In recent times, the European football landscape has witnessed a significant transformation. The changes have been catalyzed by an unexpected influence – financial subsidies pouring in from Qatar and the United Arab Emirates (UAE). These subsidies have not only captured the attention of football enthusiasts but have also raised concerns within the European Union (EU) regarding their impact on the continent’s football market. This article will explore these concerns’ intricacies, focusing on how the EU Foreign Subsidies Regulation (FSR) intersects with the football world.
It all started with the complaints from football national leagues in Europe. One of the prominent complainants is Spain’s La Liga, which has submitted a formal complaint to the European Commission (EC). La Liga alleges that Qatari subsidies provided to Paris Saint-Germain do not align with the FSR.
The complaint by La Liga is a significant development, as it draws attention to the potential impact of foreign subsidies on the competitive balance within European football leagues. It signals the desire for greater transparency and fairness in the sport.
Another notable complaint comes from the Belgian football club Royal Excelsior Virton. They have raised concerns about their rival, SK Lommel, benefiting from “financial doping” from the Emirate of Abu Dhabi. Royal Excelsior Virton asserts that such subsidies are distorting the national competition.
The complaint by Royal Excelsior Virton adds to the growing chorus of voices highlighting the influence of foreign subsidies on the European football landscape. It reflects the concerns of clubs that feel their competitiveness is compromised due to external financial support.
What was the regulatory response of the EU? According to the FSR, which recently entered into force, the EC can start an ex officio investigation. This is certainly an option if there is a suspicion that there could be a distorting foreign subsidy.
This option involves controlling any support or financial contribution from a non-EU third country. It comparatively provides a favorable position to an undertaking operating within the EU internal market.
The ex officio procedure operates in such a way that if there is a suspicion that a particular foreign subsidy may be harmful to the EU’s internal market, during the preliminary review phase, the EC can (i) request the submission of data related to the subsidy in question by undertakings under investigation or other undertakings, and (ii) conduct an investigation inside and outside the EU to obtain a sufficient amount of information.
If, during the preliminary examination phase, the EC determines that a foreign subsidy might be harmful to the EU’s internal market, it will open an investigation and decide:
In any case, the EC should make one of three possible decisions within 18 months.
It is essential to note that the EC is currently in a transition phase. While it has acquired new powers to open investigations into foreign subsidies, it must wait until October 12, 2023, to handle merger and public procurement cases through a notification system. This waiting period is part of the European Commission’s strategic timeline.
We’ve examined the picture of the FSR and football in the EU. Now, let us look at football clubs in the Western Balkans. Interestingly, no notable investments from the UAE and Qatar have been received. Instead, these clubs draw their financial sustenance from a mix of private ownership and sponsorships. Moreover, broadcasting rights, player transfers, government support, and contributions from dedicated fan bases add to the multifaceted financial ecosystem that sustains football in the Western Balkans. However, as the football financing landscape changes, whether the Western Balkans will start receiving financing from other countries remains to be seen.
Complaints regarding foreign subsidies from Qatar and the UAE impacting the European football market have prompted scrutiny from the EC. However, the EC’s current focus is on efficiently assessing notifications related to foreign subsidies. It is proceeding with caution when addressing subsidy concerns in the football sector. The complaints from Spain’s La Liga and Belgian clubs highlight the significance of this issue within the sports industry. Additionally, 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 may witness transformative changes in pursuit of greater transparency and equity.
Authors: Vuk Leković, Milica Novaković, Dušan Jablan
