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SBD Global/August 14, 2013/Finance

EC Can't Change Barcelona, Real Madrid Status, Probe Focused On State Aid

The European Commission "is looking into the issue of illegal state aid for Spanish clubs," according to Mark Baber of INSIDE WORLD FOOTBALL. But there is no truth in the reports that Real Madrid and Barcelona "would be forced by the EC to give up their privileged status as member-owned clubs and become plcs." In fact, the obligation under Spanish law for clubs to become Sociedades Anonimas Deportivas or Sports Limited Companies "is due to be abolished." EC investigation "was prompted by complaints from English and German clubs." The complainants, frustrated by the length of the investigation of EC's competition office (now lasting four years), "asked the European Ombudsman to step in and speed the process up." This has led to some reports that Barcelona and Real Madrid "could lose their member-owned status." If the European Commissioner had any real interest in putting an end to the member-only status of Barcelona and Real Madrid, "he would find a major obstacle in his path in the form of the European Union's Directive on Services in the Internal Market." This gives enterprises the freedom to adopt the legal structure for their entity that they see fit and only allows for restrictions to that freedom in domestic law if they comply with all of the following conditions: non-discrimination, necessity, and proportionality. Another obstacle to any such scheme "would be that there are member-owned clubs in many other European countries" -- for example, there are more in Germany and Sweden than in Spain (INSIDE WORLD FOOTBALL, 8/13).
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