinggeld; Onderzoek – Lokale overheden blijven profvoetbal massaal steunen ”, De Groene Amsterdammer, 18 May 2016, page 5.

[28] See for example Oskar van Maren, “EU State Aid Law and Professional Football: A threat or a Blessing?” , European State Aid Law Quarterly, Volume 15 1/2016, pages 31-46.

[29] High profile formal State aid investigations into alleged aid granted by means of selective tax agreements between Member State governments and multinationals like Starbucks, Fiat, Amazon or Apple, have launched in the last few years.