{"id":23946,"date":"2025-04-30T13:44:04","date_gmt":"2025-04-30T11:44:04","guid":{"rendered":"https:\/\/valloni.ch\/2025\/04\/30\/state-aid-in-sport-under-eu-law\/"},"modified":"2025-05-04T16:08:56","modified_gmt":"2025-05-04T14:08:56","slug":"state-aid-in-sport-under-eu-law","status":"publish","type":"post","link":"https:\/\/valloni.ch\/de\/2025\/04\/30\/state-aid-in-sport-under-eu-law\/","title":{"rendered":"STATE AID IN SPORT UNDER EU LAW"},"content":{"rendered":"

\"\"\"\"<\/a><\/p>\n

State aid control\u00a0plays a crucial role in ensuring that\u00a0public resources are used fairly and efficiently\u00a0within the European Union (EU).<\/p>\n

Whilst the EU role in sport is limited to\u00a0supporting national policies\u00a0(Article 165 Treaty on the Functioning of the European Union (TFEU)), this does not prevent the application of EU competition law when sport involves\u00a0economic activity. In the field of sport, EU State aid rules, particularly\u00a0Articles 107 and 108 TFEU, aim to prevent selective advantages that could distort competition and affect trade between Member States.<\/p>\n

According to\u00a0Article 107(1) TFEU:<\/p>\n

„Any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings […] shall, in so far as it affects trade between Member States, be incompatible with the internal market.“<\/em><\/p>\n

However,\u00a0Article 107(2) and (3) TFEU\u00a0provides for exceptions where aid pursues\u00a0social, cultural, economic, or regional development\u00a0objectives in the common interest.<\/p>\n

Article 108 TFEU\u00a0further entrusts the European Commission with the task of monitoring and assessing the compatibility of State aid measures and requires Member States to\u00a0notify planned aid in advance.<\/p>\n

EU competition policy seeks to maintain a\u00a0level playing field, preventing the creation of „national champions<\/em>“ through State subsidies. In the sports sector, this means ensuring that publicly funded support does not unfairly disadvantage competing clubs or entities, thereby preserving fair competition, which is the very essence of sport.<\/p>\n

The\u00a0European Commission has the authority to investigate State aid measures benefiting professional sports clubs or sports infrastructure. It assesses whether the aid confers an\u00a0economic advantage; whether it is\u00a0selective; and whether it\u00a0distorts competition\u00a0or affects trade between Member States.<\/p>\n

To determine whether public financial support complies with EU law, the Commission applies a\u00a0\u201cbalancing test<\/em>\u201d\u00a0that weighs the potential negative effects on competition against the positive impact of achieving a recognised objective of common interest.<\/p>\n

EU State aid rules in the sports sector generally fall into three main categories:
\n\u2013\u00a0Funding for professional football clubs\u00a0(for example, grants, loan guarantees, or land deals);
\n\u2013\u00a0Funding for sports infrastructure, such as stadium construction or renovation;
\n\u2013\u00a0Preferential tax treatment, such as the reduced corporate tax rate challenged in\u00a0the FC Barcelona<\/em>\u00a0case (C-362\/19 P), which is discussed below.<\/p>\n

These categories are reflected in recent Commission decisions and case law, as detailed below.<\/p>\n

In recent years, decisions concerning\u00a0State aid for sports infrastructure\u00a0have shown a consistent and generally favourable approach from the Commission.<\/p>\n

This favourable approach reflects the Commission recognition of the \u2018specificity of sport\u2019 and its reference to Article 165 TFEU to justify support measures aligned with the common interest. Relying upon principles, such as\u00a0transparency,\u00a0non-exclusivity, and\u00a0proportionality, the Commission has translated these into clear operational criteria. This approach was formalised in the\u00a02014 General Block Exemption Regulation (GBER), which identifies the types of sports-related investments eligible for simplified procedures and\u00a0exemption from prior notification.<\/p>\n

One illustrative case is the aid granted by France for the preparation of\u00a0UEFA Euro 2016. The measure concerned nine of the ten host venues, including the\u00a0construction of four new stadiums, in Bordeaux, Lille, Lyon and Nice, and the\u00a0renovation of five existing ones, the Parc des Princes in Paris, the Geoffroy-Guichard stadium in Saint-\u00c9tienne, the V\u00e9lodrome in Marseille, the municipal stadium in Toulouse, and the Bollaert stadium in Lens.<\/p>\n

France planned to invest approximately\u00a0\u20ac1.052 billion (around Sw. Frs 987 million)\u00a0\u00a0\u00a0\u00a0\u00a0 through a combination of State and local subsidies to support these projects. The European Commission authorised this funding in its Press Release of 18 December 2013 (IP\/13\/1288<\/em>), recognising that it served an objective of common interest without unduly distorting competition, particularly since the stadiums would remain in use after the event for professional clubs and the wider public.<\/p>\n

Another case worthy of mention involved FC Real Madrid in a complicated land deal with the Madrid City Council, whereby the club exchanged land for another plot on favourable financial terms. This eventually led to a dispute about State aid.\u00a0The European Commission initially considered that the transaction as illegal State aid.\u00a0However, in subsequent court proceedings, the EU General Court ruled that the club did not receive State aid and, on 22 May 2019, overturned the Commission decision (Real Madrid Club de F\u00fatbol v European Commission (Case T\u2011791\/16)<\/em>.<\/p>\n

In contrast, the European Commission has adopted a much stricter stance in cases involving\u00a0individual professional football clubs\u00a0receiving public support without any transparency or prior notification.<\/p>\n

A key legal development in this area is the judgment of the Court of Justice of the European Union (CJEU) in the\u00a0FC Barcelona <\/em>case\u00a0(C-362\/19 P, 4 March 2021).\u00a0The CJEU confirmed that the preferential tax regime granted to four Spanish football clubs, including FC Barcelona and Real Madrid, constituted unlawful State aid under Article 107(1) TFEU. Most importantly, the CJEU clarified that the existence of an \u201cadvantage\u201d must be assessed\u00a0ex ante<\/em>, at the time the measure is granted, not in the light of future uncertain outcomes. The Commission may thus determine the existence of an aid based on the structure and legal effects of the measure, without having to prove that it actually resulted in a lower tax burden year by year.<\/p>\n

This ruling reinforces the Commission approach to aid control and underlines the importance of the\u00a0notification obligation\u00a0under Article 108(3) TFEU, which is essential for preserving fair competition in the EU internal market.<\/p>\n

More broadly, the evolving legal landscape also includes significant developments outside the EU. Since the United Kingdom withdrawal from the EU, EU State aid rules no longer apply directly to the UK. The UK has introduced its own subsidy control regime, notably under the Subsidy Control Act 2022. Whilst the British legal framework draws inspiration from EU principles, such as transparency, proportionality, and impact on competition, it operates independently and is subject to national institutions rather than the European Commission. This shift introduces a new layer of legal divergence, especially relevant for clubs and investors operating across borders.\u200b<\/p>\n

The growing importance of EU State aid control in the sports sector, ensuring that public funding aligns with internal market rules, cannot be overlooked. Whilst the EU recognises the social and cultural value of sport under Article 165 TFEU, financial support measures must remain transparent, proportionate, and non-distortive.\u00a0The Commission decisions and the CJEU rulings confirm that even in high-profile sectors like professional football, economic balance and compliance with EU law prevail over political or popular considerations.\u200b<\/p>\n

We advise on all aspects of EU Competition Law and Sport, including State aid cases, and further information may be obtained from Dr Estelle Ivanova, by emailing her at ivanova@valloni.ch<\/a>.<\/strong><\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

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