New Setback for the European Commission in the Litigation of Public Aid Granted to Spanish Professional Football Clubs

New Setback for the European Commission in the Litigation of Public Aid Granted to Spanish Professional Football Clubs
The decisions that the European Commission issued on 4 July 2016 declaring public aid (direct or indirect) granted to certain Spanish football clubs to be illegal was cause for debate. Indeed, these decisions were accompanied by an obligation for Spanish clubs to repay sums granted unduly, according to the Commission’s analysis. Several clubs concerned were quick to seek a stay of execution, or even to challenge the validity of the decisions of the Commission and request the decision to be overturned. The request made by FC Barcelona led the General Court to annul a first decision of the European Commission in a judgment of 26 February 20192 on the grounds that the Commission had not sufficiently taken into account the specificities of professional football, and had not fully examined the benefit as well as the disadvantageous consequences resulting from the exceptional tax regime, which the club had been able to deal with for a time.3 A new judgment of the General Court, delivered on 22 May 2019, and this time annulling the Commission’s decision on unlawful aid to Real Madrid, further weakens its position.

The disputed benefits that Real Madrid would have enjoyed

In November 1996, Real Madrid concluded an agreement with the Autonomous Community of Madrid to proceed with the exchange of land, with a view to develop the area around its stadium. Thus, the club agreed to transfer to the municipality of Madrid ownership of a plot located in the area called “Ciudad Deportiva”, in exchange for which the municipality of Madrid undertook to give the club several parcels to be determined later. This initial agreement was supplemented in May 1998 by a new agreement stipulating that the municipality must provide Real Madrid with a number of lands, including parcel B-32, called “Las Tablas”, with a value then estimated at EUR 595,194 according to an internal evaluation of the Madrilenian...

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