A Guide To How 'State Aid' Law Impacts European Sports Organisations

"Sport is part of every man and woman's heritage and its absence can never be compensated for." – Pierre de Coubertin (founder of the International Olympic Committee)

Article 165 of the Treaty on the Functioning of the European Union (TFEU) acknowledges the social significance of sport: "The Union shall contribute to the promotion of European sporting issues, while taking account of its specific nature, its structures based on voluntary activity and its social and educational function".

Sport is also an important economic activity for the European Union (EU). Sport-related GDP equals 2.12% of the total GDP in the EU.[1] Moreover, employment in the EU sporting world combines around 5.76 million people, which equals to 2.72% of total EU employment.[2]

In the 1970s, the Court of Justice of the European Union (CJEU) established that the practice of sport is subject to EU laws only in so far as it constitutes an economic activity.^[3] Yet it was only after the Bosman case,^[4] that application of EU law to sports intensified. The CJEU underlined in this judgement that sport is an economic activity when players are in gainful employment or when they provide a remunerated service. In the wake of Bosman, European sports law emerged.

Even though sports infrastructures or sports clubs have always benefited directly or indirectly from public funds, the application of EU State aid rules to the sport sector only started being assessed in a more systematic manner in the last two decades. Indeed, the Commission’s stance has been that it first needed to deal with a few individual cases before it could clarify how to apply State aid rules to the sports sector more broadly.[5]

The purpose of this article is to explain why and how the State aid rules are applicable to the sports sector.  Specifically, it examines:

• What exactly is ‘State aid’?;
• How do State aid rules apply to the sports sector (possibilities and risks)?;
• Rules on State aid to assist sports infrastructure projects;
• Rules on State aid to assist sports clubs (inc. the investigations into Dutch and Spanish football clubs);

This review is based on State aid rules as applied by the European Commission (Commission) and interpreted by the European Courts. The implications of Brexit on the State aid rules to be applied within the UK are not analysed hereafter as they are not yet known. A public consultation has been launched by the UK government regarding its future Subsidy Control regime, open until the end of March 2021.[6]

Please note that a separate but related article by the authors (available here) explains how State aid rules have been adapted to allow for additional State help to deal with Covid-19, and what this means for the sports sector.