Brussels targets Barcelona and Real Madrid’s special status

The European Commission wants to force clubs to become commercial companies — threatening to cost the giants millions.

Spanish football powerhouses FC Barcelona and Real Madrid enjoy a privileged position in the national game. While their rivals must operate as commercial companies complying with all tax laws, these famous clubs remain registered only as sporting associations. This grants them tax breaks, lighter oversight, and eligibility for state subsidies. But these privileges may soon end. According to the UK’s Independent, European Ombudsman Nikiforos Diamandouros has called on the European Commission to conclude its investigation into both clubs as soon as possible. The outcome could require them to transform into commercial companies. “The legal form of clubs in the same competition should be unified,” football agent Jozef Tokos told Economic Daily.

Commission keeps clubs unnamed
We sought to find out in Brussels how far the investigation into elite clubs has progressed. “The Commission has received complaints about teams in several member states. Until the results are known, we will not name the clubs,” the European Commission’s Directorate-General for Competition stated. According to Slovak football agent Jozef Tokos, pressure on Spanish clubs comes mainly from England and Germany. “There, they must contend with strict financial constraints and dislike the lenient approach of the Spanish state and football federation toward debt accumulation and forgiveness of tax and social security liabilities,” Tokos noted. Media reports put such debts in the top two Spanish divisions at over €4 billion.

Debts are to blame
Why are only a few clubs — besides Real and Barcelona, also Osasuna and Athletic Bilbao — allowed to remain associations instead of companies? The answer lies in debts from the early 1990s. “At the start of 1990, all professional clubs had to convert to a special commercial company form. The aim was to ensure greater professionalism and transparency,” explained Jozef Tokos. Four clubs were exempted for a simple reason: they were the only ones not in debt during the review period. But after more than two decades and in a completely different economic climate, it now seems inevitable that both Real and Barcelona will be transformed into proper commercial companies. The Slovak agent agrees: “European competition rules also apply to professional sports clubs. They should be respected in Spain as well,” Tokos added.