State aid in Spanish football - EU General Court overrules European Commission on Barcelona and Real Madrid decisions

On 4 July 2016, the European Commission hit a number of Spanish clubs – Real Madrid and FC Barcelona being the most prominent – with State aid decisions finding that they had received illegal subsidies.1 There were in fact three separate cases concerning alleged tax breaks, property transactions and loan guarantees that were all wrapped up in what broadcaster Sky Sports might have billed as “Super State Aid Day”.2 For the full background to these decisions, please see the author’s 2016 analysis, available here3.

The EU General Court has however now reversed two of these decisions in a series of judgments this year.  This article provides an overview of the rulings to date and what lessons sports organisations can draw from them. Specifically, it looks at:

• A primer on EU State aid law.

• FC Barcelona’s appeal – relating to the "selective advantage" they were deemed to receive via their exemption from the new Spanish sports tax regime.

• Real Madrid’s appeal – relating to the "Las Tablas" property deal, wherein a land swap with Madrid City Council was deemed to constitute State aid.