State aid in Spanish football - EU General Court annuls European Commission decision on Valencia CF & Elche CF
Between 2009 and 2011, the Instituto Valenciano de Finanzas - the financial institution of the Region of Valencia in Spain - granted a number of guarantees to the football club foundations to cover bank loans taken to finance an increase of the capital of three football clubs: Valencia CF, Hércules CF, and Elche CF. In 2010, the guarantee granted to Valencia CF was increased in order to cover the increase of the bank loan.
On 4 July 2016, the European Commission adopted a decision against the three clubs finding that the public guarantees for loans from commercial banks entailed incompatible state aid and required the three Spanish football clubs to recover the aid:  Valencia (20.4 million euros), Hércules (6.1 million euros) and Elche (3.7 million euros).
The three clubs each brought actions for annulment against the Commission Decision before the EU General Court. On 12 March 2020, the EU General Court delivered two judgments by which it annulled the Commission Decision in relation to Valencia CF and Elche CF. The EU General Court had annulled the Commission Decision in relation to Hércules CF on 20 March 2019.
This article provides an overview of the rulings and what lessons can be drawn from them. Specifically, it looks at:
- Brief recap on State aid rules and Sport
- State aid issues assessed by the EU General Court
- The application of the state aid rules to sports
- A public bank guarantee on a commercial loan can entail state aid
- Evaluation of whether the football clubs were in difficulty
- Evaluation of whether a public guarantee for a commercial loan entails an advantage
- The burden of proof for the existence of an advantage
- Analysis and comment
By way of disclosure, the authors acted for Elche CF in the proceedings.
Continue reading this article...
Already a member? Sign in
Get access to all of the expert analysis and commentary at LawInSport including articles, webinars, conference videos and podcast transcripts. Find out more here.
- Tags: Competition Law | Dispute Resolution | EU General Court | European Commission | European Union | Football | Spain | State Aid | Treaty on the Functioning of the European Union (TFEU)
- State aid in European football: A review of the EC’s ruling on Real Madrid, FC Barcelona and Valencia CF
- State aid in Spanish football - EU General Court overrules European Commission on Barcelona and Real Madrid decisions
Marianne Clayton, is one of the founders of the law firm Clayton & Segura specialised in state aid. She is a member of the Paris and Brussels Bar (Liste E). Former senior officer at the Competition and State Aid Directorate at the EFTA Surveillance Authority, Marianne Clayton has over 15 years of state aid experience within the regulators and major international law firms. Marianne Clayton graduated in law at the Universities of Kings College and Paris I – Sorbonne.
Maria Segura, founder of the law firm Clayton & Segura, specialised in state aid, is a member of the Madrid and Brussels Bar (Liste E). Former Deputy Director of the Competition and State Aid Directorate of the EFTA Surveillance Authority, Maria Segura has been exclusively dedicated to state aid matters for twenty years also serving in different positions within the European Commission. She graduated in Law at the University of Zaragoza (Spain) and earned an Ll.M.Eur from the Europa Institut (Germany).