State aid in sport: Striking a difficult balance

07-06-2017

Under the Treaty on the Functioning of the European Union, a measure constitutes state aid if it grants a selective economic advantage to one or more enterprises through state resources, thus distorting or threatening to distort competition. However, not all forms of state aid are prohibited. Indeed, under certain conditions the European Commission may consider the state aid acceptable. This is notably the case when the support measures pursue a common objective or underpin the general interest. The Commission has developed a methodology to determine the compatibility of support measures with the Treaty provisions. It includes a 'balancing test', which is based on various questions aimed at analysing the negative effects of the aid measure and weighing them against its positive effects in reaching the objective of common interest. The decisions on state aid for sports infrastructure adopted up until recently revealed a consistent and favourable approach on the part of the Commission towards aid measures for sports infrastructure. In the process, the Commission translated some recurring general principles into operational exemption criteria. Building on those principles, in 2014, the Commission’s General Block Exemption Regulation clarified the types of sports infrastructure investment that should be considered exempt from the EU’s general laws on state aid. The European Commission has not yet articulated sector-specific rules regarding support measures granted to individual professional sports clubs. However, prompted by complaints from individual citizens, the case law on the Commission’s discretion in handling complaints, and the impact of the European Ombudsman’s recommendations, the Commission has substantially increased the number of in-depth investigations into various public support measures in favour of certain professional football clubs in the last few years.

Under the Treaty on the Functioning of the European Union, a measure constitutes state aid if it grants a selective economic advantage to one or more enterprises through state resources, thus distorting or threatening to distort competition. However, not all forms of state aid are prohibited. Indeed, under certain conditions the European Commission may consider the state aid acceptable. This is notably the case when the support measures pursue a common objective or underpin the general interest. The Commission has developed a methodology to determine the compatibility of support measures with the Treaty provisions. It includes a 'balancing test', which is based on various questions aimed at analysing the negative effects of the aid measure and weighing them against its positive effects in reaching the objective of common interest. The decisions on state aid for sports infrastructure adopted up until recently revealed a consistent and favourable approach on the part of the Commission towards aid measures for sports infrastructure. In the process, the Commission translated some recurring general principles into operational exemption criteria. Building on those principles, in 2014, the Commission’s General Block Exemption Regulation clarified the types of sports infrastructure investment that should be considered exempt from the EU’s general laws on state aid. The European Commission has not yet articulated sector-specific rules regarding support measures granted to individual professional sports clubs. However, prompted by complaints from individual citizens, the case law on the Commission’s discretion in handling complaints, and the impact of the European Ombudsman’s recommendations, the Commission has substantially increased the number of in-depth investigations into various public support measures in favour of certain professional football clubs in the last few years.