Editor's note: Marine Montejo is a graduate from the College of Europe in Bruges and is currently an intern at the ASSER International Sports Law Centre. 

Part 2. EU competition law and sports funding

The first analysed impact of Brexit on sport was the one regarding EU internal market rules and free movement. However, all sport areas that are of interest to the European Union will be impacted by the result of the future Brexit negotiations. This second part of the blog will focus on EU competition law and the media sector as well as direct funding opportunities keeping in mind that if the UK reaches for an EEA type agreement competition law and state aid rules will remain applicable as much as the funding programs.  

A) EU competition law and the media sector

As for the internal market rules, EU competition law applies to sport as long as an economic activity appears to have an impact on the European market. In the field of sport this is particularly true for the media sector, a key source of economic revenue for professional sport. 

EU competition law

It should be stated from the beginning that the UK, even completely outside of the EU, will not escape EU competition law (articles 101 and 102 TFEU). Indeed, if there is an economic activity within the European market EU law will continue to apply. The application of EU competition law leads to a convergence with national competition rules and most of the decisions relating to sport will probably remain enforceable through UK national law provisions unless there is an important change in their interpretation or a complete shift in competition law policy leading to a change of these rules. 

The main impact for the UK regarding the applicability of EU competition law appears to be in the media sector. With regard to the collective selling of media rights, for the time being national provisions should maintain the system in force which is derived from the Commission’s decisional practice (Football Association Premier League for a British example). Collective selling of media rights is compatible with EU competition law if the selling procedure is organised in a transparent and non-discriminatory manner, the contractual exclusivity runs for no more than three years and the rights are sold in several packages. The “no-single buyer” clause that was first imposed upon the Premier League to avoid the risk of monopolisation given the specific structure of the British sport media market (and now also applied by the German competition authority for the Bundesliga rights) might be questioned. This clause, providing that all the rights should not be sold to a single broadcaster, combined with the possibilities offered by EU free movement and impressive marketing skills from the Football Association, has made the Premier League the most valuable football competition in the world (6.9 billion euros for 2016-2019). It is highly probable that the UK national competition authority will keep that clause and the obligations for all sport media rights unless there is a major shift in national competition law policy. Remaining or leaving, in any case EU competition law will have left an important imprint on the British sport media rights landscape.

Other media related questions

In relation to media rights, two more points are interesting. Firstly, the question concerning multi-territory licensing of media rights in sport may arise. Sport rights are sold on a territorial basis. One of the many reasons for it are linguistic borders. However, the ECJ concluded that territorial exclusivity agreements relating to the transmission (using satellite decoders from broadcast providers based on another Member State) of football matches were a breach of competition law and the free movement of provision of services (Football Association Premier League v QC Leisure and Karen Murphy v. Media Protection Services Limited, joined cases C-403/08 and C-429/08). This important judgement caused great despair among sport organisers but it gave the opportunity to consumers to access a broader list of sport media providers around the EU. Depending on the position of the UK towards the EU, this possibility may vanish in the future. This judgment is also important for EU protection of property rights. The Court held that sport events cannot be considered intellectual creations, and, as such, cannot be protected by copyright. However, a clear distinction was made between private residence watching and public screening. The latter could amount to copyright infringement if some part of the event can be considered as unique and original and are duly protected (i.e. songs, slow motion extracts, etc.). In that case, it is for the Members States to regulate such a protection, but the EU is also developing a specific protection at the European level. Sport rights holders are exposed to financial damages due to breach of intellectual property rights with high economic value. This is the case for media rights but also for sport merchandising. The enforcement of those rights is conjointly overlooked by the Commission for harmonization of national legislations as well as the European Union Intellectual property Office (EUIPO) and Europol. In a situation where cross-border piracy and counterfeiting is difficult to tackle alone, the UK might consider to secure some kind of cooperation with the EU on that matter.

Secondly, also concerning the sports media industry, albeit with less ties to competition law provisions, the Audiovisual Media Services Directive (better known as the “Television Without Frontiers directive”) might not be applied to the UK in the future or at least as it stands at the moment. This directive regulates cross-border television broadcasting and allows EU Member States to establish a list of sport events of major importance for society that are offered on subscription-free TV channels (article 14 of the directive). The protected events list is then transmitted to the Commission in order to check its compliance with EU law and published in the EU Official Journal. Members States are entitled to create such a list but may choose not to. The UK is amongst the Members States that choose to set up such a list. Consequently, the 1996 Broadcasting Act lists those events for the UK (for example the Olympic Games, the Wimbledon Tennis Finals, the FA Cup Final, or the FIFA World Cup Finals Tournament). The national law relies on the directive which means that after Brexit, if the UK wants to keep with that requirement it should integrate the list into its national law. In a country where the subscriptions for premium sports pay television are the most expensive in Europe, it is quite doubtful whether this is good news for the British consumer and that might be an incentive to maintain a similar system. The directive also provides for a system of mutual recognition meaning that a provider of an audiovisual media services is subject to the law of its country of origin. Another Member State cannot impose other requirements than the one provided for by the directive. This principle, in case of Brexit, will surely disappear which is a potential problem for sports broadcasters seated in the UK and engaged in cross-border activities.  

EU State aid policy

Public funding and financial support is often used in sport and is a highly sensitive issue. Infrastructure and individual sport clubs are the main beneficiaries of public funds, which can make them subject to EU State aid provisions (article 107 TFEU). The Commission has closely monitored the application of State aid law in the field of sport, drawing a big line between professional and grassroots sports subsidies. Financial support to professional clubs is sometimes found incompatible with EU law as it distorts competition. An exception to this is where the objectives pursued are non-economic (subsidies for young training centres have been considered compatible as the main goal is to meet education obligations). Subsidies to amateur clubs are less likely to constitute State aid as they are not pursuing an economic activity. For sport infrastructures, only the ones pursuing economic activities and in competition at the European level are likely to be subject to State aid rules. A consequence of a complete Brexit might end the application of EU State aid rules in the UK. Anyway, given the expected negative economic consequences related to Brexit, it is rather unlikely that British public authorities will have the financial capacity to intensively fund professional clubs and sports infrastructures even if it they would have the freedom to do so. 

B) The money: securing sports funding

Finally, since the entry into force of the Lisbon Treaty, the EU developed a more proactive policy in sport via funding opportunities. These are also going to be impacted by Brexit and adverse consequences will specifically target amateur sport.  

EU funding for sport

The introduction of article 165 TFEU allowed the EU to create a specific funding programme for sport. Before that, sport related projects were indirectly funded through other EU programmes. The 2014-2020 Erasmus + Sport programme provides grants for a broad range of actions and activities in the field of sport. The aim of the programme is to promote the positive values of sport and physical activity and good governance in the sector as well as support dual careers of athletes and projects against match-fixing, doping, violence, racism and intolerance. These funds are directly targeted to grassroots sports through collaborative partnerships, not-for-profit European sport events, dialogue with European sport stakeholders as well as studies and conferences. British sport and sport-related organisations as well as public authorities can benefit from funding. However, these possibilities may disappear following Brexit. Erasmus + Sport is a European programme and, as such, helps to finance projects contributing to the development of a European dimension of sport. Consequently, it is difficult to give an exact number of projects financed through the programme in the UK. However, to give an illustration, in 2015, just for Erasmus + Sport projects for which a UK sport organisations was the lead coordinator, the EU funding amounted up to 1.1 million euros. It should be kept in mind that other British organizations are simple partners to many other projects and are entitled to be funded as well (the 2015 budget for the Erasmus + Sports programme was 18,8 million euros). Will the UK be entitled to keep some funding? If it secures an EEA type agreement, Erasmus + Sport will still apply but the UK will have to financially contribute to it. 

The financial participation from the EU in UK sports is also possible through other EU programmes. It is worth mentioning the European Structural and Investment funds which promotes the socio-economic development of European regions (10.7 billion euros were awarded to the UK for 2014-2020). The EU also provides funding for sport related studies to which several UK-based academics and think tanks have already participated. One should not forget that the EU is also actively supporting academic and PhD research through several programmes (the main one being Horizon 2020) and that in case of Brexit it will have a negative impact on the UK’s capacity to produce academic output on sport (think about anti-doping, sports law and governance, economics studies, etc…). 

Gambling and sport betting

The British market for gambling and sports betting generated 12.6 billion pounds last year. It is one of the biggest markets in Europe and British betting operators seized the opportunities offered by the EU’s freedom to provide services to develop their activities in other EU Members States as the EU pushed for the opening of gambling and online betting to competition. As a consequence of Brexit, Gibraltar-based online betting firms (let’s face it, due to a favourable taxation system) might lose their access to the European market. The Gibraltar betting and gambling authority tried to put on a brave face in the aftermath of the Brexit vote but, in the case of Brexit, the best solution for the operators will be to leave Gibraltar for an EU Member State and secure its access to the European market (for example Malta, a very popular host for betting operators).

The economic impact for the gambling sector is sure to be important, but it is just as important for the sport sector as part of the betting industry’s revenue constitutes an important source of income for sport, and in particular grassroots sport via taxes. Furthermore, betting operators are active in sponsorship for professional club and athletes. If the financial stability of these companies is undermined, it will probably have an impact on both their participation in the financing of sport and their marketing strategy. 

Another problem that might arise for the UK in that area concerns the fight against corruption and match fixing that threatens the integrity of sport and its economic value. The UK cannot handle this problem alone and the EU, given the sector’s inherent cross-border nature, is encouraging cooperation between Members States and sport organisations to tackle the issue. Europol, the EU’s law enforcement agency, provides assistance to EU Member States and sport organisers (collaborating for example with UEFA). Brexit might imply that the UK will leave that organisation, yet it could also maintain a cooperation via operational or/and strategic agreements. In any event, the UK remains a member of Interpol also very active in the fight against match-fixing and illegal gambling. 

Conclusion

Just about everything is going to change between the EU and the UK and it is the same for sport. At this stage, a lot of guesswork is involved in trying to elucidate a picture of the impact of Brexit on sport. Whether with a direct positive action through its funding policy or because of the rules on the internal market and competition having an indirect impact, the EU had an influence on the whole of British sport. This blog tackled the main issues at stake in sport for the EU and the UK before the latter starts its negotiations to formally rescind its membership. But it also should be noted that the EU is an important arena for formal and informal discussion on subject that interest sport in general. For example the EU Work Plan for sport for 2014-2017 sets up EU expert groups to work on topical issues in the field of sport. The European Parliament also hosts a sport-intergroup. By leaving the EU, the UK is also leaving behind an opportunity to deepen its cooperation at the EU level.

On Thursday 14 October 2021 from 16.00-17.30 CET, the Asser International Sports Law Centre, in collaboration with Dr Marjolaine Viret (University of Lausanne), will be launching the second season of the Zoom-In webinar series, with a first episode on Diversity at the Court of Arbitration for Sport: Time for a Changing of the Guard?

The Court of Arbitration for Sport (CAS) is a well-known mainstay of global sport. It has the exclusive competence over challenges against decisions taken by most international sports governing bodies and its jurisprudence covers a wide range of issues (doping, corruption, match-fixing, financial fair play, transfer or selection disputes) including disciplinary sanctions and governance disputes. In recent years, the CAS has rendered numerous awards which triggered world-wide public interest, such as in the Semenya v World Athletics case or the case between WADA and RUSADA resulting from the Russian doping scandal (we discussed both cases in previous Zoom-In discussion available here and here). In short, the CAS has tremendous influence on the shape of global sport and its governance.

However, as we will discuss during this webinar, recent work has shown that the arbitrators active at the CAS are hardly reflective of the diversity of people its decisions ultimately affect. This in our view warrants raising the question of the (urgent) need to change the (arbitral) guard at the CAS. To address these issues with us, we have invited two speakers who have played an instrumental role in putting numbers on impressions widely shared by those in contact with the CAS: Prof. Johan Lindholm (Umea University) and attorney-at-law Lisa Lazarus (Morgan Sports Law). Johan recently published a ground-breaking monograph on The Court of Arbitration for Sport and Its Jurisprudence in which he applies empirical and quantitative methods to analyse the work of the CAS. This included studying the sociological characteristics of CAS arbitrators. Lisa and her colleagues at Morgan Sports Law very recently released a blog post on Arbitrator Diversity at the Court of Arbitration for Sport, which reveals a stunning lack of diversity (based on their calculations, 4,5% of appointed CAS arbitrators are female and 0,2% are black) at the institution ruling over global sport.

Guest speakers:

• Prof. Johan Lindholm (Umea University)
• Lisa Lazarus (Morgan Sports Law)

Moderators:

• Dr Antoine Duval (Asser Institute)
• Dr Marjolaine Viret (University of Lausanne/PMA Avocats)

Register for free HERE.

Zoom In webinar series

Join us for our unique training programme on ‘Sport and human rights’ jointly organised by the Centre for Sport and Human Rights and the Asser Institute  and hosted by FIFPRO. After the success of the first edition in 2022 the programme returns, focusing on the link between the sport and human rights and zooming in on a number of challenges underlying this link, such as the human rights impacts of day-to-day sports, the normative framework and applicability of the UNGPs in the sporting context,  the rights of athletes, gender and sports, remedies for sport-related human rights harms, and more. 

If you wish to join, register HERE.

Tackling contemporary human rights challenges in sport
The programme brings together the latest in academic research with practical experiences from working in the field in an interactive package, fostering productive exchanges between the speakers and participants. Theoretical knowledge will be complemented by exposure to hands-on know-how and exercises.

Participants will have the opportunity to learn from experts from the Asser Institute, the Centre for Sport and Human Rights, and FIFPRO, as well as high-profile external speakers from both academia and practice. 

Latest version of the full 4-day programme

What will you gain?

• An extensive introduction to the emergence of the sport and human rights movement

• A greater understanding of the normative framework for human rights standards in sport

• A comprehensive overview of the latest developments in the interplay between gender and sports

• Practical know-how to govern  human rights in the context of sporting organisations

• Practical know-how to address  human rights risks in the context of day-to-day sports, including safeguarding

• Practical know-how to access remedy in human rights disputes

• The opportunity to engage in discussions and network with leading academics and professionals 

Topics addressed in this summer programme include:

• The emergence of the sport and human rights discussion/movement

• The integration of human rights in the governance of sport

• The protection of athletes’ rights

• Gender and sports

• Access to remedy for sport-related human rights harms

If you wish to join, register HERE.

Scholarships

The Centre for Sport and Human Rights is funding a scholarship for an outstanding master student, PhD candidate, or civil society representative from an underrepresented group, including those from the global South, to participate in the Asser Institute’s summer programme ‘Sport and Human Rights’. More information is available on their website.

Interested candidates should apply by 31 March 2023, 20:00 CET through the CSHR website.

The year is coming to an end and it has been a relatively busy one for the CAS Ad Hoc divisions. Indeed, the Ad Hoc division was, as usual now since the Olympic Games in Atlanta in 1996[1], settling  “Olympic” disputes during the Winter Olympics in Sochi. However, it was also, and this is a novelty, present at the Asian Games 2014 in Incheon.  Both divisions have had to deal with seven (published) cases in total (four in Sochi and three in Incheon). The early commentaries available on the web (here, here and there), have been relatively unmoved by this year’s case law. Was it then simply ‘business as usual’, or is there more to learn from the 2014 Ad Hoc awards? Two different dimensions of the 2014 decisions by the Ad Hoc Division seem relevant to elaborate on : the jurisdiction quandary (part. 1) and the selection drama (part. 2).

Part. 1: The Jurisdiction quandary: Too early to be judged!

The scope of jurisdiction of the Ad Hoc Division of CAS is provided for in article 1 of the ‘Arbitration Rules for the Olympic Games’ (the same is true for the Asian Games)[2]. However, legal uncertainties over this scope of jurisdiction remain a defining feature. Many earlier disputes in front of the Ad Hoc division have tackled this question, and this has been true again this year.[3]

It is not so much the scope rationae personae that might be problematic, although one case arose at the Asian games in which two former squash players were denied access to the Ad Hoc division on the basis of not being “participating athletes”.[4] Nor is it the rationae materiae that has been a real problem, as claimants tend to submit disputes, which are related to the Games. No, the problem child is usually the jurisdiction rationae temporis. Indeed, article 1 of the rules states that “any disputes covered by Rule 61 of the Olympic Charter, insofar as they arise during the Olympic Games or during a period of ten days preceding the Opening Ceremony of the Olympic Games” can be subjected to the jurisdiction of the Ad Hoc Division. So the key question is: When does a dispute “arise”? 

In the Birkner case[5], the Ad Hoc Division in Sochi had to grapple extensively with the question of when the dispute arose as, during the hearing, the respondent, Comitato Olympico Argentino, “denied the existence of a basis of jurisdiction of the panel”. The case concerned a selection drama for the Sochi Games (see part 2); jurisdiction rationae personae and rationae materiae were unproblematic. The CAS did examine whether the local remedies were exhausted, and considered that “that there were no internal remedies to exhaust”.[6] The only barrier left for jurisdiction to be asserted was the ratione temporis. In short, “did the dispute arise in the required time frame?”[7]

This “vexing issue” [8] was touched upon repeatedly in past Ad Hoc division awards.[9] In the Birkner case, it had to be demonstrated that the dispute arose not earlier than the 28 January 2014, 10 days before the opening ceremony scheduled for the 7 February 2014. The panel first reaffirmed the fact that “the date when the dispute arose cannot, per se, be the date when the Request for Arbitration is filed” .[10]  So, back to the key question, when did the dispute arise?

The award refers extensively to the Schuler case[11]. In its main holding on jurisdiction, the 2006 panel considered that “it would not be possible to say that a dispute had arisen until Ms Schuler had decided to appeal and had filed notice of her appeal”.[12] Nevertheless, the 2014 panel refused to consider the Schuler precedent to be applicable to the Birkner case for two reasons: the factual situation is different and the reasoning used in Schuler is fundamentally flawed.

On the factual side, contrary to the Schuler case, the panel finds that “[i]n the present case […] the explanation was not given on a date inside the required period, as it was either on 20 January 2014, which is the date of the letter of explanation, or on 22 January 2014, which is the date on which the Applicant says that she received that letter”.[13] Both of these dates being well before the 10 days period, the panel is of the opinion that it lacks jurisdiction. On the legal side, the panel is clearly not “convinced by the legal reasoning adopted in the Schuler case” .[14] In fact, it considers that “[s]uch conclusion could extend the jurisdiction of the ad hoc Division outside the precise and limited framework set by the Rules, which this Panel is required to respect and apply” [15]. The panel is of the opinion that “the date when a dispute arises is in general […] the date of the decision with which the Applicant disagrees” .[16] However, “[s]uch a date can arise later […] if […] the decision is not self-explanatory and requires some explanation in order for the parties to know with certainty that they are in disagreement”.[17]

This is a noteworthy consideration, which indicates a substantial reduction of the scope of jurisdiction of the CAS Ad Hoc Division. If the parties do not agree to the jurisdiction of CAS (in practice they often do not contest the jurisdiction[18]) it will render more difficult the referral of a dispute to the Ad Hoc Division. This understanding of the start of a dispute is contradicting the overall aim of the Ad Hoc Division, which is to deal swiftly with all disputes intimately linked to the Games. In this light, a more flexible interpretation of the jurisdiction rationae temporis, as suggested in the Schuler case, is preferable. Athletes are no legal experts; they (and sometimes their lawyers) need time to find their way through the jungle of sporting regulations and dispute resolution mechanisms potentially applicable. The crucial importance of the Olympic Games for an athlete’s career call for an interpretation of the start of the dispute that focuses on the intention to challenge the decision as highlighted in the Schuler award[19]. Moreover, any doubts concerning the starting date of the dispute should play in favour of the athlete, unless the time between the date of notification of the contentious decision and the decision to lodge a complaint in front of CAS is disproportionately (and abusively) long. The attack by the Birkner panel on the reasoning adopted in Schuler is no anodyne move; in the future it may threaten the access to justice of athletes and their ability to obtain a swift and fair decision, in a context where they most urgently need it.

[1] On the early days of the CAS Ad Hoc Division at the Olympics, the book by Gabrielle Kaufmann-Kohler is a must read : G. Kaufmann-Kohler, Arbitration at the Olympics, Kluwer Law, 2001.

[2] Article 1 of the Arbitration Rules for the OG stipulates that:

“The purpose of the present Rules is to provide, in the interests of the athletes and of sport, for the resolution by arbitration of any disputes covered by Rule 61 of the Olympic Charter, insofar as they arise during the Olympic Games or during a period of ten days preceding the Opening Ceremony of the Olympic Games.”

“In the case of a request for arbitration against a decision pronounced by the IOC, an NOC, an International Federation or an Organising Committee for the Olympic Games, the claimant must, before filing such request, have exhausted all the internal remedies available to him/her pursuant to the statutes or regulations of the sports body concerned, unless the time needed to exhaust the internal remedies would make the appeal to the CAS Ad Hoc Division ineffective.”

[3] CAS OG 14/03; CAS AG 14/01; CAS AG 14/02.

[4] See CAS AG 14/01, §2.5. See also CAS OG 12/03, §2.3.

[5] CAS OG 14/03

[6] CAS OG 14/03, §5.14

[7] CAS OG 14/03, §5.17-5-30

[8] CAS OG 14/03, §5.20

[9] Most notably in the Schuler case, CAS OG 06/002. For a general commentary see: I.S.LR. 2006 pp.50-51 and A. Rigozzi, ‘The decisions rendered by the CAS Ad Hoc Division at the Turin Winter Olympic Games 2006’, Journal of International Arbitration 23 (5): 453-466, 2006

[10] CAS OG 14/03, §5.21

[11] CAS OG 14/03, §5.24

[12] CAS OG 06/002, §14

[13] CAS OG 14/03, §5.25

[14] CAS OG 14/03, §5.25

[15] CAS OG 14/03, §5.27

[16] CAS OG 14/03, §5.28

[17] CAS OG 14/03, §5.28

[18] See for example CAS OG 14/01 §6.2 and CAS OG 14/02 §6.5

[19] In cases, in which the dispute overtly arose earlier than 10 days before the games such a restrictive interpretation could be tolerated. See for example: CAS OG 12/03, §2.3.23; CAS OG 12/02, §4.10; CAS OG 12/04, §5.2.

On 18 May 2016, the day the first part of this blog was published, the Commission said in response to the Hungarian MEP Péter Niedermüller’s question, that it had “not specifically monitored the tax relief (…) but would consider doing so. The Commission cannot prejudge the steps that it might take following such monitoring. However, the Commission thanks (Niedermüller) for drawing its attention to the report of Transparency International.”

With the actual implementation in Hungary appearing to deviate from the original objectives and conditions of the aid scheme, as discussed in part 1 of this blog, a possible monitoring exercise by the Commission of the Hungarian tax benefit scheme seems appropriate. The question remains, however, whether the Commission follows up on the intent of monitoring, or whether the intent should be regarded as empty words. This second part of the blog will outline the rules on reviewing and monitoring (existing) aid, both substantively and procedurally. It will determine, inter alia, whether the State aid rules impose an obligation upon the Commission to act and, if so, in what way.

In order to correctly decipher the potential consequences of Hungary’s behavior under EU State aid law, it is necessary to make a distinction between the part of the aid scheme declared compatible in the tax benefit scheme in the Hungarian sport sector decision, i.e. the donations for the sport infrastructures used by the professional sport organizations, and the donations used to cover personnel costs. Due to the fact that these two types of donation destinations were allowed based on two different exception procedures (the general exception found in Article 107(3)c) TFEU for the aid to sport infrastructure, and the General Block Exemption Regulation or the de minimis aid Regulation for the aid to cover personnel costs), the rules on reviewing and monitoring aid differ slightly. This blog will only focus on the review and monitoring rules of the tax benefit scheme in the Hungarian sport sector decision. 

Reviewing and monitoring State aid schemes – a Commission obligation?

A decision to approve an aid scheme (also known as a “positive decision” under Article 9(3) of the Procedural Regulation 2015/1589), should not fully release the Commission from any obligations regarding ex post control of that scheme. As can be read from Article 108(1) TFEU, “(t)he Commission shall, in cooperation with Member States, keep under constant review all systems of aid existing in those States. It shall propose to the latter any appropriate measure required by the progressive development or by the functioning of the internal market.”

The Commission’s responsibilities appear straightforward. After declaring the Hungarian tax benefit scheme compatible with EU law, it is obliged to review the implementation and usage of the aid by the Member State and the beneficiary, or beneficiaries. The CJEU settled as far back as 1974 that the Commission’s obligation to review existing aid is binding and that the Member States in question the obligation to cooperate with the Commission.[1] In fact, as Advocate General Lenz stated in his opinion in the Namur-Les Assurances du Crédit case, the Commission’s task to constantly review aid is even more necessary for aid schemes, like the Hungarian tax benefit scheme, as compared to individually authorized aid measures.[2] Pursuant to Article 108(1) TFEU and Article 21 of the Procedural Regulation, where the Commission considers that an existing aid scheme is not, or is no longer, compatible with the internal market instead of immediately launching a formal investigation, the Commission must issue a recommendation to the Member State concerned. The recommendation may propose, in particular:

1. Substantive amendment of the aid scheme;
2. Introduction of procedural requirements; or
3. Abolition of the aid scheme.[3]

It is important to note that in accordance with Article 288 TFEU, fifth sentence, recommendations have no binding force. Therefore, the proposed measure itself is not binding for the Member State. Only where the Member State accepts the proposed measure, shall it be bound by its acceptance to implement the appropriate measure.[4] However, if the Member State refuses to accept and implement the recommendations, the Commission could launch a formal investigation in accordance with Article 108(2).[5] Article 108 (1) TFEU and Article 21 of the Procedural Regulation also require the Member States to cooperate with the Commission for the purpose of reviewing aid schemes. This cooperation is further specified in Article 26 of the Procedural Regulation, which obliges Member States to submit annual reports on existing aid schemes to the Commission.[6] The reports allow the Commission to monitor the compliance with the positive decision by the Member State. As was already discussed in part 1 of this blog, Hungary too is required to submit a yearly monitoring report containing information on the total aid amount allocated, the sport infrastructure projects funded, their beneficiaries, etc.[7] A failure by Hungary to submit an annual report, would allow the Commission to propose an appropriate measure as listed above.[8] Whether Hungary actually submits annual reports to the Commission is currently unclear.      

Monitoring the tax benefit scheme in the Hungarian sport sector – not as straightforward as it appears

The Commission has repeatedly expressed its ambition for more and better monitoring of State aid schemes. This ambition follows from its primary objective to increase Commission enforcement focus on cases with the biggest impact on the internal market, as can be read from, inter alia, the State Aid Modernisation (SAM) Communication of 2012. Better targeted State aid control means an “increased responsibility of Member States in designing and implementing aid measures” for cases of a more local nature and with little effect on trade, as well as “enhanced ex post monitoring by the Commission to ensure adequate compliance” with the State aid rules.[9] In 2006, the Commission introduced a regular, ex post, monitoring exercise of existing aid schemes. The monitoring exercise gradually increased from 20 different schemes in 2006, to 75 schemes in 2014, covering all Member States, all main types of aid approved as well as block-exempted schemes.[10] The monitoring exercises conducted in 2014 led to the openings of four formal investigations.[11] The willingness to increase monitoring seems logical when taking into account EU case law, which imposes, in practice, an obligation for the Commission to review previously approved aid schemes. Yet, only a very small amount of existing aid schemes is monitored, nor is it realistically possible to do monitor all the schemes. As can be read in the recently published DG Competition Management Plan 2016, over the last 10 years the Commission declared over 3000 aid schemes or measures compatible with EU law after a the preliminary phase (“decisions not to raise objections”) alone.[12] This amount does not take into account positive decisions or block exempted aid schemes and measures, all of which should, strictly speaking, be monitored. Exact numbers on the amount of existing aid schemes currently running throughout the EU are not available, but one could safely say that the overwhelming majority of existing aid schemes are not monitored. Unless the State aid department of the Commission dramatically increases its resources, both in terms of finances and staff, monitoring all existing State aid schemes will remain utopic.  

The “specificity” of State aid to the professional sport sector and why extra monitoring in the sector should be considered

The Hungarian tax benefit scheme is not functioning in accordance with its original objectives: many of the sport infrastructure projects funded with public money do not seem strictly necessary and selected professional football clubs benefitted disproportionately. Under these circumstances, a monitoring exercise conducted by the Commission could be needed. If a monitoring exercise confirms disproportionate spreading of subsidies, a consequent set of appropriate measures taken by Hungary could bring the scheme in line with its original objectives. However, given that the majority of schemes are not monitored, there is a very big chance that the Hungarian tax benefit scheme is not one of the “lucky ones” selected. It is also unclear whether the Commission’s answer to the Parliamentary question of 18 May in any way increases that probability.  

The State aid complaint procedure as an alternative

Another way to force the Commission to look into the aid scheme, not yet discussed above, is through a State aid complaint procedure. Although the tax benefit scheme was already approved by the Commission in 2011, this should not rule out the possibility of an interested party submitting a complaint to inform the Commission of any alleged unlawful aid.[13] Pursuant to Article 12(1), the Commission is obliged to examine without undue delay a complaint by an interested party, thereby automatically triggering the preliminary State aid investigation of Article 108(3) TFEU. Although ‘unlawful aid’ refers to new aid put into effect in contravention of Article 108(3) TFEU[14], and not existing aid, such as aid schemes authorized by the Commission[15], ‘new aid’ also refers to existing aid that has been altered by the Member State.[16] In accordance with the Commission’s State Aid Manual of Procedures, for an aid scheme to be altered, the complainant would need to demonstrate that a change has taken place that affects “the evaluation of the compatibility of the aid with the common market”.[17] In addition to this, the complaint would need to include, inter alia, information on the (functioning of) the scheme, the amount of aid granted, and why the scheme is no longer compatible under Article 107(3).[18] A further highly important criterion is for the interested party to demonstrate to the Commission that the complainant is directly affected in its “competitive position” by the aid scheme.[19] This criterion empowers the Commission to separate formal complaints from the complaints that are “not motivated by genuine competition concerns”, thereby reducing considerably its workload of having to launch a (preliminary) investigation based on every single complaint it receives.[20] Complaints submitted by complainants, who the Commission does not consider to be interested parties, will be regarded as “general market information”[21] and do not oblige the Commission to investigate.  

The “specificity” of State aid to professional sport – no complaints by other clubs

The “interested party” criterion was only added after the reform of the Procedural Regulation in 2013[22], and has affected the professional sport sector considerably. The two years prior saw great activity by the Commission in the sector, including the opening of four formal investigations into alleged State aid to professional football clubs like Real Madrid and Valencia CF.[23] The investigations into alleged aid granted to Real Madrid and Valencia CF were not launched after the submission of a complaint by an interested party, but after “the attention of the Commission was drawn by press reports and information sent by citizens in 2012-2013”.[24] The end of formal investigations into alleged aid granted to professional sport clubs coincided with the introduction of the “interested party” criterion: since citizens are not considered interested parties, the Commission does not have an obligation anymore to investigate complaints, or any form of information, submitted by them. At this moment, only complaints submitted by interested parties, i.e. a party directly affected in its competitive position, have the potential of triggering fresh State aid investigations in the professional sport sector.[25]

Which persons or undertakings fulfill the “interested party” criterion? The answer to this question requires a case by case analysis and depends on the aid measure or scheme chosen by the public authorities.[26] Nonetheless, where aid is granted to a professional sport club, the clearest example of an interested party would be another professional sport club. Getting professional sport clubs to submit State aid complaints is, however, easier said than done. Contrary to other economic sectors where competitors would complain if they feel that they are directly affected in their competitive position, no professional sport club has ever submitted a State aid complaint, nor is it likely to happen anytime soon. As is confirmed by Dutch professional football club FC Groningen’s director Hans Nijland in an article published on 18 May by the Dutch magazine De Groene Amterdammer , “if (another football club) manages to sign a deal with its municipality, I will not complain. In fact, I would say congratulations, well done”.[27] The same mentality probably prevails in Hungary, making it very unlikely that a Hungarian professional football club, or any other professional sport club, decides to submit a complaint alleging unlawful aid to, say, Puskás Akadémia FC due to the disproportionate distribution of subsidies under the tax benefit scheme.  

Why extra monitoring in the sport sector should be considered

The advantages of EU State aid control include efficient government spending in the economy as well as better accountability and transparency of aid measures.[28] Nonetheless, with the chances of the Commission monitoring existing aid in professional sport, such as the Hungarian tax benefit scheme, being very slim, and given the unlikeliness of a submission of a complaint by a competing professional sport club, how useful are the State aid rules to achieve better accountability and transparency in (professional) sport? Local governments will continue spending large amounts of public money on projects that distort competition and are contrary to the general public interest, without a meaningful risk of being called back. Furthermore, as long as the Commission does not prioritize State aid enforcement to the professional sport sector, similar to how it enforces the State aid rules regarding fiscal aid to multinationals[29], it is also unlikely that it will investigate ex officio.

From the “efficient use of Commission resources” viewpoint, it is, in a way, understandable that the Commission has decided not to prioritize State aid to professional sport. They are, after all, not the most distortive State aid cases. However, this lack of prioritization is not being compensated with the submission of complaints by interested parties, meaning that public authorities have less to fear from State aid control in the professional sport factor, as compared to other market sectors.

To prevent a complete carte blanche for the public authorities, I would argue that the Commission should impose upon itself stricter conditions as regards monitoring State aid measures and scheme to the benefit of professional sport clubs. The current monitoring system, where the chance of being monitored is smaller than not being monitored, is inefficient in a sector where competitors do not serve as watchdogs. Only by radically increasing the monitoring chance in the professional sport sector can better accountability and transparency of aid measures be achieved.

[1] Case 173/73, Italy v Commission, [1974] ECLI:EU:C:1974:71, para 24.

[2] Opinion of Advocate General Lenz in Case C-44/93, Namur-Les Assurances du Crédit SA v Office Nationale du Ducroire , [1994] ECLI:EU:C:1994:262, para 86.

[3] Procedural Regulation 2015/1589, Article 22. Contrary to the decision options of formal investigations, a decision to order a recovery of the aid from the beneficiary or beneficiaries, as listed in Procedural Regulation, Articles 9(5) and 16, is not an option for the “review procedure”.

[4] Ibid., Article 23(1).

[5] The Enterprise Capital Funds (ECF) decision is a good example of a formal investigation based on ex post review and monitoring. Following a “selected” monitoring exercise in 2011, it was discovered that the UK had failed to take the appropriate measures to bring an aid scheme in line with the Commission Guidelines on Risk Capital , even though it had promised to do so. This led to the Commission opening a formal investigation in November 2011.

[6] Pursuant to Procedural Regulation, Article 26(1), the obligation to submit annual reports applies to decisions “to which no specific reporting obligations have been imposed in a conditional decision”. Under a conditional decision, the Commission attaches to a decision conditions subject to which aid may be considered compatible with the internal market. The tax benefit scheme in the Hungarian sport sector decision has no specific conditions attached to it, apart from the usual obligation for the Member State concerned to submit an annual report to the Commission.

[7] Commission Decision of 9 November 2011, SA.31722 – Hungary - Supporting the Hungarian sport sector via tax benefit scheme , para 57.

[8] Procedural Regulation 2015/1589, Article 26(2).

[9] EU State Aid Modernisation Communication of 8 May 2012 , para 19.

[10] Commission Staff Working Document of 4 June 2015, “ Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on Competition Policy 2014 ”, page 10.

[11] Ibid. One of the investigations involved the Enterprise Capital Funds scheme – Supra n5.

[12] DG Competition document of 18 March 2016 REF. Ares(2016)1370536 “ Management Plan 2016 ”, page 15.

[13] Procedural Regulation 2015/1589, Article 24(2).

[14] Ibid., Article 1(f).

[15] Ibid., Article 1(b)(ii).

[16] Ibid., Article 1(c).

[17] Internal DG Competition working documents on procedures for the application of Articles 107 and 108 TFEU of 10 July 2013, State Aid Manual of Procedures , Section 5, para 1.2.1.

[18] A complaint that does not comply with the compulsory complaint form, or if the complainant does not provide sufficient grounds to show the existence of unlawful aid can be withdrawn by the Commission. See Procedural Regulation 2015/1589, Article 24(2).

[19] Form for the Submission of Complaints Concerning Alleged Unlawful State Aid or Misuse of Aid , point 3.

[20] Draft Report by the European Parliament of 19 March 2013 on the proposal for a Council Regulation amending Regulation (EC) No 659/1999 laying down detailed rules for the application of Article 93 of the EC Treaty (COM (2012) 725 final) , page 17.

[21] Supra., No 19.

[22] Council Regulation (EU) No 734/2013 of 22 July 20-13 amending Regulation (EC) No 659/1999 laying down detailed rules for the application of Article 93 of the EC Treaty [2013] OJ L204/14.

[23] An explanation on why the public financing of sports infrastructure and professional sports clubs only started to attract State aid scrutiny in recent years can be read in: Ben Van Rompuy and Oskar van Maren, “EU Control of State Aid to Professional Sport: Why Now?” In: “The Legacy of Bosman. Revisiting the relationship between EU law and sport”, T.M.C. Asser Press, 2016.

[24] See, for example Commission decision of 18 December 2013, SA.36387 Spain – Alleged aid in favour of three Valencia football clubs, para 3. The other formal investigations to professional football clubs (i.e. Real Madrid , five Dutch football clubs and four Spanish football clubs ), were also launched after the Commission received information through citizens and/or the press.

[25] Or the Commission decides to open an investigation ex officio pursuant to Procedural Regulation 2015/1589, Article 12(1). However, this is very unlikely, given the lack of priority given by the Commission to sport.

[26] For example, in the case of the Hungarian tax benefit scheme, clubs or associations not active in the sport sector (e.g. theatre clubs, art clubs, etc.), could potentially argue that they have been placed in a disadvantageous position, since they cannot receive donations under the scheme. An aid measure provided in the form of advantageous land transactions, such as the Real Madrid case, could directly affect any undertaking interested in purchasing the same land, or any other plot of land against other market conditions.

[27] Hester den Boer and Bram Logger, “ Een spits van belastinggeld; Onderzoek – Lokale overheden blijven profvoetbal massaal steunen ”, De Groene Amsterdammer, 18 May 2016, page 5.

[28] See for example Oskar van Maren, “EU State Aid Law and Professional Football: A threat or a Blessing?” , European State Aid Law Quarterly, Volume 15 1/2016, pages 31-46.

[29] High profile formal State aid investigations into alleged aid granted by means of selective tax agreements between Member State governments and multinationals like Starbucks, Fiat, Amazon or Apple, have launched in the last few years.

This is the second and final part of the ‘Real Madrid Saga’. Where the first part outlined the background of the case and the role played by the Spanish national courts, the second part focuses on the EU Commission’s recovery decision of 4 July 2016 and dissects the arguments advanced by the Commission to reach it. As will be shown, the most important question the Commission had to answer was whether the settlement agreement of 29 July 2011 between the Council of Madrid and Real Madrid constituted a selective economic advantage for Real Madrid in the sense of Article 107(1) TFEU.[1] Before delving into that analysis, the blog will commence with the other pending question, namely whether the Commission also scrutinized the legality of the operation Bernabeú-Opañel under EU State aid law. By way of reminder, this operation consisted of Real Madrid receiving from the municipality the land adjacent to the Bernabéu stadium, while transferring in return €6.6 million, as well as plots of land in other areas of the city. 

The Commission’s ‘pragmatic’ solution regarding the Operation Bernabéu-Opañel

As was explained in part 1 of this blog, during the formal investigation period (i.e. from 18 December 2013 until 4 July 2016), the operation Bernabéu-Opañel (referred to by the Commission as the ‘2011 urban development agreement’) was firstly suspended by the Madrid High Court (31 July 2014) and later completely annulled (2 February 2015) by that same Court. It is worth reiterating that the Court believed there to be a sufficient link between the 2011 settlement agreement and the operation Bernabéu-Opañel in order to examine the agreements together.[2]

The Commission, however, was actually surprisingly brief on this matter. As can be read from paragraphs 79 and 80 from the decision, “(a)s a result of (the judgment of 2 February 2015), the 2011 urban development agreement has been cancelled between the parties. Consequently, that agreement will no longer be implemented so that the Commission assessment of the 2011 urban development agreement has become without object. The present Decision therefore only examines the 2011 settlement agreement under State aid rules”.[3]

From an EU State aid law perspective, declaring the operation Bernabéu-Opañel “without object” makes sense. With the agreement annulled, there has been no transfer of resources from the State to Real Madrid of any sorts, nor could Real Madrid have obtained an economic advantage from an annulled agreement. Therefore, removing all the problematic aspects of the agreement from a State aid perspective. Yet, it does remain slightly ironic that that the ‘standstill obligation’ was applied to an agreement that was later on never analysed by the Commission. True, the subsequent annulment (based solely on Spanish administrative law) made Commission scrutiny redundant, but one does wonder what the Commission would have decided had the Madrid Court not annulled the operation. 

The 2011 settlement agreement under Article 107(1) TFEU

By way of reminder, in the opening decision, the Commission primarily doubted whether:

1) It was impossible for the Council of Madrid to transfer the Las Tablas property to Real Madrid;

2) This legal impossibility automatically led to an obligation for the Council of Madrid to compensate Real Madrid;

3) A market value of the Las Tablas plot of land has been sought;

4) And whether the value of the properties which were transferred to Real Madrid by the 2011 settlement agreement were market conform.[4]

In reaction to the opening decision Spain argued that transferring the plot in Las Tablas was illegal based on the local urban law 9/2001 of 2001, this interpretation was later confirmed by the Spanish High Court in 2004. Yet, this was already the case in 1998 when the Madrid Council agreed to transfer the land to Real Madrid.[5] Given that Real Madrid had legitimate expectations that it was the owner of the land, it has suffered damages as a consequence of the transfer’s invalidity. As a consequence, Real Madrid needed to be compensated by an amount equal to the market value of Las Tablas in 2011, namely €22.693.054,44. Since this sum was calculated on the basis of an objective model set by the Ministry of Economy and Industry[6], Spain considered that it matched the market value and could not constitute State aid.

The economic advantage criterion according to the market economy operator principle

The Commission’s State aid assessment essentially revolved around the question whether the 2011 settlement agreement between the Council of Madrid and Real Madrid resulted in an economic advantage to the benefit of Real Madrid.[7] As is standard Commission practice[8], “to determine whether a particular transaction carried out by a public authority has been carried out in line with normal market conditions, it is necessary to compare the behaviour of that public authority with that of a similarly situated hypothetical “market economic operator” operating under normal market conditions. If the “market economy operator” would have entered into that transaction under similar terms, then the presence of an advantage may be excluded as regards that transaction”.[9] Referring to EU case law[10], the Commission argued that a prudent market operator would carry out his own ex ante assessment on the basis of sound economic and legal evaluations, when entering such transactions. Public authorities cannot claim that evaluations made after the transaction, based on a retrospective finding that it was actually economically rational, like the Madrid Council did in this case, is the course of action that a prudent market operator would take under similar circumstances.[11]

In continuation, the Commission indicated the two criteria it used in order to determine whether the amount of compensation offered to Real Madrid was in line market conditions:

1) The probability that the Madrid Council would be held liable for its inability to perform its contractual obligations;

2) And the maximum extent of its financial exposure resulting from finding such a liability.[12]

Though these criteria are clearly cumulative, it should be noted that the Commission did not support the criteria with a reference to case law, its own decisional practice or documents of (soft) law. Be that as it may, based primarily on these criteria the Commission concluded that a market economy operator in a similar situation to the Madrid Council would not have entered into the 2011 settlement agreement.

As regards the first criteria, the Commission argued that the Madrid Council should have sought legal advice so as to establish the likelihood that it was indeed liable for not performing its contractual obligations. Without legal advice, the Commission found it hard to believe that a prudent market operator would have assumed full legal liability, especially considering “the legal uncertainties surrounding the potential impossibility to perform (the land transaction), the legal consequences of that potential impossibility, and the Madrid Council’s ability to remedy that legal impossibility through other means”.[13] The Commission seems definitely correct in questioning the chain of events that eventually led to the compensation of more than €20 million. Even though, as Spain now claims[14], it was already legally impossible to transfer the land in 1998, why did the Madrid Council sign this agreement in the first place? After the introduction of local urban law 9/2001, shouldn’t the parties have been aware of the legal impossibility at that moment, or in any case after the 2004 judgment of the Madrid High Court? Consequently, why did the Council wait until 2011 before compensating Real Madrid? In paragraphs 103 and 104, the Commission also drew an interesting comparison with the operation Bernabéu-Opañel. Although this latter operation was declared void by a Spanish Court for not being in line with the general interest, it simultaneously shows that reclassifying a terrain from public to private (sport) use is not entirely legally impossible. In other words, by analogy, the plot in Las Tablas could have been reclassified for private use (provided the reclassification served the general interest) and be legally transferred to Real Madrid.

With regard to the second criteria, i.e. the maximum extent of the Madrid Council’s financial exposure resulting from finding such a liability, the Commission firstly argued that the different valuations of 1998 and 2011 of the land in Las Tablas were based on the mistaken assumption that this land could have been transferred in 2011, which, in hindsight appeared to be legally impossible. “Assuming the Madrid Council could not be held liable for that legal impossibility, for which it never solicited legal advice, it is at least arguable that the market value of the plot in its relationship with Real Madrid would be zero, since the land in question cannot be transferred”.[15] On the other hand, and assuming the Madrid Council is liable and Real Madrid had a right to a compensation, this amount should have been way less than €22 million as a Commission-assigned study concluded. Taking into account the Commission’s consideration that the correct parameter for the valuation of the concerned plot is the long-term exploitation of the land for sport use, the study arrived at a valuation in 2011 of €4.275 million.[16]

For all the above reasons, the Commission established that the Madrid Council had not acted as a prudent market operator. It had not sought legal advice before entering the 2011 settlement agreement, and the subsequent compensation granted to Real Madrid too high. In conclusion, by means of the 2011 settlement agreement, a selective economic advantage was granted to Real Madrid and the State aid criteria of Article 107(1) TFEU were fulfilled. As a result, the amount of aid that Spain was required to recover from the football club amounted to €18.418.054,44 (€22.693.054,44 - €4.275.000) plus interests.[17]

The aftermath

On 2 September 2016, the municipality of Madrid officially ordered Real Madrid to repay €20.3 million, an obligation complied with by the club in early November. Nonetheless, the Real Madrid ‘saga’ has not come to an end. In fact, now that Real Madrid’s appeal is registered by the CJEU, it has become clear that it could take several more years until the case is finally closed. The pending questions are; what are the grounds of Real Madrid’s appeal and could the appeal be successful?

As a preliminary remark, neither Spain nor Real Madrid have claimed that the 2011 settlement agreement falls, or could fall, under one of the exceptions of Article 107(3) TFEU. In principle, this does not prevent Real Madrid from advancing a compatibility plea in front of the General Court, even though it did not raise the argument during the formal investigation.[18] Nonetheless, given the Commission’s wide discretion in applying the exceptions of Article 107(3)[19], the review of the legality of its decision is restricted to determining whether the Commission committed a manifest error in its assessment of the facts or misused its powers.[20] Moreover, as the Commission indicates in paragraph 135 of the decision, the aid granted to Real Madrid is considered as operating aid.[21] In other words, the aid releases an undertaking from costs which it would normally have to bear in its day to day activities.[22] Both the Commission and the CJEU have been very reluctant in permitting operating aid since it rarely facilitates the development of certain economic activities without adversely affecting trading conditions.[23]

In a press-release following the Commission’s announcement of its recovery decision, Real Madrid inter alia argued that the valuation method used in the 2011 settlement agreement is the “only objective method, as it is based in the cadastral value, legally obliging for all Spanish City Councils, and therefore is applied in all transaction between City Councils and third parties whether they are public or private”.[24] The Commission’s final decision takes note of the criticism expressed by Real Madrid regarding the Commission-assigned valuation study, especially concerning the (in its eyes erroneous) valuation method used for the study.[25] Though the Commission rebutted Real Madrid’s criticism[26], it will be up to the General Court of the EU (and potentially later the Court of Justice) to decide whether the Madrid Council used the correct valuation method when determining the 2011 value of las Tablas. This will not be completely new territory for the General Court, given the rich jurisprudence available on valuation methods.[27] As regards the standard of review applied by the General Court, Conor Quigley argues that “where the Commission is found by the Court to have committed a sufficient error of assessment, the decision will be annulled”.[28] It is settled EU case law, that the valuation method must be based on the available objective, verifiable and reliable data, which should be sufficiently detailed and should reflect the economic situation at the time at which the transaction was decided, taking into account the level of risk and future expectations.[29] The General Court remains, however, entitled to fully review and assess the valuation methods presented by the Commission and the interested parties.[30]

The Real Madrid case is too complex and intertwined to draw definitive conclusions on the possible outcome of the appeal. Nonetheless, the thorough State aid assessment conducted by the Commission in its decision should not be underestimated. This will be a tough “legal match” on an entirely new turf for Real Madrid.

[1] By way of reminder, Article 107(1) TFEU reads: “Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market”.

[2] See Oskar van Maren, “The EU State aid and sport saga: The Real Madrid Decision (part 1)”, Asser International Sports Law Blog, 15 November 2016.

[3] Commission decision SA.33753 of 4 July 2016 on the State aid implemented by Spain for Real Madrid CF, paras. 79 and 80.

[4] Commission decision SA.33753 of 18 December 2013, State aid– Spain Real Madrid CF, paras. 41-43.

[5] Interestingly enough, Spain’s comments contradict Real Madrid’s comments, according to which, as can be read in paragraph 46 of the decision, Spanish law did allow Las Tablas to be reclassified for private use in 1998 and beyond until a specific law that prohibits that was introduced in 2001.

[6] Commission decision SA.33753 of 4 July 2016 on the State aid implemented by Spain for Real Madrid CF, paras. 29-36.

[7] Since it was clear State resources were transferred, that the measure was selective and that it at least had the potential of affecting intra-Union trade, the other criteria of Article 107(1) TFEU were only briefly discussed.

[8] See also e.g. Commission decision SA.41613 of 4 July 2016, on the measure implemented by the Netherlands with regard to the professional football club PSV in Eindhoven.

[9] Commission decision SA.33753 of 18 December 2013, State aid– Spain Real Madrid CF, para. 88.

[10] Case C-124/10 P Commission v. EDF ECLI:EU:C:2012:318, paras. 84, 85 and 105.

[11] Commission decision SA.33753 of 18 December 2013, State aid– Spain Real Madrid CF, para. 89.

[12] Ibid, para. 92.

[13] Ibid, para. 94.

[14] Ibid, para. 29.

[15] Ibid, para. 108.

[16] Ibid, paras. 111-112.

[17] Ibid, paras. 139-142.

[18] See for example T-110/97 Kneissl Dachstein v Commission ECLI:EU:T:1999:244, para. 102.

[19]Case T-304/08 Smurfit Kappa Group v Commission ECLI:EU:T:2012:351, para. 90.

[20] Conor Quigley, “European State Aid Law and Policy”, Hart Publishing, 3^rd edition (2015), pages 738-739. See also for example T-20/03 Kahla/Thüringen Porzellan v Commission, ECLI:EU:T:2008:395, para. 115.

[21] Commission decision SA.33753 of 18 December 2013, State aid– Spain Real Madrid CF, para. 135.

[22] See for example Case C-172/03 Heiser ECLI:EU:C:2005:130, para. 55.

[23] Quigley, page 276.

[24] Real Madrid further found it surprising that the Commission used a valuation made by an architect’s office in Barcelona to dictate their decision. Though many will find this comment by Real Madrid rather amusing, it once again shows that the rivalry between the two clubs (and cities) far exceeds the performances on a football field.

[25] Commission decision SA.33753 of 18 December 2013, State aid– Spain Real Madrid CF, para. 89.

[26] Ibid, paras. 119-128.

[27] See for example T-366/00 Scott v Commission ECLI:EU:T:2007:99; and C-239/09 Seydaland Vereinigte Agrarbetriebe ECLI:EU:C:2010:778.

[28] Quigley, page 737. Based on the case law of the Court, it is not entirely clear whether a “sufficient error of assessment” by the Commission is enough for the Court to annul the decision.

[29] T-366/00 Scott v Commission ECLI:EU:T:2007:99, para. 158. See also Commission Notice C 262/1 of 19 July 2016 on the notion of State aid as referred to in Article 107(1) of the Treaty on the Functioning of the European Union, para. 101.

[30] Case T-274/01 Valmont v Commission ECLI:EU:T:2004:266.