BRUSSELS: Real Madrid have become the latest leading club embroiled in the European Commission’s investigation into illegal state aid in football.
The Spanish champions are alleged to have received a favourable deal for land around the Santiago Bernabeu stadium from Madrid City Council as it seeks to develop a new shopping and hotel complex.
It has been claimed that the initial 1996 agreement was a cause of illegal state aid under article 87 of the Treaty of the European Community. The council is said to have over-estimated its debt to the club so it could grant Madrid the prime city-centre land required for the development.
Last month the EC opened an in-depth investigation into allegations of misuse of public funding at five Dutch clubs, including Holland’s PSV Eindhoven.
PSV, along with NEC Nijmegen and Willem II Tilburg, were pinpointed by the commission along with MVV Maastricht and FC Den Bosch.
The commission’s investigation is designed to establish whether the measures taken by the five Dutch municipalities in favour of the clubs comply with EU state aid rules. None of those measures, taken in 2010 and 2011, were notified to the xommission, which said it was alerted by “concerned citizens”.
It is also looking at measures in other member states which were brought to its attention and sent a request for information to all member states concerning professional football in October 2012.
At the time Joaquin Almunia, the commission’s vice-president in charge of competition policy, said: “I strongly believe that professional football clubs should be well managed and not ask for help from the tax-payer when facing financial difficulties. If financial support is nevertheless given, then it should be granted under the EU State aid rules for aid to companies in difficulty.”
Commenting on Madrid’s inclusion in the investigation, Antoine Colombani, a spokesman for competition policy at the EC, told a briefing: “Citizens and companies in several member states have sent information to the Commission alleging state aid to various football clubs.
“The Commission is examining the situation of Real Madrid as it does with similar allegations that are brought to its attention. The Commission is currently studying the information at its disposal and has not yet decided whether to open a formal investigation.”
The Madrid investigation centres upon an area of land in the north of the city, Las Tablas. Originally valued at €421,000 when it was part of a payment by the council to the club in 1998; the same land was then valued at €22.7m in 2011, a 5,400pc rise, when the council decided it had to take it back after a re-assessment of land classification.
Instead of the €22.7m payment, the club is alleged to have been given the land it needed around the Bernabeu.
Madrid told the newspaper it had not received “any special privileges in its real estate activities since it has always been subject to the then current legislation and has received the same treatment as any other entity.”
The club added: “Acting like this, MCC, through the agreement with Real Madrid, has protected the municipal interests, avoiding judicial proceedings that when executed would have foreseeably resulted in an obligation to provide Real Madrid with a higher amount of compensation.
“The valuation of all the properties have increased due to the time lapse between the different valuation that in some cases exceeds 10 years, the degree of evolution of the urban development process and the evolution of property prices.”
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