EU orders Spanish clubs to pay back millions
July 4, 2016
The football clubs received millions through tax breaks, loan guarantees and overvalued compensation deals, the Commission said on Monday.
Real Madrid would need to repay 18.4 million euros ($20.6 million) over a single land transfer, officials said. The city of Madrid allegedly awarded the club too much money in compensation after a transfer deal fell through in 1998.
The famous Spanish football club was just one out of seven teams targeted by three separate investigations. The investigators also ordered the return of state funds by Spanish champions Barcelona, Valencia, Athletic Bilbao, Atletico Osasuna, Hercules and Elche.
Some of the clubs, including Real and Barcelona, took advantage of Spanish tax laws that treated them as non-profit organizations. In this way, the managements were paying a 5-percent lower tax rate for over two decades. Spanish officials only changed the clubs' status in January 2016.
Other clubs obtained state guarantees that allowed them to take up favorable loans, giving them a leg up on the competitors.
Small fines for big names
The remaining Spanish clubs needed to compete without similar loans of tax breaks, putting them at a disadvantage, officials said.
In the EU, "public money must comply with fair competition rules," EU Competition Commissioner Margrethe Vestager said. "The subsidies we investigated in these cases did not."
Valencia would need to pay 20.4 million euros as compensation for the loans, officials said. However, Spanish officials would need to determine the exact amount of tax funds to be recovered.
Real Madrid and Barcelona are among the wealthiest clubs in the world, with annual turnover exceeding 500 million euros.
Also on Monday, the EU Commission cleared several Dutch football clubs of similar charges.
"In the Dutch cases, we found that the measures respected state aid rules and did not distort competition," Vestager said.
dj/kms (dpa, AFP, Reuters)