Real Madrid win appeal against ‘illegal state aid’

Real Madrid have won their appeal not to pay back €18.4m in reported illegal state aid, EU court judges have decided.

The European Commission decided in 2016 that Madrid must pay back the money in a long-running case relating to land deals with the Madrid City Council.

The decision on Wednesday was made because it was decided that the European Commission did not satisfactorily prove that “an advantage was conferred to Real Madrid” in the dealings, as outlined by El Mundo.

It was initially argued that the land deal that Los Blancos signed with local authorities gave them an unfair advantage over rival clubs and was not fully lawful.

The case relates back to a deal signed in 1991 between the club and the city authorities over the remodelling of the club’s Santiago Bernabeu stadium.

In 1996, the club and council signed an agreement over a swap of land and two years later the council signed off on an agreement to execute that deal.

The deal reportedly held a value of €13.5m to the club and in 2011, they signed a transaction agreement with the authorities to try to close the open dispute.

However, by that stage the land was valued at €22m and it was agreed upon that instead, Madrid would receive other plots of land that held a value of €20m.

Brussels opened an investigation in December 2013 – following complaints from other clubs – and  reached ‘the preliminary conclusion that the compensation granted to Real Madrid by the Madrid City Council under the transaction agreement of 2011 constituted state aid in favour of the club’.

In 2016, after reviewing the documentation, the Commission declared incompatible with the internal market the state aid amounting to €18,418,054.44.

It was said that this was illegally granted on July 29, 2011 by Spain to Real Madrid, but it has now been determined that the club received no notable advantage.