European Commission drops Tebas case against Man City and PSG over state funding | OneFootball

Manchester City and Paris Saint-Germain will not face any action following accusations they breached European Union (EU) competition law by receiving unfair state backing (h/t the Guardian).

La Liga president Javier Tebas filed the complaint in July 2023, alleging both clubs benefited from foreign subsidies through state-linked entities in Abu Dhabi and Qatar.

According to Tebas, this allowed City and PSG to distort the market by overspending on players and coaches and securing inflated sponsorship deals with no fair market value.

However, the European Commission will not launch a formal investigation after the preliminary review.

They deemed the evidence submitted insufficient to meet the threshold required under the EU’s foreign subsidies regulation, which came into force in 2023.

While it could have been a potential test case, linking commercial partnerships to state subsidies did not constitute grounds for a deeper probe.

Man City and PSG had denied the claims, arguing their finances were fully compliant and independently audited.

Club officials dismissed Tebas’ actions as part of a long-standing campaign against them, driven by resentment over their success and financial might.

Tebas has always been outspoken against clubs he feels have an unfair advantage in the transfer market due to their financial might.

His tenure as La Liga boss has involved strict rules to curb excessive spending.

It is a widely held belief that Man City and PSG are state-funded projects. They are considered vehicles of soft power for Abu Dhabi and Qatar, but authorities tiptoe around this reality.

The Premier League raised concerns when City Football Group took control in 2008, but did nothing.

Meanwhile, Ligue 1 welcomed PSG’s Qatari billions as a lifeline. Europe’s top competition watchdog has now done the same.

Due to political sensitivity, legal complexity or sheer reluctance to take on sovereign wealth, authorities are looking away rather than addressing the issue.