Real Madrid return 20mn euro 'illegal aid' payment

Madrid (AFP) – Real Madrid, one of the world’s richest clubs, have returned 20.3 million euros to Madrid city council after the EU said it constituted “illegal” state aid, city officials said Friday.

In a statement, the city council said it would inform the European Commission it had received the sum, which is equvalent to $22.6 million, in line with its obligation to recover the funds. 

In July, the EU Commission ordered Real Madrid and seven other Spanish football clubs to return millions of euros resulting from tax breaks and overpriced land transfers which it said had given the clubs unfair advantages.

Under EU anti-trust rules, governments are not allowed to provide state aid to commercial enterprises if it distorts market competition.

In 1998, Real Madrid paid the city 595,000 euros for a plot of municipal land but the deal ultimately fell through because of technical problems. In 2011, the city paid Real 22.7 million euros in compensation.

According to the Commission, that figure was over-stated by a massive 18.4 million euros and thus amounted to illicit aid.

City authorities then gave the club, the record 11-time European champions, until November to repay the sum, along with interest.

In October, Real Madrid vowed to appeal the EU ruling, saying the company that carried out the land valuation on behalf of the Commission was unqualified to do so.

Real have been involved in several controversial negotiations with the local council.

Back in 2001, Real sold off their old Ciudad Deportiva training ground for 480 million euros in a complicated deal involving the city council and property developers, thus wiping out a debt of 290 million euros and funding a spending spree on high-profile “galactico” players such as France legend Zinedine Zidane.

The EU investigated the deal but found no wrong-doing.

Real were forced earlier this year into amending plans to modernise their Santiago Bernabeu stadium after Spanish courts blocked their initial plans that included the usurping of public land on which to build a lucrative hotel and shopping centre.

In the 2015-2016 financial year, the club had a turnover of 620 million euros.