'Can't fight corruption with con tricks
They use the law to commit crime
And I dread, dread to think what the future will bring
When we're living in gangster time'
The Specials - Gangsters

The pressing need for change 

The Parliamentary Assembly (PACE) of the Council of Europe (CoE), which is composed of 318 MPs chosen from the national parliaments of the 47 CoE member states, unanimously adopted a report entitled ‘the reform of football’ on January 27, 2015. A draft resolution on the report will be debated during the PACE April 2015 session and, interestingly, (only?) FIFA’s president Sepp Blatter has been sent an invitation. 

The PACE report highlights the pressing need of reforming the governance of football by FIFA and UEFA respectively. Accordingly, the report contains some interesting recommendations to improve FIFA’s (e.g., Qatargate[1]) and UEFA’s governance (e.g., gender representation). Unfortunately, it remains unclear how the report’s recommendations will actually be implemented and enforced. 

The report is a welcomed secondary effect of the recent Qatargate directly involving former FIFA officials such as Jack Warner, Chuck Blazer, and Mohamed Bin Hammam[2] and highlighting the dramatic failures of FIFA’s governance in putting its house in order. Thus, it is undeniably time to correct the governance of football by FIFA and its confederate member UEFA – nolens volens. The real question is how to do it.

            Photograph: Fabrice Coffrini/AFP/Getty Images                   Photograph: Octav Ganea/AP

The main recommendations of the report 

In order to successfully investigate and disciplinary sanction violations made by its members, the report calls on FIFA and UEFA to revamp their institutions. Issues like corruption, nepotism, cronyism, conflict of interests can only be solved if:

• The rules and decisions are clear, transparent and accountable (i.e. sanctioned) at a central level (Congress)

• The flow of money is clear, transparent and accountable (i.e. sanctioned) at a central level (Congress)

• Those who are in charge could be held accountable in a judicial or democratic, transparent and clear way before Congress

• The duration of the terms of office should be limited at all levels (President, Congress, Committees)

• The rules and decisions made by independent FIFA/UEFA officials should be made ‘for the good of the game’ and not for personal gains

• Possible conflicts of interests should be prevented

• Gender equality with regard to democratic representation (Congress, Committees). 

The report’s lack of clarity on the role of Switzerland

In order to implement the report’s recommendations, it is necessary to fully appreciate the essential role Switzerland could play because, inter alia, FIFA and UEFA are both associations under Swiss law. While taking into account the upcoming implementation of Lex FIFA i.e. the criminalisation of corruption in sport in Switzerland, one needs also to analyse the potential role of Swiss private law to ensure a comprehensive implementation of the report’s recommendations on reforming the governance of football by FIFA and UEFA. 

Good governance, corporate governance or association governance?

‘Good governance’ should be distinguished from ‘corporate governance’. The main and essential difference between the two is that the former concerns the protection of the public interest and the latter the protection of the corporation concerned. Accordingly, the set of duties, responsibilities and competences of, e.g., public law authorities are different from those who serve in a commercial enterprise. Considering the public and private law context and the different demands with regard to using the available instruments thereof, it is important to discern the differences between good governance and corporate governance.[3]

According to the European Commission ‘[c]orporate governance defines relationships between a company’s management, its board … and its … stakeholders[4]. It determines the way companies are managed and controlled’[5] by those stakeholders for the former’s and the latter’s interest.

In principle, corporate governance is mainly the (social) responsibility of the respective corporation[6] whereby those stakeholders play a crucial role to ensure that certain standards[7] such as transparency and accountability – with regard to, e.g., FIFA’s and UEFA’s economic and rule-making activities – would be respected in accordance with mandatory rules of national and EU law[8].

All international sports governing bodies located in Switzerland such as FIFA and UEFA have been recognized as private law associations under Article 60 et seq. of the Swiss Civil Code (CC). Since 1981, Switzerland has also recognized the public law status of the International Olympic Committee (IOC).[9]

Under Swiss law, an association could be a profit-organization that may make turnovers or profits comparable to commercial enterprises.[10] Essentially, however, a corporation differs from an association, namely the former has to be financially accountable to its shareholders whereas the latter is required to be democratically and financially accountable to its members.[11] In order to ensure that those members make use of their membership rights, it is fundamental that the decision-making process with regard to anti-corruption compliance structures and democratic structures are strictly adhered in accordance with mandatory rules of law. Accordingly, it may also be a starting point for associations to act in accordance with the principles of ‘association governance’ if they were – indeed – implemented in mandatory law and applied correctly.[12] 

Constraints to association governance

As one of the state parties to the European Convention on Human Rights (ECHR), Switzerland is inter alia bound by Article 11 of the ECHR i.e. the fundamental right to freedom of (assembly and) association, which is subject to restrictions that are in accordance with the law and necessary in a democratic society. Accordingly, those associations have a restricted competence[13] to set the rules, to apply and to enforce them uniformly to their members.[14]

According to Article 23 Federal Constitution (FC), a private law association with a non-economic objective (i.e. political, religious, scientific, cultural, social or non-profit) has the right of freedom of association i.e. the right to establish or dissolve, to voluntarily be (come) a member or to leave and to participate in the association’s activities, which is not subject to state approval or state supervision. [15] As profit associations are only protected by the right of economic freedom pursuant to Article 27 FC, it is of vital importance for non-profit associations not to aim for monetary or financial benefits for its members.[16]

FIFA’s intent to exist as a non-profit organization is apparent from their articles of association.[17] According to Article 2(a) FIFA statutes, its main objective is: ‘[…] to improve the game of football constantly and promote it globally in the light of its unifying, educational, cultural and humanitarian values, particularly through youth and development programmes’. UEFA has a corresponding objective pursuant to Article 2 UEFA statutes. As long as the surplus of revenues will be spent on its non-commercial objectives under those articles of association, the non-profit status of FIFA – and, mutatis mutandis, UEFA – would not be challenged by Switzerland[18]. However, as a legislator, a judicator and as a state party to the CoE, Switzerland should critically assess those associations’ non-profit objectives and the significant surplus from their economic activities plus the distributions thereof in view of the report’s recommendations on financial transparency and accountability in order to respect the – underlying – association governance principles.[19]

FIFA and UEFA[20] are both established and registered[21] as private law associations under Article 60 et seq. CC[22] and, moreover, bound to respect the Swiss mandatory rules of law under Article 63(2) CC. Thus, mandatory rules cannot be disregarded by the articles of association i.e the self-regulatory framework of FIFA and UEFA. If an association’s resolution were to breach mandatory rules, it would be either voidable (i.e. to be challenged within a month of the notification) or null and void (i.e. to be raised at any time) under Article 75 CC.[23]

In case the articles of association do not address a particular issue, the non-mandatory rules of law would apply.[24] In particular, it should be noted that Articles 64-69b CC mostly[25] refer to mandatory procedural rules with regard to the articles of association. For instance, an association is required to have two organs, namely the general meeting of members that has supremacy over all other organs (Article 64(1) CC) and a committee consisting of members – and non-members if not explicitly forbidden by the articles of association[26] – that are elected by the supreme governing body (Article 69 CC). Other organs may be established pursuant to the articles of association.[27]

In other words, it is up to the, e.g., FIFA articles of association to self-regulate the composition, the independence of the Ethics Committee’s members and the transparency of its work. It is therefore not clear how this particular recommendation (please consider p. 8 of the report) can actually be implemented and enforced by the Swiss authorities. A similar assessment could be made, mutatis mutandis, with regard to all the other recommendations of the report.

Civil liability

Apart from the aforesaid memberships’ rights deriving from the decision-making process with regard to anti-corruption compliance structures and democratic structures, associations could also be held liable by their members because a membership is a contractual agreement between two private parties. In other words, the extra-legal part of association governance may be corrected by the rules of civil liability (including tort).

In accordance with Article 1 in conjunction with Article 155(f) of the Private International Law Act (PILA), Articles 52-59 (‘legal entities’) and Articles 60-79 (‘associations’) CC are applicable to all members of both associations.[28] If a private person or legal entity decides to be(come) a member of a private law association, the respective articles of association, regulations or decisions are contractually binding. Apart from membership contracts, there are – of course – other forms of private law’ relationships available whereby one may contractually be bound (in[29])directly to the FIFA or UEFA rules or decisions like, e.g., labour contracts, commercial contracts, player’ licences or host city agreements (e.g., Qatargate).

In this regard, the mandatory rules of civil law include, in particular public policy, bona mores and the protection of personality rights.[30]

Given that the public policy restrictions have already been assessed in an earlier blog post[31], this blog will specifically focus on bona mores and the protection of personality rights. 

As regards to bona mores, the Swiss Federal Supreme Court ruled that in case an article of association contains a third party’s veto right regarding all decisions of the association’s general assembly, it would be null and void for violating bona mores and the right of autonomy of associations.[32]

In reference to the Swiss notion of personality rights (e.g., the right to professional fulfilment through sporting activities, or the right to economic freedom[33])[34], which must be regarded as the equivalent of human rights horizontally applied to private law’ relationships, Article 27 CC stipulates that ‘[n]o person can wholly or partially renounce its capacity to have rights and to effect legal transactions’.[35] Accordingly, if it cannot be established that the law, the athlete’s consent or the existence of an overriding public/private interest may justify an infringement to, e.g., an athlete’s right to economic freedom (i.e. restraint of trade), it must be regarded as null and void under Article 28 CC.[36] Hence, as legislator and as State party to the CoE, Switzerland should have the duty to critically assess whether FIFA or UEFA may infringe their members’ contractual rights as protected by mandatory rules of law, in particular public policy and the protection of personality rights (i.e. contractual freedoms) in the light of the report’s recommendations on financial and on democratic transparency in order to respect the – underlying – association governance principles. 

Criminal liability

As regards the impact of mandatory rules of criminal law on international sports federations based in Switzerland, the first package of Lex FIFA - that will enter into force in the first half of 2015 if uncontested (i.e. a referendum[37]) - defines their respective ‘presidents’ as ‘politically-exposed persons’ (PEPs) i.e. persons with a prominent public function[38]. As PEPs are in a position to potentially commit financial offences (money laundering or corruption), banks are required to closely monitor those accounts (and of their families!) for any suspicious financial transaction. If PEPs and/or their families were to receive cash payments greater than CHF100,000, the respective bank would be obliged to identify them, to keep a record of the transactions and to clarify the background thereof. In case there is any evidence of criminal activities, the bank must report the unusual transactions to the Swiss authorities.[39] However, and surprisingly, the first package of Lex FIFA does not cover UEFA because ‘it is technically a[n] European organisation’ according to the approved legislative proposal[40] and as interpreted by its initiator Roland Büchel MP.

As part of the future second package of Lex FIFA, Switzerland will implement legislation to make corruption in sport a criminal offence. Insofar, private bribery (i.e. passive/active bribery in the private sector) is only regarded as a criminal offence under Article 4a and Article 23 of the Swiss Federal Unfair Competition Law following a complaint.[41] 

Conclusions

The lofty goals of the Council of Europe’s report on reforming football’s governance are laudable in principle, however they lack a clear reflection on the legal means available to attain them. To this end, it is the main point of this blog post’s author to attract the attention of the reader on the particular responsibility of Switzerland in this regard. Due to FIFA and UEFA being legally seated in Switzerland, Swiss law is tasked with the tough mission, in light of recent events, to enforce via private law and criminal law association governance standards on both non-profit organizations. The future implementation of Lex FIFA with regard to the criminalisation of corruption in sport, is a first step in the right direction. What’s rather missing, however, is a private law perspective. A comprehensive implementation of the report’s recommendations can only be achieved if the interpretation of the relevant provisions of the Swiss Code were to be in line with the report’s recommendations. Indeed, as a prominent Council of Europe’ state party, Switzerland should be stricter when assessing the (un)justifiability of a possible infringement by FIFA or UEFA of a member’s rights under the Swiss notion of mandatory rules of law. In this regard, it should also take into consideration the PACE report’s recommendations on reforming the governance of football by FIFA and UEFA.

[1] E.g. Qatargate: la confession accablante, France Football No. 3582, 9 December 2014, p. 19 et seq.

[2] Connarty, The reform of football governance, PACE report, 27 January 2015, p. 17.

[3] Addink, Goed bestuur, Kluwer 2010, p. 6.

[4] ‘See OECD Principles of Corporate Governance, 2004, p. 11, accessible at

http://www.oecd.org/dataoecd/32/18/31557724.pdf. ‘The EU corporate governance framework includes legislation in areas such as corporate governance statements, transparency of listed companies, shareholders’ rights and takeover bids as well as ‘soft law’, namely recommendations on the role and on the remuneration of companies’ directors.’

[5] COM 2012(740) final, Action Plan: European company law and corporate governance - a modern legal framework for more engaged shareholders and sustainable companies, p. 2-3.

[6] E.g., Giesen, Alternatieve regelgeving and privaatrecht, Monografieën Privaatrecht, Kluwer 2007, p. 29.

[7] COM 2012(740) final, Action Plan: European company law and corporate governance - a modern legal framework for more engaged shareholders and sustainable companies, p. 3.

[8] COM 2012(740) final, Action Plan: European company law and corporate governance - a modern legal framework for more engaged shareholders and sustainable companies, p. 3.

[9] Valloni & Pachmann, Sports law in Switzerland, Wolters Kluwer 2011, p. 65.

[10] Handschin, Good governance: lessons for sports organizations?, in: Bernasconi, International sports law and jurisprudence of the CAS, 2014, p. 118. Notes ommitted.

[11] Handschin, Good governance: lessons for sports organizations?, in: Bernasconi, International sports law and jurisprudence of the CAS, 2014, p. 118. Notes ommitted.

[12] Handschin, Good governance: lessons for sports organizations?, in: Bernasconi, International sports law and jurisprudence of the CAS, 2014, p. 119. Notes ommitted.

[13] Please do take into account Weatherill’s statement on conditional autonomy of sports federations under EU law: Weatherill, Is the Pyramid Compatible with EC Law?, ISLJ 2005(3–4), p. 3–7, republished in: Weatherill, European Sports Law Collected Papers Second Edition 2014, available at: http://www.springer.com/law/international/book/978-90-6704-938-2.

[14] Valloni & Pachmann, Sports law in Switzerland, Wolters Kluwer 2011, p. 40-44.

[15] Jakob, Huber and Rauber, Nonprofit law in Switzerland, The Johns Hopkins comparative nonprofit sector project, Working Paper No. 47, March 2009, p. 3, 5.

[16] Jakob, Huber and Rauber, Nonprofit law in Switzerland, The Johns Hopkins comparative nonprofit sector project, Working Paper No. 47, March 2009, p. 5.

[17] Pieth, Governing FIFA – concept paper and report, 19 September 2011, p. 12. Tomlinson, FIFA (Fédération Internationale de Football Association) : the men, the myths and the money, 2014, p. 28.

[18] Pieth, Governing FIFA – concept paper and report, 19 September 2011, p. 12.

[19] By the way, the EU-28 member states are obliged to act in accordance with the Court of Justice rulings in, inter alia, Walrave (Case 36-74, ECR 1974 1405), Bosman (Case C-415/93, ECR 1995 I-4921) and Meca Medina (Case C-519/04 P, ECR 2006 I-6991) with regard to the economic and rule-making activities of UEFA and FIFA. For more information please see Weatherill, European Sports Law Collected Papers Second Edition 2014, available at: http://www.springer.com/law/international/book/978-90-6704-938-2.

[20] Valloni & Pachmann, Sports law in Switzerland, Wolters Kluwer 2011, p. 67-69.

[21] Article 1 FIFA statutes; Article 1 UEFA statutes.

[22] Valloni & Pachmann, Sports law in Switzerland, Wolters Kluwer 2011, p. 19, 40.

[23] Handschin, Good governance: lessons for sports organizations?, in: Bernasconi, International sports law and jurisprudence of the CAS, 2014, p. 126-127. Notes ommitted.

[24] Jakob, Huber and Rauber, Nonprofit law in Switzerland, The Johns Hopkins comparative nonprofit sector project, Working Paper No. 47, March 2009, p. 6.

[25] With the notable exception of Article 75 CC.

[26] BGE 73 II 1.

[27] Jakob, Huber and Rauber, Nonprofit law in Switzerland, The Johns Hopkins comparative nonprofit sector project, Working Paper No. 47, March 2009, p. 6.

[28] Valloni & Pachmann, Sports law in Switzerland, Wolters Kluwer 2011, p. 19.

[29] E.g., a dynamic reference to accept the jurisdiction of the Court of Arbitration for Sports (CAS).

[30] Morgan, The relevance of Swiss law in doping disputes, in particular from the perspective of personality rights – a view from abroad, in: Revue de droit suisse, Band 132 (2013) I Heft 3, p. 344-345. Fenners, Der ausschluss der staatlichen gerichtsbarkeit in organisierten sport, Zurich 2006, paras. 111-113. Baddeley, L’Association sportive face au droit – Les limites de son autonomie, Basel 1994, p. 108.

[31] Marco van der Harst, Can (national or EU) public policy stop CAS awards?, 22 July 2014, available at: http://www.asser.nl/SportsLaw/Blog/post/can-national-or-eu-public-policy-stop-cas-awards-by-marco-van-der-harst-ll-m-phd-candidate-and-researcher-at-the-aislc.

[32] BGE 97 II 108 et seq. Valloni & Pachmann, Sports law in Switzerland, Wolters Kluwer 2011, p. 41.

[33] Let’s not forget that there are two sports law cases pending versus Switzerland at the European Court of Human Rights: Adrian Mutu (No. 40575/10) and Claudia Pechstein (No. 67474/10).

[34] Morgan, The relevance of Swiss law in doping disputes, in particualr from the perspective of personality rights – a view from abroad, in: Revue de droit suisse, Band 132 (2013) I Heft 3, p. 344, note 6: Decision 4A_558/2011 of 27 March 2012; ATF 134 III 193 (Further notes omitted).

[35] E.g., Morgan, The relevance of Swiss law in doping disputes, in particualr from the perspective of personality rights – a view from abroad, in: Revue de droit suisse, Band 132 (2013) I Heft 3, p. 344-345.

[36] E.g., Morgan, The relevance of Swiss law in doping disputes, in particualr from the perspective of personality rights – a view from abroad, in: Revue de droit suisse, Band 132 (2013) I Heft 3, p. 344-345.

[37] Deadline: April 2, 2015. Source: http://www.admin.ch/opc/de/federal-gazette/2014/9689.pdf.

[38] In order to prevent being blacklisted by the Organisation for Economic Cooperation and Development (OECD), Switzerland had to implement the 2012 Recommendations of the Financial Action Task Force (FATF) with regard to combating money laundering and terrorist financing.

[39] Sources: http://www.sportsintegrityinitiative.com/swiss-law-requires-bank-account-monitoring-sports-federation-heads/ and http://www.rolandbuechel.ch/news_850_lex-fifa-interessiert-auch-die-russen-buechel-auf-den-russischen-sputnik-news.xhtml.

[40] Bundesgesetz zur Umsetzung der 2012 revidierten Empfehlungen der Groupe d’action financière, December 12, 2014, p. 9697-9698. Available at: http://www.admin.ch/opc/de/federal-gazette/2014/9689.pdf.

[41] Cassini, Corporate responsibility and compliance programs in Switzerland, in: Manacorda, Centonze and Forti (eds.), Preventing corporate corruption: the anti-bribery compliance model, Springer 2014, p. 493.

The first part of our “Unpacking Doyen’s TPO deals” blog series concerns the agreements signed between Doyen Sports and the Dutch football club FC Twente. In particular we focus on the so-called Economic Rights Participation Agreement (ERPA) of 25 February 2014. Based on the ERPA we will be able to better assess how TPO works in practice. To do so, however, it is necessary to explore FC Twente’s rationale behind recourse to third-party funding. Thus, we will first provide a short introduction to the recent history of the club and its precarious financial situation. 

I. FC Twente 2004-2015

When local millionaire Joop Munsterman took over FC Twente in December 2003, the club was on the verge of bankruptcy. Munsterman certainly did not lack ambition and wanted to turn FC Twente into the best club of the Netherlands. With help of external investors, he quickly managed to reinforce the team with quality players such as the Swiss international Blaise N’kufo, the man who would later become FC Twente’s all-time top scorer. A few years later, in 2010, FC Twente won the Dutch League (Eredivisie), thereby defying the decade long dominance of Ajax, PSV and Feyenoord. By now the club was considered an example for a modern, innovative and successful football governance, and an inspiration for other smaller clubs. Through “excellent scouting” it managed to attract players from all over the world capable of winning the league and securing a spot in Europe’s most important and lucrative club competition, the UEFA Champions League. Moreover, Twente’s success on the field also led to financial success off the field. For example, Costa Rican international Bryan Ruiz was signed from KAA Gent in 2009 for €5 million and sold to Fulham in 2011 for €12.5 million, which makes for a healthy profit of €7.5 million.

The taste of the 2010 success and the additional earnings for participating in the Champions League created hunger for more. The club started spending large amounts of money on the transfer market, including the signings of Leroy Fer in 2011 for €5.5 million and Dusan Tadic in 2012 for €7.7 million. Furthermore, with the ambition of playing the Champions League consistently, the club decided to renovate and expand its stadium. Although FC Twente is the owner of the stadium, it did not have the means to finance the renovation. Therefore, it had recourse to external investors, including the municipality of Enschede, who provided a loan of €20 million.

Fast-forwarding to 2015, little is left of that over-ambitious FC Twente. The club currently finds itself in the lower ranks of the league table and is fearing relegation to the second league. Much-needed revenue from Champions League participation did not materialize since the club was not able to qualify after 2011 and many of the recent signings did not lead to transfer profits. In May 2014 the Dutch FA, KNVB, placed FC Twente into the so-called “Category 1”, a category dedicated to clubs in financial difficulties, which could face disciplinary sanctions if the financial situation is not improved swiftly.[1] In early 2014, FC Twente had probably taken on way too much financial risk and was in dire need of fresh money. In this context, the ERPA with Doyen was dearly needed to repay outstanding short-term debts. 

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II. The ERPA dissected

The ERPA between FC Twente and Doyen Sports is dated from 25 February 2014. The ERPA consists of two separate agreements: a first general agreement signed on 27 December 2013; and a second agreement added on 25 February 2014. By means of the ERPA, Doyen purchased part of the economic rights of seven players who at the time were all registered and playing for FC Twente, namely Castaignos, Promes, Ould Chikh, Mokhtar, Eghan, Ebecilio and Tadic. In return, Doyen provided FC Twente a fee for each of the players for a total amount of €5 million.

As stated, Doyen did not obtain all of the economic rights of the players, but only a share. The share acquired by Doyen varied from player to player and fluctuated between 10% (for Tadic) and 50% (for Castaignos). At first glance, the mechanism seems relatively straightforward: once a player is sold to another football club Doyen receives an amount equal to its share of the economic rights attached to the player. However, the story is a bit more complex. The ERPA provides for a minimum fee per player that is superior to the amount Doyen invested in that player. In other words, regardless of the transfer fee paid, Doyen will always make a profit. The bank always wins! Doyen’s minimum fee for each player has been set at a basic amount equivalent to the fee granted to FC Twente plus a fixed 10% to be increased at an annual rate of 10% elapsed as from 15 November 2013.  

The ERPA further sets out different scenarios which are described below.

A. Scenario 1&2: The Transfer offer

The first eventuality, and most likely the mutually desired one, is the transfer of the player. Under the first agreement (this part was central to its amendment), in case of a transfer offer for one of the players concerned by the agreement, FC Twente could choose to accept or reject the offer. If it accepted the offer, Doyen was entitled to the agreed share of the proceeds of the transfer. If this amount was inferior to Doyen’s minimum fee, then Twente had to pay the fee. In case Twente would refuse the offer, no further contractual consequences were foreseen. (Scenario 1). It appears from the latest release of footballleaks (available here) that the first agreement actually entailed a different scenario, which was later deleted from the ERPA and inserted in an additional agreement. This second agreement, added later to the ERPA and not communicated to the KNVB, radically changed the transfer scenario (Scenario 2). 

Under the second agreement, in case of a transfer offer equal or superior to the minimum market value of the player is received and rejected by the club, FC Twente is obliged to compensate Doyen by an amount equivalent to Doyen’s share of the proposed transfer fee. By way of illustration, say a given football club offers FC Twente €10 million for Castaignos, while his minimum market value is €8 million (see table 1). Should FC Twente reject this transfer offer it will be obliged to compensate Doyen for an amount of €5 million (50% of the proposed transfer fee of €10 million). Similarly, if the proposed transfer fee is equal or above 50% of the minimum market value and FC Twente rejects it, it could also be obliged to compensate Doyen. Using Castaignos again as an example, say the proposed transfer fee was not €10 million but €4 million. This amount is exactly 50% of Castaignos’ minimum market value. Should FC Twente decide to reject this offer and Doyen decides to make a written request to be compensated, Doyen could claim €2 million from FC Twente. 

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B. Scenario 3: Exchange of players

If Twente decides to exchange a player covered by the ERPA against another player, to which an additional fee might be added, the agreement foresees that Doyen will have three different options. First, Doyen can, in case of a partial exchange involving a complementary fee, decide to keep the same share of the economic rights attached to the new player and get the agreed share of the fee received by the club. If a one-to-one exchange takes place, Doyen can only keep the same share of the economic rights attached to the new player. Finally, in both types of exchanges, Doyen has the option to demand that FC Twente pays the minimum fee for the player.

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C. Scenario 4: A loan

In the third scenario, the player is loaned out to another club. If the loan fee received is higher than the wage bill of the player at FC Twente, the club makes a profit on the loan. Consequently, Doyen is entitled to receive a percentage of the loan fee. Doyen’s share of the loan fee is calculated on the basis of its share in the economic rights of the player concerned. If Castaignos were to be loaned out to another club and FC Twente receives a loan fee higher than its salary, Doyen would receive 50% of the profit on the loan fee.

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D. Scenario 5: Renewal of the player contract by Twente

The fourth scenario is also modified by the additional agreement signed on 25 February 2014. Under the original agreement, if the player renews his contract with FC Twente, Doyen simply keeps the same share of the economic rights for the total length of the new contract. However, Doyen does have the right to choose a new put option date or, importantly, simply stick to the old put option date (on the put option date see below scenario 6). Under the additional agreement, Doyen also has the possibility to request that the minimum fee be paid by FC Twente. 

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E. Scenario 6: The Put Option

In the ERPA, Doyen and FC Twente have agreed a put option, this alternative is covered in Scenario 5. A put option is a right given to Doyen to sell back its share of the economic rights linked to a player at FC Twente, at a given date and for a given price. The put option date was set at 31 August 2015 for all seven players of Twente(see table 1). To use a concrete example, Ebecilio was not sold before 31 August 2015. In fact, he currently still plays for FC Twente. In accordance with the particular conditions of the ERPA, Doyen had the right to sell to FC Twente its share of the economic rights of Ebecilio, and FC Twente would have the obligation to buy back those rights, for a fixed put option fee. According to Table 1, the put option fee for Ebecilio is €780.000. Whether Doyen actually exercised this option in the Ebecilio case is not clear, but it would have guaranteed the investment company a profit of €180.000. 

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F. Scenario 7: The player is unable to remain a professional football player

Point 8 of the ERPA foresees that FC Twente shall enter into a policy with an insurance company insuring the risk of the player’s death and the risk of the player suffering an incapacitating injury or any injury which may patently reduce the player’s ability as a professional football player. In the case of such events, Doyen will receive an amount equal to the put option fee, irrespective of whether the insurance policy claims are lower or higher than the put option fee.

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G. Scenario 8: The player becomes a free agent

Point 9.1 of the ERPA stipulates that FC Twente “shall use its best endeavors to prevent the Player from becoming a free agent and acknowledges that such endeavors are considered normal and ordinary business practice for professional football clubs”. The notion of “best endeavors” remains undefined and mysterious. Nonetheless, in the case a player’s contract expires and he becomes a free agent, FC Twente will be obliged to pay Doyen the minimum fee agreed in the particular conditions (see table 1). 

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H. Scenario 9: The economic rights are assigned to a third-party

After the signature of the ERPA, it is still possible to trade the economic rights attached to the same players with third parties. However, if Doyen wishes to sell the economic rights of one of the seven players, it would firstly have to offer those rights back to FC Twente on the same conditions as those that would be offered to third parties. Moreover, Doyen may not assign any share of the players’ economic rights to any Dutch club or to any other third party which is not suitable to hold them. In turn, should FC Twente wish to sell (part of) the remaining economic rights of a player, it would firstly have to offer these rights to Doyen before offering them to another assignee. 

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I. Scenario 10: Termination of the contract by the player without just cause

Final scenario, if the player terminates his contract without just cause (see Article 17 FIFA RSTP), the ERPA foresees that FC Twente shall pursue a claim for unlawful termination of the employment contract against the player before any competent judicial institution.^[2] If the relevant judicial body grants compensation to FC Twente, Doyen will get a share of the compensation equivalent to its share of the economic rights of the player. In the event the share of the compensation awarded to Doyen is less than the minimum fee, FC Twente will have to match the minimum fee. 

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III. The aftermath of the ERPA

On 26 November 2015, FC Twente told the Dutch press that it had bought off the TPO contract with Doyen. On that same day, footballleaks published a Settlement Agreement between Doyen and FC Twente. According to this settlement, the parties agreed to terminate the ERPA on the condition that Twente would pay to Doyen a compensation of €3.344.519. Whether the settlement agreement was signed by the two parties remains unknown since it does not include a date nor any signatures.

What is known is what happened to the seven players whose economic rights were partly sold to Doyen. Based on the information provided by the German website http://www.transfermarkt.de/, we made the following table summarizing the situation:

Since the signing of the ERPA (27 December 2013), five players have been transferred to other football clubs and two (Eghan and Ebecilio) are still under contract at FC Twente. Two players, Tadic and Promes, were sold for a relatively high fee (€13 million and €11.4 million respectively). For Tadic’s transfer, it is known that Doyen received a 10% of the transfer, since the fee was higher than the minimum fee. In fact, footballleaks provides a document called “Liquidation of Economic Rights Participation - Tadic”, holding that Doyen received €1.091.250 from Tadic’s €13 million transfer to English side Southampton. Doyen’s interest in Tadic was 10%. In principle this would mean that Doyen would receive 10% of €13 million, i.e. €1.3 million. However, based on article 7.2. of the ERPA, agent fees, solidarity contributions and the claim of another club (Groningen) were deducted to arrive at the final figure. The same process will have applied to the transfer of Promes.

Castaignos, Chikh and Mokhtar were sold for relatively low transfer fees (€2.5 million, €1.5 million and €1 million respectively). It is now possible to predict what truly happened to Doyen’s share of Castaignos’ economic rights. As Doyen’s share of the economic rights attached to Castaignos was 50% (see table 1), it should get €1.25 million (50% of €2.5 million). However, the particular conditions also stipulate that in such a case Doyen would be awarded the minimum fee, on 1 July 2015 it amounted to €1.8 million. Because Doyen’s share of Castaignos’ transfer fee (€1.25 million) is lower than the minimum fee (€1.8 million), it probably received the latter.

As to Ebecilio and Eghan, both remained at FC Twente after the put option date passed (31 August 2015), whether Doyen exercised its put option or not remains unknown. If Doyen has exercised this option, it would have received €780.000 for Ebecilio and €650.000 for Eghan.

Typically, these fees are not paid immediately at the date of the transfer. Instead the payment is divided in separate instalments. It is possible (even likely in light of its price tag), but we lack definite information on this point, that the settlement agreement between Doyen and FC Twente covers all outstanding instalments regarding previous transfers.  

IV. Is the ERPA in breach of KNVB and FIFA Regulations?

The Dutch media is full of rumours about the terrible things that are about to happen to FC Twente. Is the club going to go bankrupt? Or, will it be “only” losing more points in an already difficult battle to save its place in the Eredivisie? Until now, with few exceptions, very little substantial legal analysis has been provided. The KNVB and FIFA are the two main private regulators susceptible of going after FC Twente, though UEFA has also been mentioned in the press, but we are unable to identify under which legal basis it could get involved in the matter. One thing is certain, entering an ERPA with Doyen is a losing bet for a club. It takes huge financial risks and is the only actor facing disciplinary sanctions as Doyen escapes the jurisdiction of the football associations.

A. Has FC Twente breached the rules of the KNVB?

Pursuant to Article 57(1) of the KNVB Regulations, it is prohibited for clubs to reach any agreement that allows a third party to influence the club’s independence regarding the transfers of players. This provision is a mandatory transposition by the Dutch FA, as provided by article 1.3 of the FIFA Regulations on the Status and Transfer of Players (RSTP), of article 18bis RSTP (See below). The KNVB has stated that it was aware of the existence of the ERPA between FC Twente and Doyen and that it even intervened to prevent unauthorized influence by Doyen. However, the Dutch FA was apparently not informed of the existence of the additional agreement signed between Doyen and FC Twente and a KNVB insider was quoted saying that those provisions “appear to show that Doyen does exert influence on FC Twente”. Yet, at the time of writing, it remains unclear whether FC Twente is subjected to a formal investigation by the KNVB.

In fact, the difference between the original agreement and the additional agreement is flagrant and crucial. In the former case FC Twente was entirely free to refuse a transfer offer whatever its amount, while, in the latter, if an offer reached a minimum amount, the club was forced to sell the player or to pay out Doyen’s share on the offer. At this point in time, all parties must have been perfectly conscious that FC Twente was unable to disburse any cent to buy back the economic rights owned by Doyen. Hence, its transfer policy was entirely at the goodwill of the investment fund and the potential buyers. The fact that FC Twente did not disclose the additional agreement to the KNVB obviously vindicates this assessment. Moreover, the latest release by footballleaks shows that the original ERPA signed in December 2013 included some of the most controversial provisions regarding transfers. These were later redacted out of the agreement and inserted in the additional agreement, probably to circumvent the control of the KNVB. It will be extremely difficult for the KNVB to deny that Doyen exercised a substantial influence on FC Twente’s transfer decisions regarding the players subjected to the ERPA. The potential sanctions are listed in Article 11 of the License Regulations (page 78-90 of the KNVB Regulations) and include a fine, a points deduction or withdrawal of the license. Having in mind the severe financial situation FC Twente finds itself in, this could lead to the full-blown bankruptcy of the club. 

B. Has FC Twente breached the FIFA Regulations?

FC Twente might be facing a FIFA sanction as well. As everybody knows by now, the FIFA ban on TPO entered into force on 1 May 2015.[3] However, the ERPA between FC Twente and Doyen is not falling under the ban, as it is not applicable retroactively. Hence, its conformity to FIFA regulations can only be assessed in relation to the FIFA Regulations on the Status and Transfer of Players (RSTP) in force at the signature of the ERPA. Back then article 18bis of the RSTP on third-party influence on clubs provided that: 

1.      No club shall enter into a contract which enables any other party to that contract or any third party to acquire the ability to influence in employment and transfer-related matters its independence, its policies or the performance of its teams.

2.     The FIFA Disciplinary Committee may impose disciplinary measures on clubs that do not observe the obligations set out in this article.

The whole legal debate will hinge, as for KNVB proceedings, on whether Doyen had the ability to influence the policy of FC Twente in employment and transfer-related matters. As we have argued above, the agreement points a loaded financial gun at FC Twente’s head each time a transfer offer of a certain amount is made, or when the club wishes to renew the contract of a player subjected to the ERPA. There is very little doubt that the transfer policy of a club in financial difficulties will be directly influenced by an investor, which can financially pull the plug on the club at virtually any time if it refuses to sell a player for a certain fee. The problem now for FIFA (and KNVB) will be to find an appropriate sanction for the club. It is the only party facing disciplinary proceedings (Doyen is out of FIFA or KNVB’s disciplinary reach). In the end, the supporters and players are the victims of a gross mismanagement of the club’s affairs due to the hubris of an irresponsible president. FIFA will also have to decide whether the many other ERPAs signed by Doyen (you can find a probably incomplete list of Doyen’s investment in players here), which include similar provisions (see Doyen’s model ERPA here) are also in breach of article 18bis. If yes, and we think there is no reason to decide otherwise, then a number of clubs (think Atletico, Sporting or Porto) might face  FIFA (or national FA) sanctions in the near future. This case is not ending with FC Twente, it is about all the clubs that have signed an ERPA with Doyen Sport in the past.

Additionally, it is also possible that FC Twente be found in breach of Annexe 3 of the FIFA RSTP, which regulates the use of the FIFA ‘Transfer Matching System’ (TMS) in the case of a transfer. The TMS is an online system that intends to make international transfers of players between clubs quicker, smoother and more transparent. Under article 4.4 of Annexe 3, in case FC Twente transfers a player (five of the players concerned by the ERPA have been transferred), it must introduce in the FIFA TMS a ‘Declaration on third-party payments and influence’. It is thinkable that FC Twente did not include the full ERPA in the TMS system and might also, therefore, face the FIFA sanctions provided in article 9.4 of the Annexe.

In a nutshell, FC Twente is now in deep(er) trouble because it decided to play Maltese roulette with a ruthless investor.

[1] In fact, the KNVB has already deducted six points from FC Twente in the 2014/15 season for financial mismanagement.

[2] Point 9.4 of the ERPA.

[3] More information on the TPO ban can be found in our previous Bogs, such as “Blog Symposium: FIFA’s TPO ban and its compatibility with EU competition law – Introduction”.

This is the second part of a blog series on the Real Madrid State aid case. In the previous blog on this case, an outline of all the relevant facts was provided and I analysed the first criterion of Article 107(1) TFEU, namely the criterion that an advantage must be conferred upon the recipient for the measure to be considered State aid. Having determined that Real Madrid has indeed benefited from the land transactions, the alleged aid measure has to be scrutinized under the other criteria of Article 107(1): the measure must be granted by a Member State or through State resources; the aid granted must be selective; and it must distorts or threatens to distort competition. In continuation, this blog will also analyze whether the alleged aid measure could be justified and declared compatible with EU law under Article 107(3) TFEU.

The aid is granted by the State or through State resources

In its decision to launch a formal investigation, the Commission concluded that Real Madrid “enjoyed an advantage which derives from State resources, as the State forgoes possible revenues”.[1] Given that the Commission argued in 2002 that a requalification of a terrain does not entail State aid because there was no transfer of State resources and given that the facts regarding the requalification show some striking similarities with the current case, it is surprising that the Commission provided such a limited analysis. This might leave open the possibility for Real Madrid or the Council to argue that they could have legitimately expected that the land transactions concerned were free of a transfer of State resources. Therefore, it would have been more prudent for the Commission to further highlight the differences between the case in question and its decision not to start an investigation in 2002.

As regards land sale transactions, the land that is sold under market value by the public authorities is to be considered a State resource. The agreements to (1) compensate Real Madrid for the terrain in “Las Tablas” by providing the club other terrains and (2) to provide Real Madrid the land between the stadium and the “Paseo de la Castellana” are both imputable to the Council of Madrid and imply a loss of State resources. As regards the ad hoc modification of the PGOU, even though the modification provides a selective advantage to Real Madrid, this measure is unlikely to qualify as State aid, because no State resource has been transferred. 

The selectivity of the aid granted

With regard to whether the agreements favoured Real Madrid over its competitors, the Council could hold that both agreements could only be made with Real Madrid and not with any other football club. The first agreement involved a compensation for the impossibility to transfer a land from the Council to Real Madrid and the second agreement concerned further land transactions between Real Madrid and the council that, due to the location of several of the terrains in question, could not be offered to another football club.

Nonetheless, both measures at hand can most definitely be considered selective, thereby favouring Real Madrid over its competitors. The agreement of 29 July 2011 is selective because it only involves Real Madrid. Not only does the compensation include an economic advantage for the club, Real Madrid will also have the acquired terrains at full disposal, allowing it to sell, rent, swap or construct in any way it pleases.

Moreover, despite that the Council stated that Real Madrid had to bear all the costs for the construction of the hotel, the parking space and the shopping centre, it is also true that all the benefits of the exploitation will go directly to the football club and not to any of its competitors. The competitors, in this sense, should be interpreted wider than just being other football clubs. The Council has not given any reasons why a hotel and shopping centre in one of the main streets of Madrid has to be exploited by the undertaking Real Madrid. The “Bernabéu-Opañel” plan is therefore also selective in that it favours Real Madrid over competitors that exploit hotels and shopping centres. 

The aid has an effect on inter-State trade and distorts competition

In order for the measures to fall within the prohibition of Article 107(1), there must be an effect on competition and inter-State trade. For this condition to be fulfilled, it is sufficient that the Commission can establish a link between the measures in question and a potential effect on competition and trade. The recipient, Real Madrid, is an undertaking that operates in the European football sector. The 29 July 2011 Agreement could have allowed Real Madrid to receive a higher compensation than what it should have gotten, had the Council used the market values of the terrains in question. The economic advantage obtained by Real Madrid could be used to strengthen its position in the football sector. The same can be said for the operation “Bernabéu-Opañel”. A possible economic advantage deriving from this measure enables the football club to generate profits from the exploitation of a hotel and a shopping centre. This extra income could enable them to strengthen their team by buying new players. A strengthened Real Madrid would distort competition since other football clubs have not enjoyed the same support.

Secondly, the fact that the measure facilitates Real Madrid to run and exploit a hotel in one of the most important streets of Madrid, distorts competition in the hotel sector as well. Other hotels might generate less money because Real Madrid is exploiting an indirectly publicly subsidized hotel.

All the four criteria of Article 107(1) TFEU are fulfilled. The land transactions have created an advantage to the recipient, Real Madrid. Furthermore, the lands provided by the Council are to be regarded as State resources and, given that the measures were selective, competition has been distorted.  

Can the aid be justified?

The moment an aid measure fulfils all the criteria of Article 107(1), it will be seen as constituting State aid. However, the measure could still be deemed justified under certain conditions in accordance with EU Law. There are no EU Regulations or Commission guidelines on the application of State aid rules to commercial sporting activities. Therefore, the question whether the aid can be justified needs to be based on the conditions set in Article 107(3)(c) TFEU.[2] Article 107(3)c) provides that aid may be compatible if it facilitates the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest. The Commission understands that the specific nature of sport needs to be taken into account when dealing with State aid cases, as sport fulfils educational, public health, social and recreational functions. Furthermore, it is established Commission practice that a measure may be declared compatible if it is necessary and proportionate and if the positive effects for the common objective outweigh the negative effects on competition and trade.[3] In a Hungarian State aid case dating from 2011, the Commission approved an aid measure for the Hungarian sport sector, since the general objective of the measure (“increase the participation of the general public in youth activities”) took into account Hungary’s commitments that the benefits would be distributed to the widest possible beneficiaries, and is therefore in line with the common market. [4]

Furthermore, over the last two years the Commission has reached several final decisions involving State aid granted for the construction of football stadiums. For example, in a decision dating from 20 November 2013, the Commission decided not to raise objections regarding the plan of the Flemish government to subsidize the renovation and the construction of multifunctional football stadiums as the State aid contained therein was deemed compatible with Article 107(3)(c) TFEU. Even though all the criteria of Article 107 (1) were fulfilled, the Commission acknowledged that the social, cultural and educational return of football stadiums plays a central role in the decision whether the aid could should be declared compatible. Since all the stadiums in question would have a clear multifunctional character and different players could use the stadiums for different events, the Commission found that the general public would benefit from the aid and that the positive effects would outweigh the negative effects.[5]

When applying the balancing test to the possible aid measures involving Real Madrid, firstly, as regards the 29 July 2011 Agreement, there does not appear to be an objective of common interest. The agreement was made with the sole objective of compensating Real Madrid and was not beneficial for the general public.

As regards the “Bernabéu-Opañel” on the other hand, the Council held that the operation would create additional “green zones” for the city and that the hotel and shopping centre would provide work to around 600 people. The question remains, however, whether the positive effects derived from the creation of 600 jobs outweigh the negative effects on competition and trade.

In its decision, the Commission considered that it did not appear to pursue an objective of common interest, which could justify an economic advantage to one of the biggest and most successful operators in a highly competitive economic sector. [6] Indeed, the only player in the football sector that will benefit from the operation “Bernabéu-Opañel” is Real Madrid. The fact that Real Madrid could generate profits from the hotel and shopping centre will not be beneficial to other football clubs operating in the football sector, nor will it be beneficial to the football sector in general. Therefore, it seems unlikely that the positive effects of the operation “Bernabéu-Opañel” outweigh the negative effects on competition and trade.  

The recovery of the aid and possible consequences of a negative decision

A measure which constitutes State aid in the meaning of Article 107(1) TFEU and which is declared incompatible with the internal market, is unlawful. Therefore, should the Commission find that the agreements between the Council of Madrid and Real Madrid constitute unlawful aid, it will order Spain to recover the aid provided to the club.  

The Recovery of the aid

The purpose of recovery is to re-establish the situation existing before aid was unlawfully granted.[7] The procedural rules on the recovery of unlawful aid are laid down in in Council Regulation 659/1999. Article 14(1) of the Regulation provides that “the Commission shall decide that the Member State concerned shall take all necessary measures to recover the aid from the beneficiary”. Not only is the Commission exclusively competent to decide whether or not a measure constitutes unlawful State aid, it is also exclusively competent to request from a Member State to recover the unlawful State aid. Importantly, however, the recovery itself shall be done in accordance with the procedures under the law of the Member State concerned, provided that they allow the immediate and effective execution of the Commission’s decision.[8] As regards the quantification of the aid, there is no provision of Union law that requires the Commission to quantify the exact amount of aid to be recovered.[9] Nonetheless, the Commission may include information in its recovery decision enabling the addressee of the decision to work out that amount itself without overmuch difficulty.[10]

To establish the amount of aid to be recovered, one needs to firstly determine the total advantage obtained by Real Madrid and the exact moment in which Real Madrid started obtaining the advantage. At this stage in time it is difficult to determine what the Commission could consider as possible advantage. It is neither known whether the Commission takes all land transactions into account, nor is it clear what the exact value of each parcel is due to the complexity of the case and the lack of relevant information. However, once a total advantage is established, and with that the total amount of aid to be recovered, this amount would also probably include interest at an appropriate rate fixed by the Commission.[11]  Interest would be payable from the date the unlawful aid was put at the disposal of Real Madrid until the date of effective recovery. The aid can be recovered by means of a cash payment. However, alternative measures are allowed provided that the Member State ensures that the measure chosen is transparent and eliminates the distortion of competition caused by the unlawful aid. 

The consequences of a negative decision

The direct consequence of a negative decision for Real Madrid is that the situation existing before the aid was unlawfully granted would have to be re-established. Whether this situation concerns the time before the agreement of 1998, the Agreement of 29 July 2011 or before the operation “Bernabéu-Opañel” was conducted will depend on the Commission’s decision. An analysis of other Commission decisions involving land transactions in which the Commission ordered recovery of the aid indicates that the Commission does not simply undo the land transaction itself. The Commission decision that led to the Konsum Nord case included the order directed to the Swedish authorities to recover an amount equal to the difference between the amount offered for a land by the supermarket “Lidl” and the amount paid by the supermarket “Konsum”.[12] With regard to a Dutch case on an alleged sale of land below market price, the Commission established that the amount to be recovered consisted of the difference of the price paid by the undertaking “SJB” and the price initially agreed between the “SJB” and the local authorities. A third very recent example concerned unlawful forest swap transactions in Bulgaria. The Commission ordered Bulgaria to either recover the incompatible State aid granted or undo the swaps concerned. In other words, undoing the land transaction is merely an option and never an obligation.

Keeping the Commission practice in mind, in case of a negative Commission decision, the most likely scenario is that the Commission will oblige Spain to recover the advantage Real Madrid obtained from the transactions, but that the transactions themselves will not be undone. Therefore, the obvious direct consequences for the football club will constitute in paying a lump sum to the Spanish authorities equal to the difference between the valuation of the parcels as established by the Commission and as valued by the Council of Madrid.  

A more far-reaching consequence, such as an unlimited suspension of the operation “Bernabéu-Opañel”, are rather unlikely. The recovery will be done under national law[13], thus further recovery actions mainly depend on Spanish national law. The ad hoc modification of the Plan General de Ordenación Urbana de Madrid de 1997 (PGOU) that opened up the possibility of constructing on the terrain between the stadium and the “Paseo de la Castellana” can, therefore, only be challenged under national law.

If the consequences of a negative decision are only limited to paying a lump sum and, given the fact that Real Madrid is possibly financially the most powerful football club in the world, one could legitimately ask the question what the fuss is all about. Indeed, why would Real Madrid worry about paying a lump sum of, say, €20 million when its turnover exceeds €600 million per year, and when it is capable of spending more than €100 million in summer transfer fees? In my opinion, the aspects that make the Real Madrid case unlike any other State aid case are not to be found in the amount that constitutes the total financial advantage for the club nor, consequentially, the amount that would have to be recovered. What makes this case special is the very specific role played by citizens and the position Real Madrid has in the football sector. A negative State aid decision involving one of the richest and most successful football clubs in the world would serve as a warning to the entire European football sector that the Commission is serious regarding unlawful State aid granted to football clubs.  

To be continued….

[1] SA.33754 (2013/C) (ex 2013/NN) – Spain Real Madrid CF, §36

[2] Article 107(2) and Articles 107(3)a), b) and d) are also justifications, but are not relevant to the case at hand

[3] Community framework for State aid for research and development and innovation, OJ C 323, 30.12.2006, p. 1, point 1.3.

[4] SA.31722 Supporting the Hungarian sport sector via tax benefit scheme, §85-90

[5] SA.37109 (2013/N) – Belgium Football stadiums in Flanders, §28-34

[6] SA.33754 (2013/C) (ex 2013/NN) – Spain Real Madrid CF, §38-40

[7] Commission Regulation (EC) No 794/2004 implementing Council Regulation (EC) No 659/1999 laying down detailed rules for the application of Article 93 of the EC Treaty, Recital 10

[8] Council Regulation (EC) No 659/1999 laying down detailed rules for the application of Article 93 of the EC Treaty, Article 14(3)

[9] Case C-480/98 Spain v Commission [2000] ECR I-8717, §25

[10] Commission Decision SA.24123 Alleged sale of land below market price by the Municipality of Leidschendam-Voorburg, §107

[11] Council Regulation (EC) No 659/1999 laying down detailed rules for the application of Article 93 of the EC Treaty, Article 14(2)

[12] Commission Decision No C 35/2006 – implemented by Sweden for Konsum Jämtland Ekonomisk Förening, §74-77

[13] Council Regulation (EC) No 659/1999, Article 14(3)