Wednesday, June 19, 2024

LALIGA files complaint against PSG with European Commission

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In response to the new policy direction arising from the implementation of the European Regulation on Foreign Subsidies Distorting the Internal Market (the “Foreign Subsidies Regulation”), LALIGA has lodged a complaint with the European Commission regarding the PSG’s funding mechanisms, which seriously distort the European Union’s (EU) internal market.

This regulation, which is applicable from 12th July 2023, concerns foreign subsidies granted by non-EU states to companies carrying out economic activity within the internal market, taking into account those given by public companies that are, directly or indirectly, controlled by a state, including subsidies granted within a period of five years prior to the implementation of the regulation.

As a result, LALIGA has filed a complaint alleging that PSG has received foreign subsidies from the State of Qatar, which has allowed it to improve its competitive position, thus generating significant distortions in several national and EU markets.

Specifically, as outlined in the complaint, PSG obtains resources on non-market terms which distort several closely related markets, allowing PSG to use those foreign subsidies to sign top players and coaches well above its potential in a normal market situation. It is also able to secure sponsorship income which does not correspond to market values. This enables them to boost their sporting performance, as well as affecting the ability of rival clubs to recruit.

This improved sporting position then enables PSG to increase its competitive position in markets related to sporting competitions (e.g. those for the audiovisual marketing of competitions or the sponsorship market), thereby artificially increasing the club’s value within said markets.

Therefore, LALIGA trusts that the European Commission, thanks to this new regulatory tool, will take the necessary measures to eliminate market distortions such as those described above, which seriously damage the sporting ecosystem.

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