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Football and State aid: too important to fail?

Abstract

High-profile investigations into Dutch and Spanish football have brought the application of EU State aid law in sport into sharp focus, highlighting serious and potentially widespread legal failings throughout professional football in Europe. The EU recognises professional football as economically, socially and culturally vital; thus, in the highly politicised arena of State aid, enforcement is far from straightforward. This overlooked tension between EU law and sport provides a new and interesting angle from which to view the EU’s policy on sport, and the relationships between global actors, the Commission, UEFA, Member States and professional football clubs. The area also makes visible a dynamic interaction of interests, engaging the EU internal market, the societal role of sport, UEFA financial fair play and Member State autonomy. The operation of State aid law in football looks set to revolutionise funding in sport generally, presenting an exciting opportunity for EU sports policy, and also putting impetus behind continued State aid modernisation.

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Notes

  1. Commission Press Release (2013).

  2. Commission Press Release (2013).

  3. Case C-415/93, Union royale belge des sociétés de football association ASBL v Jean-Marc Bosman, Royal club liégeois SA v Jean-Marc Bosman and others and Union des associations européennes de football (UEFA) v Jean-Marc Bosman [1995] ECR I-4921.

  4. Weatherill (2009) and Parrish (2012).

  5. See generally Hancher (2012).

  6. Commission, SA.33584 (2013/C) (ex 2011/NN) – The Netherlands: Alleged municipal aid to the professional Dutch football clubs Vitesse, NEC, Willem II, MVV, PSV and FC Den Bosch in 2008–2011 (C(2013)1152 final) (Brussels, 6 March 2013), paras. 19–37.

  7. Commission, SA.29769 (2013/C) (ex 2013/NN) – Spain: State aid to certain Spanish professional sport clubs (C(2013) 8436 final) (Brussels, 18 December 2013), paras. 4–11.

  8. Commission, SA.36387 (2013/C) (ex 2013/NN) – Spain: Alleged aid in favour of three Valencia football clubs (C(2013) 8454 final) (Brussels, 18 December 2013), paras. 9–12.

  9. Commission, SA.33754 (2013/C) (ex 2013/NN) – Spain: Real Madrid CF, (C(2013) 8437 final) (Brussels, 18 December 2013), paras. 2–18.

  10. Reuters (2014).

  11. See generally Durance and Bayle (2002).

  12. TMC Asser Instituut (2005), para. 5.

  13. See Case C-41/90, Höfner v Macrotron, [1991] ECR 1991 I-1979, para. 21; Pavlov v Stichting Pensioenfonds Medische Specialisten, [2000] ECR I-6451, para. 75; and Case C-519/04 P, Meca-Medina v Commission, [2006] ECR I-6991, para. 22. According to the Court of Justice, the clubs would not need to be returning a profit and a club’s status within a Member State was not important (see Case C-41/90, Höfner v Macrotron). Thus, the “not for profit” member-owned status of Spanish clubs is not relevant.

  14. Szyszczak (2007) and Weatherill (2006).

  15. UEFA (2008).

  16. UEFA Club Licensing and Financial Fair Play Regulations (2012).

  17. See Council Regulation 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty [1999] OJ L 83/1; and Commission Regulation 794/2004 of 21 April 2004 implementing Council Regulation (EC) No. 659/1999 laying down detailed rules for the application of Article 93 of the EC Treaty [2004] OJ L 140.

  18. Regulation 659/1999, fn. 17 above, art. 1(f).

  19. Case C-301/87 France v Commission [1990] ECR I-307, paras. 9–24.

  20. Case 142/87 Belgium v Commission (Tubemeuse) [1990] ECR I-959.

  21. See Commission Draft Communication (2014) and Biondi (2013).

  22. Case T-358/94 Air France v Commission [1996] ECR II-2109, para. 56.

  23. SA. 36387, fn. 8 above.

  24. Case C-482/99 France v Commission (Stardust) [2002] ECR I-4397.

  25. See for instance Case C-39/94 Syndicat français de l'Express international (SFEI) v La Poste and others, [1996] ECR I-3547, paras. 60–61.

  26. See Cases T-228/99 and T-233/99 Westdeutsche Landesbank Girozentrale and Land Nordrhein-Westfalen v Commission [2003 ECR II-435; Case T-20/03 Kahla/Thüringen Porzellan GmbH v Commission [2008] ECR II-2305, paras 236-61; Case T-196/04 Ryanair v Commission [2008] ECR II-3643; Case T-156/04 Électricité de France (EDF) v Commission [2009] ECR II-4503.

  27. SA. 33754, fn. 9 above.

  28. SA. 36387, fn. 8 above.

  29. Commission Notice (2008).

  30. See Siebold and Klingmuller (2004).

  31. Baade and Dye (1988).

  32. SA. 33584, fn. 6 above, para. 84.

  33. See SA. 33618, SA. 33728, SA. 35135, SA.35440, SA. 36105, SA. 37109, and SA. 35501.

  34. Article 345 TFEU reserves to the Member States the rules governing the system of property ownership.

  35. SA. 33584, fn. 6 above, paras 42–44.

  36. Case 730/79 Phillip Morris [1980] ECR 267, para. 11.

  37. SA. 29769, fn. 7 above.

  38. Commission Notice (1998). See also Bartosch (2010) and Bousin and Piernas (2008).

  39. SA. 29769, fn. 7 above, paras 21–26.

  40. Case T-288/07 Friulia Venezia Giulia, [2001] ECR II-1619, para. 41; and see also Commission, On application by Germany, Commission decides that municipal aid for public swimming pool is not state aid (IP/00/1509) (Brussels, 21 December 2000).

  41. See Weatherill (2003).

  42. Treaty of Amsterdam Amending the Treaty on European Union, the Treaties Establishing the European Communities, (29) Declaration on sport; European Council Nice, 7–10 December 2000, Conclusions of the Presidency, Annex IV - Declaration on the Specific Characteristics of Sport and its Social Function in Europe, of which account should be taken in implementing Common Policies.

  43. Commission White Paper (2007).

  44. See also Commission Communication (2011).

  45. See, for example, Commission, Decision, SA.31722 – Hungary: Supporting the Hungarian sport sector via tax benefit scheme (C(2011)7287 final) (Brussels, 2011), paras. 86–90. See also Commission, Decision, SA.33618 (2012/C) which Sweden is planning to implement for Uppsala arena (C(2013) 2362 final) (Brussels, 2013); Commission, Decision, SA.33728 (2012/C) which Denmark is planning to implement for the financing of a new multiarena in Copenhagen, (C(2013) 2740 final) (Brussels, 2013); Commission, Letter to Member State, SA.35440 (2012/N) – Germany: Multifunktionsarena der Stadt Jena (C(2013) 1521) (Brussels, 2013); Commission, Letter to Member State, SA.35135 (2012/N) – Germany: Multifunktionsarena der Stadt Erfurt (C(2013) 1517) (Brussels, 2013); Commission, Letter to Member State, SA.36105 (2013/N) – Deutschland.

    Fußballstadion Chemnitz (C(2013) 5839 final) (Brussels, 2013); Commission, Letter to Member State, SA.37109 (2013/N) – Belgium: Football stadiums in Flanders (C(2013) 7889 final) (Brussels, 2013); Commission, Letter to Member State, SA.35501 (2013/N) – France: Financement de la construction et de la rénovation des stades pour l'EURO 2016 (C(2013) 9103 final) (Brussels, 2013).

  46. UEFA Club Licensing and Financial Fair Play Regulations (2012), art. 58(2). See also Commission and UEFA (2012), paras. 7–9.

  47. SA. 31722, fn. 45 above.

  48. SA. 31722, fn. 45 above, para. 85.

  49. SA. 31722, fn. 45 above, paras. 91–98.

  50. SA. 31722, fn. 45 above, para. 99.

  51. Van Rompuy (2012).

  52. Compare this to, for instance, Commission, Commission does not object to subsidies for French professional sports clubs (IP/01/599) (Brussels, 25 April 2001).

  53. Commission and UEFA (2012).

  54. Case C-415/93, Bosman, fn. 3 above, para. 227 (A.G. Lenz).

  55. Commission (2004).

  56. Commission (2004), para. 20.

  57. Commission (2004), s. 2.1, para. 9.

  58. Commission (2004), s. 2.1, para. 11.

  59. Commission Guidelines (2004), s. 3.3.

  60. SA. 36387, fn. 8 above.

  61. SA. 33584, fn. 6 above, para. 84.

  62. Commission Guidelines (2004), s. 3.1.1. (a).

  63. SA. 36387, fn. 8 above.

  64. Commission Guidelines (2004), s. 3.2.1, para. 31.

  65. Commission Guidelines (2004), s. 3.2.2, para. 34–37.

  66. Commission Guidelines (2004), see s. 3.2.

  67. Commission Guidelines (2004), s. 3.2.2, para. 38–42.

  68. Commission and UEFA (2012).

  69. SA. 33584, fn. 6 above, para. 80.

  70. See Commission, Public Consultation (2014).

  71. Olfers (2003) and Olfers (2009), p. 299.

  72. See, for instance, Written Question E-3579/02 by Toine Manders (ELDR) to the Commission (13 December 2002), Answer given by Mr Monti on behalf of the Commission (27 January 2003), (2003/C 192 E/121); Written Question E-0537/03 by Erik Meijer (GUE/NGL) to the Commission (26 February 2003), Answer given by Mr Monti on behalf of the Commission (14 April 2003) (2003/C 280 E/067); Written Question E-1860/03 by Joost Lagendijk (Verts/ALE) to the Commission (6 June 2003), Answer given by Mr Monti on behalf of the Commission (10 July 2003) (2004/C 33 E/183); Written Question E-2261/03 by Margrietus van den Berg (PSE) to the Commission (8 July 2003), Answer given by Mr Monti on behalf of the Commission (13 August 2003) (2004/C 65 E/134); Written Question E-0122/04 by Toine Manders (ELDR) to the Commission (26 January 2004), Answer given by Mr Monti on behalf of the Commission (11 March 2004) (2004/C 84 E/0202); Written Question E-0122/04 by Toine Manders (ELDR) to the Commission (26 January 2004), Answer given by Mr Monti on behalf of the Commission (11 March 2004) (2004/C 84 E/0202).

  73. European Parliament (2006).

  74. Commission and UEFA (2012), UEFA (2012) and Commission Letter (2012).

  75. See, for instance, SA. 31722, fn. 45 above.

  76. Commission Code (2009), para. 7.2.

  77. An independent and impartial body set up to investigates complaints about maladministration in EU institutions, bodies, offices, and agencies.

  78. European Ombudsman (2013).

  79. Deloitte (2013).

  80. Deloitte (2014).

  81. See, for instance, Telegraph (2013).

  82. Regulation 659/1999, fn. 17 above, art. 1(h).

  83. See Commission Notice (2009) and Westerhof (2005).

  84. Commission Communication (2012).

  85. There are many calls for more radical reform going beyond that proposed by the Commission. See, for example, Lever (2012).

  86. European Ombudsman (2012).

  87. Council Regulation (EC) No. 994/98 of 7 May 1998 on the application of Articles 92 and 93 of the Treaty establishing the European Community to certain categories of horizontal State aid [1998] OJ L 142.

  88. See Council Regulation No. 733/2013 of 22 July 2013 amending Regulation (EC) No. 994/98 on the application of Articles 92 and 93 of the Treaty establishing the European Community to certain categories of horizontal State aid [2013] OJ L 204, article 1(2).

  89. SA. 37109, fn. 45 above.

  90. SA. 35501, fn. 45 above.

  91. Commission, Draft Regulation (2014), art. 7.

  92. C-288/11 P, Leipzig-Halle v Commission.

  93. Commission Regulation 1224/2013 of 29 November 2013 Amending Regulation (EC) No. 800/2008 as regards its Period of Application; O.J. 2008, L 214, Commission Regulation (EC) No. 800/2008 of 6 August 2008 Declaring Certain Categories of Aid Compatible with the Common Market in Application of Articles 87 and 88 of the Treaty (General Block Exemption Regulation) [2013] OJ L 320, art. 15, and arts. 38 and 39.

  94. Commission Regulation 1407/2013 of 18 December 2013 on the Application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to De Minimis Aid [2013] OJ L 352/1.

  95. Regulation 1407/2013, fn. 93 above, art. 3.

  96. Regulation 659/1999, fn. 17 above, arts 13 and 4.

  97. Regulation 659/1999, fn. 17 above, art. 14. See also Marinas (2005).

  98. There have, however, been notable problems in this area, particularly with Spain: see Jestaedt et al. (2006).

  99. Brandtner et al (2010).

  100. For example, the 2006 contract renegotiations between the Municipality of Alkmaar and local club AZ Vastgoad BV: Commission, Decision of 25 January 2006 on the State Aid implemented by the Netherlands for AZ and AZ Vastgoed BV (notified under document number C(2006) 80) [2006] OJ L 307/194.

  101. See Inside World Football (2013, 2014).

  102. This would also ensure compliance with Directive 2006/123/EC of 12 December 2006 on Services in the Internal Market [2006] OJ L 376.

  103. Deloitte (2014).

  104. Case C-415/93, Bosman, fn. 3 above.

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Craven, R. Football and State aid: too important to fail?. Int Sports Law J 14, 205–217 (2014). https://doi.org/10.1007/s40318-014-0049-1

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Keywords

  • State aid
  • Sports Law
  • Football
  • UEFA
  • Article 165 TFEU