WRITTEN QUESTION E-0537/03

by Erik Meijer (GUE/NGL) to the Commission

(26 February 2003)

Subject: Local authority subsidies paid to football clubs run as businesses in order to help them to remain competitive and to make extremely high payments to players

1. Does the Commission still see any genuine difference between football clubs and other commercial undertakings, given that, in recent decades, football has rapidly changed from being a leisure activity, played by amateurs under the auspices of an association of clubs, via professional football, with footballers becoming employees of non-commercial undertakings, to becoming a branch of the entertainment industry, with some clubs even being listed on the Stock Exchange?

2. How does the Commission view the fact that local authority subsidies to football clubs, which were essential in an era when the sport was still a voluntary recreational activity, with the populace closely identifying with their local amateur clubs, are still being paid and, in some cases, increased in a period of commercial exploitation, competition and extremely highly paid professional footballers?

3. Does the Commission agree with me that the current manner in which subsidy relationships operate principally results in commercial profits being retained by the clubs, with any risks or losses being borne by taxpayers, that competition with other commercial organisations is being supported from the public purse and that this supports the clubs in their efforts to lure professional footballers away from each other by promising them extremely high salaries?

4. In the current situation, does the Commission deem it desirable to protect local authorities from the increasing pressure under which they find themselves to help their local clubs to succeed against the competition as far as possible by means of financial injections? Is it seeking to restrict local authority subsidies geared towards competition instead of towards recreation as far as possible to amateur clubs with no commercial background?

5. How does the Commission intend to eliminate the lack of clarity and conflicts of interpretation which constantly recur with regard to its attitude to one-off subsidies for investment by football undertakings and one-off subsidies with regard to major expenditure or paid with a view to the clubs' surviving bankruptcy, funding of the construction or renovation of commercially operated stadiums, structural annual support, etc.?

Answer given by Mr Monti on behalf of the Commission

(14 April 2003)

Professional football clubs that engage in economic activities, like transferring players, concluding advertising and sponsorship contracts and distributing merchandising articles are to be considered undertakings within the meaning of the competition rules of the EC Treaty. Therefore, for the purpose of applying Articles 87 and 88 of the EC Treaty, professional football clubs are in principle treated in the same way as other undertakings.

Having regard to the answer to question 1, subsidies and any other transfer of financial resources to professional football clubs are to be assessed under Articles 87 and 88 of the EC Treaty, that is to say, aid granted by a public authority which distorts competition and has an effect on trade is in principle incompatible with the common market and prohibited, unless it is found compatible by the Commission.

This question refers to a current manner in which subsidies relationships operate in this sector. To the Commission's knowledge, however, State interventions in the field of football take several forms that may warrant a different assessment as regards presence of State aid within the meaning of Article 87(1) of the EC Treaty.

State aid control policy is aimed at avoiding that undue distortion of competition affects trade between Member States. It is the responsibility of the competent authority within the Member States to design and to decide on the promotion of sports activities and its funding, either at amateur or professional level, while respecting the Community rules on State aid where necessary. As to the distinction between amateur and professional football clubs, the distinction seems indeed relevant as only the latter might be considered to be undertakings.

As already indicated, professional football clubs which are considered to be undertakings are subject to the State aid rules even if the peculiarities of sport have to be taken into account in the spirit of the Nice Declaration. Since the application of State aid rules is relatively new in this sector, the Commission's policy has to be developed on the basis of individual cases. In its practice up to now in this sector the Commission has found that under certain circumstances financing may not constitute State aid in the sense of Article 87(1) of the EC Treaty, i.e. when the state subsidies served an educational objective (see the Commission decision in file N 118/00, published on the Commission's website) or where the financing was granted for the construction of stadiums which can be under certain, restrictive, conditions considered as general infrastructure.

The Commission will continue to develop and clarify its policy in this area, when it will be asked to give its views in specific cases. Of course, certainty as to the position of the Commission regarding a particular situation can only be obtained via proper notification by the Member State under the state aid rules.