State Aid & Football Clubs: Do they really need the money?

With transfer window spending on the up accompanying multi million (and sometimes billion) pound TV deals, one would assume clubs are flush with money to spend. 

However, the advent of Financial Fair Play has refocused a club’s objectives to balance their books. This has been backed up with the European Commission (the Commission) looking closely into a number of transactions involving clubs like Real Madrid and PSV Eindhoven in order to assess whether they have benefited from favourable treatment from public authorities.

The press release describes state aid as involving “the use of public resources [to] provide an advantage to entities carrying out economic activities. The measures are likely to distort competition and to affect trade between Member States. They are therefore in principle incompatible with the EU Single Market.”

The test used by the authorities is whether a private investor would have acted in the same way in the particular circumstances. In the majority of examples set out in the press release, Dutch municipalities waived debts, lowered rents or bought back land. PSV are reported to have received €48.3 million from the Municipality of Eindhoven when it bought land from PSV and leased it back to the club. Similarly, Real Madrid may also soon be under formal investigation for payments the Madrid Council made to the club as part of a property transaction in the late 90’s which was only recently adjusted to provide an additional reported €22.7m to the club. There are also question marks over West Ham’s move to the Olympic stadium with Newham Council contributing over £40m+ as part of a profit sharing scheme.

The consequences of the state providing assistance to clubs could lead to repayment of the illegal aid plus interest. The aim of the remedy is to remove the unfair advantage granted to the club and to restore the market to its original state before the aid was granted.

In an age of the £85m+ player transfer, the public may not have too much sympathy for clubs having to pay back public money. Some may question why it was given in the first place.

Recent Posts

What a No-Deal Brexit may mean for Future Football Transfer Windows

By Judith McMinn, Owen Jones and Daniel Geey Introduction Halloween is likely to be upon us sooner than we think and with it comes the very real prospect of crashing out of the EU without a deal. The authors appreciate that the broader and more critical issues of the Irish border, food shortages, medical supply […]

Read More →

Premier League Club Broadcasting Monies: The Key Numbers

I had the pleasure of spending some time looking through a number of incredibly impressive and illuminating Swiss Ramble Twitter threads detailing past, present and (projected) future Premier League (EPL) and Champions League (UCL) broadcasting revenue figures. There was some fascinating detail and I wanted to highlight some of the significant numbers involved. £9.2bn: This […]

Read More →

The Changing Game: Done Deal Extract

This is the introduction extract from my football industry book Done Deal. How we consume football has changed dramatically over the years. When I was growing up in the 1980s, watching live football was a novelty. Only the occasional game was broadcast on television and, in contrast to today, few column inches were devoted to […]

Read More →

The Book

Done Deal

An Insider's Guide to Football Contracts, Multi-Million Pound Transfers and Premier League Big Business Insightful, enlightening and thought-provoking, leading Premier League lawyer Daniel Geey lifts the lid on the inner workings of modern football.

Whether it is a manager being sacked, the signing of a new star player, television rights negotiations, player misconduct or multi-million-pound club takeovers, lawyers remain at the heart of all football business dealings. Written by leading Premier League lawyer Daniel Geey, who has dealt with all these incidents first hand, this highly accessible book explores the issues – from pitch to boardroom – that shape the modern game and how these impact leagues, clubs, players and fans.

Buy Book