It is reported that Secretary of State for Sport Miguel Cardenal has revealed that a deal has been reached between the Spanish government and the football league (LFP) to assist clubs in erasing combined tax debts of Eur750 million. This raises at least two major questions;-
1. Is this within the regulations as set down by the UEFA Financial Fair Play rules?
2. Should this be classified as "unfair financial support" as defined by the European Union competition authorities?
I'm sure that UEFA never envisaged that national Governments would provide such tangible support to their own football teams however as such a move will improve the clubs' financial position will they mind? Does the reduction of a debt amount to some sort of creditors' agreement? Would this trigger any particular sanctions by UEFA?
Even if UEFA decides to look the other way and be quietly pleased that Spanish clubs are more solvent surely the EU competition authorities will not be able to ignore Spanish Clubs being favoured in this way. The EU closely monitors financial support, which is given to companies, to ensure that they do not receive unfair help which might distort competition. One of the main roles of the EU is to oversee a competitive market for goods and services, a role which it takes very seriously. As Spanish clubs compete in UEFA competitions against clubs from every other European country, they are clearly in a competitive market and could be deemed to be receiving privileged treatment. Will it be allowed or will the Spanish clubs be ordered to treat their tax creditor like any other i.e. to meet their full obligations?
If the Spanish Government is allowed to make this move, will other Governments follow? Clearly the UK Government is not likely to go down this route and one can only speculate as the feelings of those involved with Rangers FC whose largest creditor is reported to be the UK Government. Perhaps Rangers FC should move to Spain and claim relief from its debt burden?
Ok, this is far fetched, but it does make the point. The question is can the Spanish Government financially support football clubs or have they moved offside?