Real Madrid and Barcelona ordered to repay millions in state aid

Frank Dalleres
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FC Barcelona v Real Madrid CF - La Liga
Real Madrid set a new transfer record with the purchase of Gareth Bale (left) and are the world's richest football club, with Barcelona second (Source: Getty)

Real Madrid and Barcelona, the world’s two richest clubs, have been ordered to pay back millions of euros after a European Commission investigation found them guilty of receiving illegal state aid.

Real must pay back €18.4m (£15.4m) relating to a land deal with local authorities, who were found to have overpaid, as well up to €5m (£4.2m) in extra tax, having been one of four Spanish clubs to have benefited from a preferential lower rate that the EC was not justified.

Barcelona must also pay back up to €5m (£4.2m) in tax as a result of being on the lower rate; so must Athletic Bilbao and Osasuna.

Read more: British MEP demands probe into Gareth Bale's £86m Real Madrid move

Valencia were hit with the biggest bill of €20.4m (£17.1m) after they and neighbouring clubs Hercules and Elche, who must pay €6.1m (£5.1m) and €3.7m (£3.1m) respectively, received financial guarantees from the state-owned Valencia Institute of Finance, giving them an unfair advantage on other sides also seeking credit.

“Using taxpayers’ money to finance professional football clubs can create unfair competition,” said Commissioner Margrethe Vestager.

“Professional football is a commercial activity with significant money involved and public money must comply with fair competition rules. The subsidies we investigated in these cases did not.”

Real have set the last five world transfer records, most recently when paying £86m to Tottenham for Wales star Gareth Bale in 2013, and had revenues of €577.0m for 2014-15, according to Deloitte. Their fierce rivals Barcelona reported income of €560.8m last year.

It is not the first time that the Spanish giants have fallen foul of regulators. Barcelona’s 14-month embargo on signing players – imposed for breaking football’s rules on the recruitment of young players from overseas – elapsed in January, while Real Madrid and Atletico Madrid were both hit with similar charges at the start of the year. Their punishment has been suspended by governing body Fifa while the clubs appeal.

The European Commission’s verdict follows a long-running investigation that began in 2009 and gathered pace four years later when it was confirmed that proceedings had begun against seven clubs.

Real, Barcelona, Athletic Bilbao and Osasuna’s beneficial tax rate was because the four clubs, who are all member-owned, were treated as not-for-profit organisations instead of limited liability companies, as other Spanish clubs are designated.

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