On 4 July 2016, the European Commission decided that support measures granted by several Dutch municipalities to football clubs do not breach State aid rules.
This marks the end of a long in-depth investigation into these measures started by the Commission in 2013.
In the years 2011 and 2012 some Dutch football clubs experienced financial problems, namely PSV, Den Bosch, MVV Maastricht, NEC and Willem II. The municipalities of these clubs decided to take measures to support them. The support these clubs received from their respective municipalities took different forms.
The municipality of Eindhoven entered into a sale and leaseback transaction with PSV. This transaction entailed that the municipality of Eindhoven (i) bought the land on which the Philips stadium and a training block were built for a price of EUR 48,385,000 and (ii) leased it back to the football club.
The other four clubs received direct financial aid from their respective municipalities. The municipality of Maastricht for instance waived a claim of EUR1.7 million on MVV Maastricht and bought the football stadium and training grounds for EUR 1.85 million. The municipality of Tilburg lowered the rent of the stadium with retroactive effect, resulting in a total advantage for Willem II of EUR 2.4 million.
However, there were conditions attached to the aid granted to the four clubs. The football clubs contributed significantly to the costs of their restructuring and agreed to limit the negative effects of the support measures on the market for example by reducing the number of employees, the number of registered players and players' wages.
The Commission found that the transaction between the municipality of Eindhoven and PSV had been carried out on terms acceptable to a market investor, and therefore did not constitute aid. In its assessment, the Commission took account of an independent external valuation report that was used by the municipality as a basis of the transaction. However, the Commission concluded that the support measures to the other football clubs constituted State aid, which is compatible with the European market since it complies with the Guidelines on State aid for rescuing and restructuring firms in difficulty due to the conditions attached to the aid.
As a result of the Commission's decision, no State aid has to be recovered by the municipalities from the football clubs in question. This stands in stark contrast with the case about the State aid granted to Spanish football clubs. Spain has to recover large amount of aid from Spanish football clubs.
This article was published in the Competition Law Newsletter of August 2016. Other articles in this newsletter:
- Court of Justice clarifies the legality of royalty payments in the event of revocation or non-infringement of the licensed patent
- General Court confirms fines imposed on the basis of economic continuity in maritime hose cartel
- European Commission imposes record cartel fine on truck manufacturers for price fixing
- European Commission deems support measures in favour of Dutch football clubs in line with State aid rules
- Dutch District Court ruled that parent companies cannot be held liable for damages arising from antitrust infringements committed by their subsidiaries
- ACM lowered fines in the pepper cartel case
- Dutch Supreme Court confirms the availability of a passing-on defence in antitrust damages litigation
- Brussels Court of Appeal rules that concerted lobbying efforts of cement producers do not breach competition law
- Belgian competition authority upholds licence refusal to football club White Star
Source: Competition Law Newsletter August 2016