L_2016357EN.01000101.xml
| 28.12.2016 | EN | Official Journal of the European Union | L 357/1 |
COMMISSION DECISION (EU) 2016/2391
of 4 July 2016
on the State aid SA.29769 (2013/C) (ex 2013/NN) implemented by Spain for certain football clubs
(notified under document C(2016) 4046)
(Only the Spanish text is authentic)
(Text with EEA relevance)
THE EUROPEAN COMMISSION,
Having regard to the Treaty on the Functioning of the European Union, and in particular the first subparagraph of Article 108(2) thereof,
Having regard to the Agreement on the European Economic Area, and in particular Article 62(1)(a),
Having called on interested parties to submit their comments pursuant to Article 108(2) of the Treaty (1) and having regard to their comments,
Whereas:
1. PROCEDURE
| (1) | In November 2009, detailed information sent by citizens drew the attention of the Commission to a possible preferential corporate tax treatment of the four Spanish sport clubs Athletic Club Bilbao, Club Atlético Osasuna (Navarra), FC Barcelona and Real Madrid CF in comparison to sport limited companies. Spain was asked to comment on 15 February, 12 April and 28 September 2010. Comments were received on 23 March and 15 December 2010. |
| (2) | By letter dated 18 December 2013, the Commission informed Spain that it had decided to initiate the procedure laid down in Article 108(2) of the Treaty on the Functioning of the European Union in respect of the aid (‘the opening decision’). By letter dated 17 February 2014, Spain provided comments on that decision. On 17 December 2015, Spain provided additional information. |
| (3) | The Commission decision to initiate the procedure (the opening decision) was published in the Official Journal of the European Union (2). The Commission invited interested parties to submit their comments on the aid/measure. |
| (4) | The Commission received comments from interested parties. It forwarded them to Spain, which was given the opportunity to react; its comments were received by letter dated 21 November 2014. |
2. DETAILED DESCRIPTION OF THE AID
2.1. THE MEASURE
| (5) | Article 19(1) of the ‘ley del deporte’ of 1990 (3) (Law 10/1990) obliged all Spanish professional sport clubs (clubes deportivos) to convert into sport limited companies (sociedades anónimas deportivas). The justification for the measure was that many clubs had been managed badly because neither their members nor their administrators bore any financial liability for economic losses. The purpose was to establish with the new sport limited company a model of economic and legal responsibility for clubs which perform professional activities, in order to increase their chance for good management. |
| (6) | The ‘Seventh Additional Disposition’ (hereinafter ‘DA 7a’) of Law 10/1990 exempts from this obligatory conversion those football clubs which had a positive balance in the preceding 4-5 years. The exemption is, according to the preamble of the law, based on the fact that these clubs have shown ‘a good corporate management’ and would not need that switch. They may maintain their current legal structure of a club unless their assemblies agree to the contrary (4). |
| (7) | It turned out that the only clubs fulfilling this condition were Athletic Club Bilbao, Club Atlético Osasuna (Navarra), FC Barcelona and Real Madrid CF. The law does not explicitly mention by name these four clubs that eventually benefited from this exemption. They did not convert into a sport limited company although they would be entitled to do so. |
| (8) | The fiscal treatment of sport clubs deviates from the fiscal regime applicable to sport limited companies, which are subject to the general regime of corporate taxation of companies. Sport clubs are non-profit entities (Entidades sin ánimo de lucro) which as such qualify for a partial corporate tax exemption according to Article 9(3)a) of the Spanish Corporate Tax Law (Ley del Impuesto sobre Sociedades). As a result of this partial exemption, Article 28(2) of the Corporate Tax Law provides that the exempted clubs, as non-profit entities, shall pay corporate tax for their commercial income at a reduced rate of 25 % instead of the general rate of 30 % (having been 35 % until 2006 and 32,5 % in 2007). |
| (9) | The Spanish Sports Law does not include a time period for a possible re-assessment of this specific treatment. Thus, only the originally qualified four teams have the option of benefitting from a fiscally favourable status of ‘sports club’, irrespective of how the financial health of the other teams evolves. No commercially viable team may reconvert to club status either. |
| (10) | The four clubs conduct profit oriented professional activities. For example, in the 2013/2014 season, Real Madrid CF earned revenues of EUR 549 million and FC Barcelona EUR 484 million (5). The revenues derived from the sale of broadcasting rights, from sponsoring, merchandising (sale of club related articles like replica shirts) and licensing, and from so called match day revenues (ticket sales and other revenues generated in the stadium). Both clubs have been leading the European Premier League clubs in terms of revenues for several years. Athletic Club Bilbao has constantly been playing in the Spanish first league and regularly participates in international competitions, like the Champions League. Also Club Atlético Osasuna played in the first league until the season 2012/2013, when it was relegated to the second league (Segunda Division) of the National Professional Football League, and participated occasionally in European competitions of professional clubs. |
| (11) | In the opening decision, the Commission described that at least Real Madrid CF and FC Barcelona had taxable profits in the years after 2000. Also the annual reports of, for example, Real Madrid CF show earnings before taxes of EUR 25 million for the 2008/2009 season, EUR 31 million for 2009/2010, EUR 47 million for 2010/2011, EUR 32 million in 2011/2012 and EUR 47 million in 2012/2013. Those figures suggest considerable taxable revenues for the last years, at least for Real Madrid CF, where a different tax rate of 25 % instead of 30 % may lead to an economic advantage against its competitors. |
2.2. GROUNDS FOR INITIATING THE PROCEDURE
| (12) | In the opening decision, the Commission determined that the football clubs concerned qualify as non-profit organisations. That does not exclude their qualification as undertakings according to Article 107(1) of the Treaty. The supported professional sport activities are of a commercial nature (6). Those revenue-generating activities are economic in nature and conducted in fierce competition with the other large European professional football clubs. The sources of revenue are linked to the teams' success in sport competitions. In turn, that success very much depends on the amount of funds available to clubs to attract or keep the best players and coaches. |
| (13) | Tax differentiation may selectively favour the four clubs. The Commission therefore preliminarily concluded in the opening decision that the four sport clubs in question enjoy an advantage in the form of a preferential tax rate which is not justified by the nature of the tax system. The tax differentiation between them and other clubs is an effect which is caused by Law 10/1990, which singled out a limited number of beneficiaries. The Commission furthermore found that that advantage derives from State resources, as the State forgoes possible tax revenues and that aid to professional football clubs has an effect on competition and trade between Member States. |
| (14) | The Commission preliminarily concluded in the opening decision that the financial State support providing an advantage to the professional sport clubs Athletic Club Bilbao, Club Atlético Osasuna (Navarra), FC Barcelona and Real Madrid CF will, in all likelihood, have the potential to distort competition and affect trade. Thereby it constitutes State aid in the meaning of Article 107(1) of the Treaty. |
| (15) | The Commission expressed doubts regarding the compatibility of the aid with the internal market. It also found that no guidelines on compatibility criteria seem to be applicable to the present case. Therefore, compatibility should be assessed directly under Article 107(3)(c) of the Treaty, according to which aid may be considered compatible with the internal market if it facilitates, in the common interest, the development of certain economic activities or of certain economic areas. |
| (16) | The Commission doubted that there would be an objective of common interest which could justify selective operating support to very strong actors in a highly competitive economic sector. Accordingly, the Commission considered in the opening decision that by means of the scheme introduced by Law 10/1990, Spain grants individual operating aid through a preferential tax rate to four sport clubs Athletic Club Bilbao, Club Atlético Osasuna (Navarra), FC Barcelona and Real Madrid CF which cannot be justified under Article 107(3)(c) of the Treaty. The Commission invited Spain and interested parties to provide comments. |
3. COMMENTS FROM INTERESTED PARTIES
| (17) | Following the publication of the opening decision, the Commission received observations from Real Madrid CF, FC Barcelona, Athletic Club Bilbao, the Liga Nacional de Fútbol Profesional, from a citizen and from organisations desiring that their identity is treated as confidential. |
3.1. GENERAL OBSERVATIONS
| (18) | The Liga Nacional de Fútbol Profesional refers to the special status of sport under Article 165 of the Treaty. It claims that Law 10/1990 simply wanted to introduce a voluntary system of social responsibility for clubs. The Liga maintains that |
...
