Real Madrid Under Investigation By European Commission For Illegal State Aid
Real Madrid is the subject of a European Commission investigation following allegations it "received illegal state aid," according to Sam Wallace of the London INDEPENDENT. It is alleged that Real and Madrid City Council agreed to "a favourable deal for land around the Bernabeu stadium, which is to be redeveloped into a lucrative new shopping mall and hotel complex." The council "hugely overestimated its debt to the football club," so it could "give Real the prime city-centre land they require for their new development." Real, like all leading European clubs, is subject to UEFA's Financial Fair Play regulations, "which forbid any form of state aid." Real said it had not received "any special privileges in its real estate activities since it has always been subject to the then current legislation and has received the same treatment as any other entity" (INDEPENDENT, 4/3). EC competition office spokesperson Antoine Colombani said: "The Commission is indeed examining the situation of Real Madrid as it does with similar allegations brought to its attention." Colombani said the investigation is at a "preliminary" stage, but it has been open since December '11 (INDEPENDENT, 4/4).
TURN BACK THE CLOCK: BLOOMBERG's White & Duff reported Real President Florentino Perez said that the club agreed with the city hall in '11 to "exchange land in the suburb of Las Tablas for a public area in the city's tree-lined main avenue, with the aim of building a shopping center next to its stadium" (BLOOMBERG, 4/3). REUTERS' Mark Elkington reported Real said the valuation of the land in '11, "which found its value to have increased 54-fold," was carried out by Madrid City Council, and was therefore "independent." Real said: "The valuation of all the properties have increased due to the time lapse between the different valuation that in some cases exceeds 10 years, the degree of evolution of the urban development process and the evolution of property prices" (REUTERS, 4/3).
BIGGER, BETTER: In a separate piece in the INDEPENDENT, Wallace reported Real Madrid foresees a future where its stadium is "even bigger, better and more lucrative than ever before." The story of how Real came to be investigated by the EC after allegations of state aid "goes to the heart of the club's ambitions." The new shopping mall and hotel complex, as well as the naming rights associated with the roof, "are part of the plan" to keep Real, with an annual revenue of £434M ($657M), "as the highest-earning club in the world" (INDEPENDENT, 4/3).