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Volume 6 No. 212

International Football

Real Madrid and Barcelona "could soon be forced by the European Commission to relinquish their privileged status as member-owned clubs" and are likely to become Public Limited Companies, "losing one of the key advantages behind their dominance of Spanish football and success in European competition," according to Sam Wallace of the London INDEPENDENT. The European Commission competition office's four-year investigation into "allegations of illegal state aid against both Madrid and Barcelona, linked to their status as membership clubs, is at tipping point." It is the second EC investigation into Madrid, which is "also under scrutiny for a land deal with Madrid city council dating back to 1996 which critics believe constitutes illegal state aid." Both investigations are "coming to a head against the backdrop of a summer in which Madrid prepare to break the transfer world record again," with an £80M-plus ($124M) bid for EPL Tottenham's Gareth Bale. In '90, the Spanish government ruled that "all clubs apart from Madrid, Barcelona, Athletic Bilbao and Osasuna were obliged to become limited companies." The issue of Madrid and Barcelona's privileged status has "proved a major problem for the EC competition office, which has a number of Spanish nationals in prominent positions." Having received the initial complaint in Nov. '09, it has "delayed reaching a decision on the issue despite a regulation one-year deadline." Now the European Ombudsman has "intervened in the matter." The Ombudsman is an "independent adjudicator with power over decisions taken by European institutions" (INDEPENDENT, 8/7).

'UNFAIR EDGE': In a separate piece, Wallace reported "as well as being treated as not-for-profit organisations, the four exempted clubs benefit under corporation and property tax laws." They are also permitted to have "affiliate professional basketball clubs which operate out of the same structure, an important factor in a country where basketball is the second sport." The Spanish economy is "in meltdown," with unemployment at 26% and youth unemployment at 50%. Yet "none of this" affected the spending power of Real Madrid, "and to a lesser extent Barcelona." Estimated by Deloitte to be the first, and only football club with an annual revenue in excess of €500M ($666M), Madrid is recognized as "the most valuable club in the world." The total debt of clubs in the league is "estimated at €4.1B ($5.5B)." It is "evident that whatever the extent of the privileges lavished on Madrid, Barcelona and the two other exemptions, the plc status -- or 'Sociedades Anonimas Deportivas' [SAD] is not working for the rest" (INDEPENDENT, 8/6).

PREMILINARY PHASE: The EFE reported "sources explained that the case has not been made public because the investigation is in the 'preliminary phase.'" The investigation, which is led by EC member Joaquín Almunia, began in '09 "following complaints about the advantages the clubs receive" from not being PLCs. Those who made the complaints met in Dec. '11 at the Defensor del Pueblo "Report to Parliament" to protest "the slow management of the case and the lack of conclusions." In response, the Report to Parliament wrote to the EC to propose a fast, agreeable solution. A Report to Parliament spokesperson said that "it had asked the EC to arrive at a conclusion or explain the reasons why it cannot." The Report to Parliament office "is waiting for the EC's official response" (EFE, 8/7).

Russian Premier League side Anzhi Makhachkala "could be forced to sell their top players after billionaire Owner Suleiman Kerimov showed his frustration with the Russian football club's lack of success by drastically cutting its financial lifeline," according to Anton Kolodyazhnyy of REUTERS. Anzhi has "spent lavishly since being bought by the Russian businessman in 2011 but his money has not bought success." It finished only third in the Russian championship last season and has just two points from its first four matches this season. Club Chair Konstantin Remchukov suggested on Twitter that Anzhi "planned a fire sale of players to trim costs." Remchukov tweeted, "The main news is that there will be a reorganisation at Anzhi. Many expensive players will go, and the budget will be around $50-70 million dollars a year" (REUTERS, 8/7). R-SPORT reported Anzhi’s bloated budget reached a reported $180M last season, likely putting it "among the top-two highest-spending Russian Premier League teams, along with Zenit St. Petersburg, heading into the current season." Remchukov said, "We failed to achieve any kind of success quickly, so a lot of players will leave" (R-SPORT, 8/7). ESPN reported the likes of Roberto Carlos, Samuel Eto’o and Chris Samba "have turned out for the Dagestan outfit, with Eto’o currently believed to be the world’s highest-paid player" -- reportedly taking home £17M ($26.3M) after tax. However, Kerimov and the Anzhi hierarchy "have now decided to adopt a more frugal transfer policy and focus more on youth development" (ESPN, 8/7).

Bloomberg Sports unveiled its first end-of-season projections for the Premier League. Forecasting the league finish of every team in the league, the projections are data-driven and take into account previous years of performance for each club, supplemented by the additional value that each club gained from the transfer window. The table indicates that this season will be a three-horse race between Chelsea, Man City and ManU, with only two points separating all three teams. View the projections at (Bloomberg Sports). ... Three Iranian football teams "were punished with a deduction of one point due to fan violence." Esteghlal, Malavan and Saipa were "found guilty after their fans behaved poorly during the Iranian Professional League matches" (TEHRAN TIMES, 8/6). ... FIFA "provisionally suspended a member of Jamaica’s national team for failing a drug test during World Cup qualifying." FIFA said in a statement that the player and a Jamaica team official, neither of whom were identified, "were banned for an initial period of 30 days and that an investigation has been opened" (BLOOMBERG, 8/6). ... Italian football authorities "have handed out a 10-match ban to a player from amateur club Matera for racially insulting an opponent, under new tougher penalties introduced to combat racism" (REUTERS, 8/7). ... The names of two Mexican footballers who tested positive for Clenbuterol "will not be released until the investigations have been completed." Liga MX Discipline Commission leader Eugenio Rivas said that "the two players will not be allowed to play on the fifth matchday of the current season" (LA AFICION, 8/6).