In recent times, the European football landscape has undergone a significant transformation. The changes were catalyzed by an unexpected influence – financial grants flowing from Qatar and the United Arab Emirates (United Arab Emirates). These subsidies have not only attracted the attention of football fans, but also raised concerns within the European Union (EU) regarding their impact on the football market on the continent. This article will explore the intricacies of these concerns, focusing on how EU Regulation on Foreign Subsidies (FRS) cuts across the world of football.
The complaints
It all started with complaints from national football leagues in Europe. One of the main complainants is the Spanish La Liga, which has filed an official complaint with the European Commission (THIS). La Liga says Qatari subsidies given to Paris Saint-Germain do not comply with the FSR.
La Liga’s complaint is a significant development, as it draws attention to the potential impact of foreign subsidies on the competitive balance within European football leagues. This speaks to the desire for greater transparency and fairness in sport.
Another notable complaint comes from Belgian football club Royal Excelsior Virton. They have raised concerns that rivals SK Lommel are benefiting from “financial doping” from the Emirate of Abu Dhabi. Royal Excelsior Virton claims that such subsidies distort domestic competition.
Royal Excelsior Virton’s complaint adds to the growing chorus of voices highlighting the influence of foreign subsidies on the European football landscape. This reflects the concerns of clubs who feel their competitiveness is compromised due to external financial support.
The answer
What has been the EU regulatory response? According to the FSR, which recently entered into force, the EC can open an investigation ex officio. This is certainly an option if there is a suspicion that there may be a distorting foreign subsidy.
This option involves monitoring any support or financial contribution from a non-EU third country. It offers a comparatively favorable position to a company operating within the EU internal market.
The ex officio procedure works in such a way that if it is suspected that a particular foreign subsidy may be harmful to the EU internal market, during the preliminary examination phase the EC can (i) request the submission of data relating to the subsidy in question by the companies under investigation or by other companies, and (ii) carry out an investigation inside and outside the EU in order to obtain an sufficient amount of information.
If, during the preliminary examination phase, the EC determines that a foreign subsidy could harm the EU internal market, it will open an investigation and decide:
- impose measures or commitments if there is evidence that the foreign subsidy in question distorts the internal market;
- without objection if foreign aid does not distort the EU market;
- not to take further action if the positive effects outweigh the distortions.
In any case, the EC would have to make one of three possible decisions within 18 months.
It is essential to note that the EC is currently in a transition phase. If it has acquired new powers to open investigations into foreign subsidies, it will have to wait until October 12, 2023 to process merger and public procurement files via a notification system. This waiting period is part of the European Commission’s strategic timetable.
The Western Balkans?
We looked at the picture of the RSF and football in the EU. Now let’s look at the football clubs in the Western Balkans. Interestingly, no notable investments from the UAE and Qatar have been received. Instead, these clubs derive their financial sustenance from a mix of private ownership and sponsorships. Additionally, broadcast rights, player transfers, government support and contributions from dedicated fans add to the multi-faceted financial ecosystem that supports football in the Western Balkans. However, as the football funding landscape evolves, it remains to be seen whether the Western Balkans will begin to receive funding from other countries.
Conclusion
Complaints about foreign subsidies from Qatar and the United Arab Emirates impacting the European football market have sparked scrutiny from the EC. However, the EC’s current priority is to effectively assess notifications related to foreign subsidies. She treads carefully when addressing subsidy issues in the football sector. The complaints from the Spanish La Liga and Belgian clubs highlight the importance of this issue within the sports industry. Furthermore, the EC’s new ex officio investigative powers reflect its commitment to maintaining fair competition within the EU. As these developments unfold, the European football landscape could see transformative changes in the pursuit of greater transparency and fairness.
