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Spanish Football Clubs To Repay Tens Of Millions In Illegal State Subsidies

Real Madrid, Barcelona and five other Spanish football clubs "must repay tens of millions of euros in illegal state subsidies, after the EU executive found they had received unfair financial aid from their government," according to Jennifer Rankin of the London GUARDIAN. Real Madrid, the world’s top-earning football club, will have to repay €18.4M ($20.5M), after the European commission "judged that an overpriced land deal with local authorities in the Spanish capital was unfairly tilted in the club’s favour." Separately, an investigation into five Dutch clubs, including PSV Eindhoven, "was closed after the commission said no EU rules had been broken." The European commission, which is the enforcer of EU law, said that "football was an economic activity and that it had a duty to ensure a level playing field between sports companies." EU Competition Commissioner Margrethe Vestager said, "Using taxpayers' money to finance professional football clubs can create unfair competition." The sums involved "are small change for the Spanish clubs." Real Madrid and Barcelona earned a combined €1.14B ($1.3B) in the '14-15 season (GUARDIAN, 7/4). SKY SPORTS reported EU state aid rules "apply to public interventions in the market to ensure they do not distort competition by selectively favouring one market participant over another." The first investigation "concerned tax privileges in favour of Real Madrid, Barcelona, Athletic Bilbao and Osasuna." In a second investigation, the Commission "examined a land transfer between Real Madrid and the City of Madrid." Finally, the Commission investigated guarantees given by the state-owned Valencia Institute of Finance for "loans granted to three Valencia football clubs (Valencia, Hercules and Elche)." At the time, those clubs were in "financial difficulties." The amounts to be paid back are: Real Madrid, €18.4M; Valencia, €20.4M ($22.8M); Hercules, €6.1M ($6.8M) and Elche, €3.7M ($4.1M). The fees to be paid by Barcelona, Athletic Bilbao and Osasuna "will be determined by Spanish tax authorities" (SKY SPORTS, 7/4).

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