In this decision dated 18 December 2013, the European Commission (“Commission”) considered French public support for the construction and renovation of nine stadiums in order to host the UEFA EURO Championship in 2016 to be consistent with EU State aid rules.
This public support was necessary, proportionate and did not cause undue distortions of competition.
Furthermore, the commitments taken by French public authorities were considered sufficient guarantees by the Commission.
The Case
Following its designation as host for the UEFA 2016 in 2010, France had to comply with the UEFA requirements and thus planned to provide around €1,052 million public support for the construction and renovation of nine stadiums.
The project covered the construction of four new stadium in Bordeaux, Lille, Lyon and Nice and the renovation of five existing ones: Parc des Princes in Paris, Stade Geoffroy Guichard in Saint-Etienne, Stade Vélodrome in Marseille, Toulouse Municipal Stadium and Lens Stadium Felix Bollaert.
The Commission found that the public financing will provide an advantage at three levels: (i) for the companies involved in the construction and renovation, (ii) for the operators and (iii) for the users of the nine stadiums. This public financing, constitutive of a state aid, was subject to prior notification to the Commission pursuant to Article 108 TFEU which France failed to respect.
The Commission further assessed the compatibility of French public support with functioning of the internal market pursuant to Article 107(3)(c).
It first considered that with regard to the achievement of a policy objective of common interest, it is noted that the construction of venues for sport and other public events and supporting different types of activities which benefit the general public can be considered as a State responsibility, particularly in light of the Amsterdam Declaration on Sport and Article 165 of the Treaty, “The Union shall contribute to the promotion of European sporting issues, while taking account of its specific nature, its structures based on voluntary activity and its social and educational function” (see constant case law: SA.37109, SA.33618).
It then indicated that French authorities evidenced that France was missing competitive venues for sport and that private investors would not be ready to finance all the costs of the construction / renovation of the multipurpose regional stadiums of this magnitude (see at para. 275).
Consequently, the Commission considered that France demonstrated the need for extra capacity: these nine stadiums will supplement the pre-existing structures and will diversify the type of events that could be hosted in France in the respective regions, and in fact the nine stadiums will greatly benefit public access to these events in the respective regions (see at para. 278).
Opinion of the Commission
The Commission considered that French authorities demonstrated that there is no other alternative to this financing project by public support.
Furthermore, the aid granted for construction and renovation of the stadium is limited to the minimum necessary to ensure that they will be conform to the UEFA requirements in time for the Euro 2016 championship. And after the Euro 2016 championship, the stadiums will continue to be available for the resident clubs and will also serve as multifunctional arenas for sport, cultural and social events.
This financial support is therefore targeted and justified.
As for further commercial exploitation and use of the stadiums, France indicated that the conditions were not yet defined but committed (i) to implement a centralized system of control over the amounts of fees paid by private operators and (ii) to notify to the Commission future operating and use conditions at market conditions.
Consequently, this decision is limited to the assessment of the compatibility of the aid granted for the construction and renovation of nine stadiums. It does not cover the compatibility of the aid granted for further exploitation and use of these stadiums after the UEFA event.
Comments
This decision is consistent with the previous position held by the Commission, which found public support granted for the construction and renovation of multifunctional stadiums to be compatible with EU common objective without unduly distorting competition in the internal market (see for instance SA.37109 in Belgium; SA.35440, SA.35135, SA.36105 in Germany and SA33.618 in Sweden).
However, it would have been interesting to obtain the Commission’s position on the compatibility of this public aid for the future exploitation and use of the stadiums and, in particular, on the compatibility of the financial advantage provided to “the captive users of the nine stadiums” (i.e. resident clubs) after the UEFA 2016 Championship. Indeed, at the time of this decision, the annual rent for captive users was not yet fixed by French public authorities[1]. France thus committed to notify the Commission in 2016 concerning future operating and use conditions not yet defined.
Given the subsequent use of stadiums in other national and international championships, the nine stadiums’ operation will have a cross-border impact and may have an effect on trade and competition in the domestic market (see para.262). It is thus relevant to assess the compatibility with Article 107 TFUE of the public support granted to the captive users for further commercial exploitation and use of the nine stadiums.
To that extent, France committed to implement, in the near future, a centralized system of control over the amounts of fees paid by private operators, the resident clubs as compensation for the use of the nine stadiums.
As provided under French law, the setting of the fee must take into account: the benefits of any kind that this occupation provides to its beneficiary, the rental value of the said equipment, the revenue (e.g. ticketing) derived from the use of the equipment by the beneficiary as well as the overall cost of use by the beneficiary (e.g. operating and maintenance costs). France further indicated that a control of legality of the deliberations of the local public authorities will be reinforced when concerning the nine stadiums.
It is therefore unfortunate that we do not have access to a public version of the report which should have been notified by France in 2016. Indeed, no press release on this case has been issued by the Commission since 18 December 2013.
In this respect, the French Court of Auditors has published in September 2017 its Thematic Report on the French public supports for “EURO 2016”[2] which highlights the difficulties encountered at local level in order to guarantee proportionate fees and thus ensuring that local authorities act as market economy operators.
This Thematic Report indicated that concerns were raised as regards Lens and Marseille stadiums. Adjustments remained necessary to comply with EU regulations and to ensure that these stadiums are used at market conditions and that to limit risk of distorting competition.
A re-assessment by the Commission thus appears justified to ensure that the French public support granted for further exploitation and use of these nine stadiums is compatible with State aid regulations.
Written by Thomas Lamy and Astrid Galand from Grall & Associés
[1] The adequacy of rents must be analysed on the basis of the costs of the infrastructure including the construction/renovation costs and the costs of the provision of the building sites – state property).
[2] Synthèse du Rapport thématique de la Cour des comptes, Les soutiens publics à l’Euro 2016 en France : Quels retours d’expérience pour les pouvoirs publics ?, Septembre 2017