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State aid and football stadiums: a Belgian case

08/08/2019
State aid and football stadiums: a Belgian case
Photo: wavebreakmedia/Shutterstock.com

In recent years, a significant part of the case law relating to state aids in the sport sector have revolved around infrastructures. Belgium has been a trendsetter on this topic, with a decision (taken on 20 November 2013) in which the European Commission approved a notified support scheme for the construction or renovation of football stadiums in the Belgian regions of Flanders and Brussels, which would be financed by the Flemish Government.

Reasons for the aid

In 2008, the Flemish Government had analysed the need for and feasibility of multifunctional football stadiums in Flanders and Brussels given that the then current infrastructure no longer qualified as suitable venues for hosting international games (UEFA or Champion League finals) and that there were also difficulties in finding an appropriate venue for the national team’s home games. The banks would have been reluctant to provide loans for large infrastructure projects that did not benefit from any state funding and it would therefore have been impossible for football clubs to construct or renovate their respective football stadiums without the Flemish Government’s financial support. Thus, the scheme’s aim was to improve stadium-quality by ensuring that they would meet the UEFA criteria for European football games while also upgrading outdated or building new infrastructure. At the same time, the measure’s objective was to put football’s social role high on professional football clubs’ agendas through the realisation of multifunctional stadiums that would ensure a higher ‘social return’. This would include initiatives for fitness and health, educational projects, integration projects or the organisation of other sports and cultural events.

Who would benefit from the aid?

The aid beneficiaries would be the owners of stadiums that were located/to be constructed in Flanders or Brussels and that were used by one or more football clubs playing in the first or second professional leagues and that were affiliated to the Flemish football federation.

Aid could be granted for works carried out in the 2014-2017 period (for renovation projects) or 2014-2019 (for new projects). The scheme would have a total budget of 8 million EUR. Qualifying projects could benefit from a one-time grant of 10% of the investment amount, with a maximum per selected project of 2.5 million EUR for a new construction and 750,000 EUR for a renovation project.

Procedure to receive the aid

The applicant would have to submit an application under a one-off call for projects that had to fulfill the following eligibility criteria:

  • There had to be an effective need to construct/renovate the stadium taking into account geographic population dispersion in Flanders;

  • The aid had to be necessary to realise the financial plan;

  • All aid cumulated for the project would not be able to exceed 70%;

  • The stadium owner would have to commit to occasionally renting out the stadium to other clubs that wished to use it, and the price would have to be comparable with a benchmark price established by the Flemish Government.

Proposals that would fulfill these criteria would be ranked based on criteria including the stadium’s social return and the stadium’s ‘footprint’. The best-ranked undertakings could then benefit from the 8 million EUR. Aid beneficiaries would have to report each year to the Flemish government about how the aid amounts had been invested, which measures had been specifically taken to ensure the stadium’s multifunctional character, the stadium’s lease and the transparent, non-discriminatory conditions under which the lease had been made. If the aid beneficiary no longer fulfilled the eligibility criteria, then the Flemish Government could recover the aid.

Analysis by the European Commission

The Commission found that the supporting scheme qualified as State aid under Article 107(1) TFEU as (1) the measure had been granted out of State resources (the Flemish Government), (2) it conferred an economic advantage upon undertakings, (3) the advantage was selective and might distort competition, and (4) the measure might affect intra-Community trade.

However, the Commission found that the aid was compatible with the internal market under Article 107(3)(c) TFEU as it concluded that the measure:

  • pursued public policy objectives as it was intended to stimulate the social, cultural and educational return of the stadiums (being the stadiums’ multifunctional use for broader societal goals);

  • was necessary and proportional because it addressed the specific problem of under-investment in football infrastructure and at the same time ensured that several types of user and sector would be able to benefit from the subsidised facilities; and

  • did not affect trade and competition between Member States to an extent contrary to the common interest, as the need for the stadium must be proved by the beneficiaries and because the measure prescribed a high degree of transparency and a benchmark price at which stadium owners would have to lease their stadiums.

Accordingly, the Commission decided not to raise objections to the measure on the ground that the aid scheme for the construction and renovation of multifunctional football stadiums in Flanders and Brussels was compatible with the internal market under Article 107(3)(c) TFEU.

Conclusion

This was the second support scheme for sports infrastructure that the Commission cleared under the State aid rules. Earlier, in November 2011, the Commission had authorised a scheme set up by Hungary. Since those two cases, the Commission has further approved other State aids for the construction and renovation of stadiums (e.g. in Sweden, Germany, France, and Northern Ireland). When assessing such cases, the Commission has considered the sport sector’s enormous potential for bringing Europe’s citizens together and reaching out to everyone. In all the cases when the Commission found the measures to be in line with EU public policy objectives, it stressed: 1) the problem of under-investment in local sports infrastructure and 2) the multifunctional use of the concerned stadiums for social, sports and cultural events. The notification requirement and compatibility assessment could have been different today from a practical point of view in light of the 2014 General Block Exemption Regulation for State Aid, which includes specific rules for sports infrastructure.

Contact

Beatrijs Gielen

Associate

Nina Methens

Associate

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