State Aid and Sport

Sport represents a phenomenal tool for cultural integration and for the strengthening of communities. States may intervene to ensure that these aspects are protected, by financing local facilities or multifunctional arenas. However, the intervention of the state might create a distortion on the market. A state may be willing to provide financial support to professional sport clubs, private associations, or private companies. However, when the state finances a private operator, it favours it against all its competitors. The rules on State Aid, which are applied within the EU and the European Economic Area, aim at ensuring that the intervention of the state does not distort competition to an excessive extent. These rules apply to any measure, regardless of the form it takes, or the body that administers it, through which a Member State selectively grants a private operator a treatment that is more favourable than what is offered on the market. Under Article 107 TFEU, Member States are therefore prohibited from granting loans, tax reliefs, guarantees that are not in line with market conditions.

The European Commission has declared admissible projects that were benefitting the public at large, such as the construction of multifunctional arenas (Uppsala, Jena, Erfurt, Belgium), capable of hosting different cultural events, or the improvement of facilities and the sport sector to a level that could ensure the participation of citizens in sport. The Commission also approved state measures granted to football clubs in France in order to host the 2016 Euro Championship, and measures that were supporting clubs in financial difficulties in the Netherlands. Although intended to provide support to a private operator, all these measures were considered to fall under the scope of the public role of the state, and justified as limited to what was their objective and the restriction they created.

On the other hand, the Commission has ordered a number of Spanish Clubs to pay back the aid received from local and national governments. These measures included a tax scheme granting F.C. Barcelona, Real Madrid C.F., Osasuna and Athletic Bilbao a preferential tax rate, a series of bank guarantees and loans granted to Valencia F.C., Elche and Hercules C.F., and a transfer of land between Real Madrid C.F. and the local municipality. All these measures were considered to breach State Aid rules, as they were giving an unjustified advantage to the recipients, and they were exceeding market conditions. When a State Aid is considered illegal, the Commission may require the recipient to pay back the sum received, or a sum comparable to the sum received, plus the interests accrued from the moment in which it has been granted.