European Union Makes Illegal Aid Accusations Against Seven Spanish Clubs Formal
The European Union "has made formal accusation" against seven Spanish clubs -- La Liga sides Real Madrid, Barcelona, Athletic Bilbao, Valencia, Elche and Osasuna and second division side Hércules -- in "three separate articles published earlier this month in their official journal," according to J. L. Guerrero of AS. Investigations "were opened in December, concerning clubs receiving state aid in breach of EU competition guidelines." At the "end of last year, the Spanish government submitted documentation relating to the allegations to the European Commission." The government's arguments "have not convinced the Union's legislative body," which has set April 7 as the "deadline for implicated parties to submit their account books." Three separate investigations "are underway: one involving Real Madrid, Barcelona, Osasuna and Athletic Club -- all of whom have yet to be converted into public limited companies." The second concerns Hércules, Valencia and Elche, "who are accused of being the recipients of public-funded loans while the third revolves around the alleged transfer and reclassification of land between Madrid's regional government and Real Madrid." The Commission stated that in all three cases, the clubs "may have to return any undue state aid they have received." Real Madrid, Barcelona, Osasuna and Athletic Bilbao are accused of "possible tax privileges as a result of not being obliged to convert themselves" into PLC's in '92. All but Athletic Bilbao -- at 21% -- "pay corporation tax at 25%." The "rest of Spanish clubs, who are PLCs, pay at the standard 30% tax rate." The EC's second investigation concerns "possible benefits received by Real Madrid for the exchange of land in the Las Tablas district in 1998 which was returned in 2011 because, according to local authorities, it was classified for public use only." As part of its third investigation, the EC also "requires a more detailed explanation of guaranteed loans" totaling €118M given to Valencia, Hércules and Elche -- "state-funded credit which the clubs have been unable to return" (AS, 3/14).