Real Madrid and Barcelona are among the seven Spanish clubs the European Commission will charge with alleged state aid today, after a damning indictment of the EC’s handling of the case by its independent regulator.
The EC’s decision finally to push ahead with the investigation came less than a day after the European ombudsman, an independent adjudicator with some power over European institutions, gave notice that it would go public on its frustration at the snail’s-pace inquiry.
The ombudsman yesterday made the announcement nonetheless, attacking the EC for having “failed to act” for more than four years of “bad administration” over the complaint of alleged illegal state aid to Spanish clubs.
Real Madrid are under investigation for alleged state aid over a land deal with Madrid city council.
The EC have been looking at the tax-status of Real Madrid, Barcelona, Athletic Bilbao and Osasuna, who were exempted in 1990 from Spanish government legislation that required not-for-profit sports clubs to become public limited companies.
Emily O’Reilly, the ombudsman, launched a veiled attack on the European competitions commissioner, Joaquin Almunia, an avowed Bilbao fan.
In a statement, the office of the ombudsman, based in Strasbourg, said: “To the European public it can look like a conflict of interest given the commissioner’s strong links to one of the football clubs in question.”
She added: “According to the complainant, these advantages [gained through illegal state aid] amount to several billion euros. He also noted that Spain is granting these tax advantages even as it requests hundreds of billions of euros from Eurozone taxpayers.”
Almunia is expected to outline today the three cases against the seven clubs, who also include Valencia and Elche, in Spain’s top division, and Hercules, in the second division, at a press conference in Brussels.
There is also an investigation into the financing of Bilbao’s San Mames Barria Stadium.
The clubs will have three months to respond before the EC will be expected to uphold a decision.
Under the terms of the land deal with Madrid city council, Madrid could well be forced to pay back money on a land deal related to their efforts to redevelop the area around the Bernabeu Stadium into a shopping mall and hotel complex.
Should the four clubs favoured with not-for-profit, non-plc status be found to have contravened rules, they, including Madrid and Barcelona, will be forced to give up their status as member-owned clubs.
