Could new EU laws see Manchester City and Newcastle face a state aid complaint?
A complaint to the European Commission against Paris Saint-Germain for allegedly receiving state aid and distorting the market has raised the prospect of Manchester City and Newcastle United being next in the firing line.
Football is accustomed to firebrand Spanish chief Javier Tebas taking shots at Paris Saint-Germain but his latest challenge to the French champions may have piqued additional interest in Premier League boardrooms.
Tebas’s LaLiga on Saturday announced it had lodged a complaint with the European Commission that PSG was in receipt of state funding from Qatar which had the effect of “seriously distorting” the European Union’s internal market.
PSG are not the only club Tebas has repeatedly denounced, however. Manchester City have regularly found themselves in his crosshairs over their Abu Dhabi-backed spending, while Newcastle United’s ownership by Saudi Arabia’s Public Investment Fund puts them in the same bracket. So could they be the next clubs that the EC is asked to investigate?
What is LaLiga’s complaint about PSG?
They claim that the Qatar-owned club’s signing of stars such as Kylian Mbappe, Lionel Messi and Neymar has been funded by what are in effect state subsidies from the Gulf state, such as inflated sponsorship deals with other Qatari entities. PSG chiefs have consistently denied this and accused Tebas of waging a campaign against them.
What does this have to do with City and Newcastle?
The funding of English champions City, owned by Abu Dhabi’s Sheikh Mansour and sponsored by the emirate’s Etihad Airways, has also been regularly decried by Tebas.
Competition lawyer Alexander Rose, a partner at the firm DWF, said UK clubs could be the subject of similar complaints to the EU as PSG. Newcastle, majority owned by PIF and now sponsored by Saudi company Sela, could also attract scrutiny.
Why is this happening now?
It is down to the introduction of the new EU Foreign Subsidies Regulation, which means the EC is no longer restricted to probing state aid that originates from within the EU.
“This new EU law provides a legal basis for football clubs in Europe that are concerned about the state financing of rivals to complain to the EC,” said Rose. “As a result, there’s likely to be lots of complaints and the EC will need to be clear about the situations when it will and won’t intervene.”
Are there any precedents for this?
The EC has previously shown a willingness to tackle state aid in football, most notably when Barcelona and Real Madrid were among four Spanish clubs ordered to pay millions of euros in extra tax in 2021 after a long-running legal dispute. Indeed, that fact has led to accusations of hypocrisy aimed at LaLiga president Tebas.
So are City or Newcastle likely to face action?
Firstly, City would be expected to robustly defend themselves, as they have against existing charges from the Premier League and previously from European governing body Uefa. Newcastle, whose spending has increased under Saudi ownership but drawn less criticism, would likely do likewise.
The bigger picture, legal sources say, is that moves such as LaLiga’s are typically part of a ploy to engineer regulatory changes. Club owners from the US and Europe in particular are thought to be keen to tighten financial regulation across the game, and any complaints about state aid should probably also be viewed in that light.