Toine Manders – interview

Around 700 European clubs are suspected of
receiving state aid but the Commission is wary about taking any
action for fear of a public backlash, says Toine Manders in an
exclusive interview with EURACTIV.

The European Court of Justice’s 
Bosman ruling

created huge waves as regards the football
transfer market. Football clubs are just about
coming to terms with the fallout from that
decision but controversial issues of state aid
and unsustainable levels of debt could lead to
another crisis, says Toine Manders.

In an exclusive interview, EURACTIV sounded
out the views of a liberal Dutch MEP (ALDE), a
former lawyer who has been particularly active
in asking the Commission a string of pertinent
football-related questions. Manders is on the
Internal Market Committee for the next
Parliament. Click here to read the shorter
interview news.

Do you think the Commission’s
football state aid probe into the ‘big
five’

will unearth any illegal activities?
Are any of the ‘big five’ guilty on
any of the points of inquiry and, if so,
which ones?

It’s difficult to say but there is very
much a legal vacuum surrounding this issue.
There are lots of problems with all
professional European football clubs but
football is a tricky issue because it’s
such an emotive subject for the public. In
Spain, Real Madrid effectively have a free
training complex. The government bought it off
them to build new appartments and shops. In
Germany a new stadium to be used for the World
Cup will mostly benefit Bayern Munich. Take the
Netherlands, which is probably one of the more
minor ‘offenders’. A study by KPMG says
that state aid has amounted to around 300m
euros in the last ten years. 

In both situations a case could be made to
say that the facilities have a wider public
benefit – i.e. that they are
‘multipurpose’. But this needs to be
more clearly defined. Both cases appear to have
been shelved by the Commission but the
underlying problem is that there are so many
grey areas. What’s needed is more legal
certainty. For that you need clear EU
guidelines which would be agreed by key
stakeholders such as the Commission, Member
States, UEFA and national football
authorities.

Currently the Commission and national
authorities treat football with kid gloves
because it is so politically sensitive and they
don’t want to make themselves unpopular
with EU citizens. The Commission don’t dare
start infringement procedures because they
don’t know what might happen next.

Supposing a complaint was made to the
Commission. Now if that one inquiry led to the
conclusion that there was state aid in a
particular case, this could have a domino
effect. Around 700 European clubs are suspected
of receiving state aid. If one case were to be
successfully made others would surely follow
and there is a danger that football clubs would
collapse like a pack of cards. 

To avoid that scenario I would advocate
clear rules so that everyone knows where they
stand. Then, in say five years time,
infringement proceedings could be started
against those who are breaking the rules.

Are there any other particular issues
relating to state aid at EU level?

State aid is extremely difficult to define.
Football is a business but it is also a social
and cultural event. Most governments pay out
considerable sums for infrastructure which
benefits the sport – eg security outside
stadiums and transport. The question is where
to draw the line between what is legitimate
expenditure and what is state aid to a
club.

Some have argued that EU money that has
undoubtedly benefited the Euro 2004 football
championships and the Olympics amounts to a
form of state aid. Portugal has received around
600m euros and Greece has received around 1.4bn
euros. It is important to establish clearer
guidelines on what exactly falls under the term
state aid.

What is your view of Italy’s
Salvacalcio law? Do you think that the
Italian authorities should be given some
slack given the parlous state of football
finances there?

I think that the Salvacalcio law, which
would allow Italian clubs to write players’
salaries off over ten rather than three years,
does constitute state aid. Neither Parmalat nor
Fiat would be allowed to do that so why should
this be any different? Besides Monti, the
Commissioner for the Internal Market, Fritz
Bolkestein, has attacked the proposed law,
based on an alleged violation of EU accounting
principles. This Italian ‘solution’
merely stores up problems for the future and is
not fair to other teams in other EU
countries. 

Take the Netherlands, where clubs are not
allowed to rack up huge debts. Their assets and
liabilities have to be far more balanced. If
they are not then they are given a ‘yellow
card’. This means they have two months to
sort out their finances. If they still
haven’t done so then they are docked points
in the league. Although the EU is supposed to
be a single market, the Dutch clubs are
competing in the Champions League at a
disadvantage because they are not allowed the
higher indebtedness which would allow them to
buy the more expensive (and therefore
theoretically better) players.

Again, it shows what a legal minefield this
is. What is needed are clear rules. A think
tank made up of ‘wise men’ drawn from
all the various stakeholders could start this
process.

Is BSkyB’s ‘victory’ over
the Commission as regards the broadcasting
package of Premiership matches in the UK a
big blow for the Commission?

The fact that BSkyB ended up with all the
broadcasting rights despite a tendering
procedure is not good news for consumers. In
another case, FIFA sold the exclusive rights
for the World Cup in 2002 to the German company
Kirch. There was an abuse of monopoly here
because Germans who wanted to watch the
football had no choice but to pay 17 euros per
match on a pay per view basis.

Here again, greater legal certainty would
benefit all those involved in football.
Following a parliamentary question by Manders
the Commission said that rights must be sold to
at least two broadcasting stations so that
there is some consumer choice.

Do you have any concrete solutions to
help ensure the financial health of football
clubs throughout Europe?

I believe there will be an ‘EU
league’ within ten years. There are so many
distortions in the market. A level playing
field across Europe is what’s needed. By my
reckoning there would be promotion and
relegation in this ‘EU league’ and the
play-offs would be held in Brussels every year.
Players earning above a certain threshold would
pay a percentage of their salary into a
solidarity fund which would pay players’
salaries where clubs went bankrupt. 

Of course the details would need to be
carefully worked out but this would also create
more of an EU market. Currently, given their
smaller domestic markets, clubs in smaller
countries have nothing like the turnover to
compete with the bigger countries. In the
future, my view is that there is no reason why
any EU club should not join any league based in
the EU. This would mean that Glasgow Rangers,
who were looking into joining the English
Premiership, would have the legal right to do
so.

What are your views on the
introduction of sport into the Constitution
and the European Year of Education through
Sport (EYES)?

It was a wise move to introduce sport into
the Constitution. Amateur sport, at school and
local level, needs to be encouraged and it is
well worth investing money in policies to
educate children via sport and to stave off the
threat of obesity. As the distinction between
amateur and professional sport is becoming
increasingly unclear, clearer definitions (as
agreed by the key stakeholders) of these terms
would serve a useful purpose. There really
needs to be a threshold above which individuals
are deemed to be making a substantial part of
their earnings from sport and are therefore
‘professional’.

As for EYES, I think that such initiatives
are useful when they comprise more than just
subsidies for projects as this is short term
thinking. The added value lies more in
increased policy attention to for example
obesity. The various policy initiatives adopted
are often targeted at combating the symptoms of
obesity and of being overweight, instead of
taking a structural approach to tackling the
causes of the problem (namely too little sport
and not enough exercise). In this respect, an
idea would be to take steps to propose a policy
to promote sport and exercise in the Member
States and, where possible, to require, for
example in connection with educational
curricula or employment, or wherever possible,
that they be linked – as a
requirement – to European financial
assistance.

The Italian Olympic Committee have
controversially ruled that, from 2006-07,
Italian squads must comprise at least 50 per
cent ‘home grown’ players? Is this a
legitimate rule in your view?

I have no problem with this ruling provided
that it applies only to amateur sport and
national teams. But it should not apply to
clubs, which the European Court of Justice has
said are enterprises and should be treated as
such.

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