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Barcelona, Real Madrid Among Spanish Clubs Under Investigation for Illegal Aid

BARCELONA, SPAIN - OCTOBER 26:  Lionel Messi of FC Barcelona duels for the ball with Pepe of Real Madrid CF during the La Liga match between FC Barcelona and Real Madrid CF at Camp Nou on October 26, 2013 in Barcelona, Spain.  (Photo by David Ramos/Getty Images)
David Ramos/Getty Images
Tyler ConwayFeatured ColumnistDecember 16, 2013

F.C. Barcelona and Real Madrid are chief among the seven Spanish football clubs the European Commission has opened up an investigation against for allegedly obtaining illegal state aid.

Spanish Foreign Affairs minister Jose Garcia-Margallo spoke with AS.com, confirming that the governing body is looking into club finances. The European Commission has alleged that the seven clubs—Barcelona, Madrid, Athletic, Osasuna, Valencia, Hercules and Elche—committed various acts to avoid footing their aid bill.

The Spanish government has, at this time, denied all allegations.

“Clearly the [Spanish] government are going to fight to the end defending these Spanish clubs, who are part of the Spanish brand,” said Garcia-Margallo.

Four clubs (Real Madrid, Barcelona, Athletic and Osasuna) are having their tax statuses looked into, as they are all non-corporate entities that could have been given unfair tax breaks. By avoiding being established as a corporation, these clubs would be able to receive special tax exemptions—similar to how non-profit organizations work in the United States.

BILBAO, SPAIN - DECEMBER 01: A general view of the stadium prior to the La Liga match between Athletic Club and FC Barcelona at San Mames Stadium on December 1, 2013 in Bilbao, Spain.  (Photo by David Ramos/Getty Images)
David Ramos/Getty Images

Real Madrid are also undergoing an investigation for the circumstances that saw them move out of a training facility that was zoned for businesses, and Athletic are said to possibly have received illegal funds in building the new San Mames Stadium. The new building opened this September after a three-year, high-cost building process. 

This is not the first time the European Commission has looked long and hard at how Spanish football clubs pay their bills. The organization began a widespread look at club finances in 2012, as the clubs continued to spend despite skyrocketing debt across the board. In total, the debt is said to have exceeded €692m, per The Guardian's Giles Tremlett.

If found guilty of illegally receiving aid, the liable clubs, all but one of which play in La Liga (Hercules being the exception), will be expected to repay the amount—something that could be a crippling blow to Spanish football.

While Real Madrid and Barcelona are among the two most beloved clubs in the world, the others on that list don't have the constant stream of revenue. Tremlett speculated in March that hefty fines could "collapse" the current Spanish football structure.

The official investigation is likely to be opened on either Dec. 18 or Dec. 19. The clubs would then have four months to provide evidence that proves their innocence before a decision is rendered.  

 

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