State aid for Madrid's Santiago Bernabeu stadium? It's all about the Real estate

Spanish club are keen to develop their famous stadium and make it even more lucrative than ever. But do they always play fair?

The building of the Santiago Bernabeu stadium was begun before the end of the Second World War and, taking its name from the president who presided over the club's greatest years, has become one of the most famous sporting arenas in the world.

But at Real Madrid, they foresee a future where their stadium is even bigger, better and more lucrative than ever before.

The story of how Real came to be investigated by the European Commission after allegations of state aid goes to the heart of the club's ambitions. The new shopping mall and hotel complex, as well as the naming rights associated with the roof, are part of the plan to keep Real, with an annual revenue of €512m (£434), as the highest-earning club in the world.

Last year the Uefa president, Michel Platini, and the EC competition commissioner, Joaquin Almunia, issued a robust joint-statement condemning state aid for football clubs. In December 2011, the commission had begun investigating the allegation that Madrid City Council had overestimated its debt to the football club in order to enable the transfer of the land Real needed to build the new shopping mall, hotel and stadium roof.

Timeline of events around the Bernabeu

* In 1996, Madrid City Council agreed a deal to pay €27m for part (30,000 square metres) of Ciudad Deportiva, Real Madrid's training ground in the city. The city council intended to build a basketball arena on the site, although that never took place. Four years later, in 2000, part of the training ground retained by the club was redeveloped to build the four skyscrapers that funded much of the original galacticos team of the previous decade.

* The deal in 1998 between Real and MCC meant that the latter agreed to pay half the sum in cash, €13.5m, and half in property assets, primarily in the Julian Camarillo area of the city, which were sold on by Real for the sum of €13m.

* As part of the 1998 agreement Real also received 70,000 square metres in Las Tablas district, in the north of the city, valued at €421,000. At the time of the 1998 agreement this piece of land was only regarded as 1.5 per cent of the total consideration.

* In 2011, MCC discovered it was "legally impossible" for it to transfer Las Tablas to the football club because the land was public. In fact, the city council did not even have ownership of the land until July 2000, two years after the council agreed to it being part of the original €27m deal.

* In order to remedy the situation, the city council took back Las Tablas land and revalued the property to calculate the compensation payable to the club. From a value of €421,000 in 1998, it deemed the value in 2011 to be €22.7m, a 5,400 per cent rise.

* Using equivalent property values for the area in 2011, Las Tablas, which only had planning permission to be used for sporting purposes, would be valued at just more than €1m.

* In July 2011, in lieu of the €22.7m valuation, the club was given packets of public land in return for giving up any claim to Las Tablas. Some of that land was around the club's current Valdebebas training ground, some in the Carabanchel district of the city and an area around the Bernabeu, that they were previously renting from MCC.

* In addition, in July 2011, a €2.8m fine imposed on Real by MCC was also cancelled. That fine was outstanding from Real's failure to build a multi-storey car park by the stadium as part of an earlier agreement in 1991 when they developed the more modest Esquina shopping mall.

* When the agreement in July 2011 between MCC and Real was finally signed, including land transactions and cancellation of fines, the outstanding balance between the two parties was just €8 in Real's favour. The club agreed to waive the debt.

* In November 2011, Real agreed to transfer the land in the Carabanchel district, and the land upon which the Esquina mall was built, back to MCC in return for land adjacent to the Paseo de la Castellana where the new hotel and mall complex will be built.

* Under Spanish construction law, it is not simply a case that the club can build a roof on their stadium without planning permission. The club require building rights to do so. That was also covered by a €6.6m payment included in the November 2011 agreement with MCC. It has been estimated that naming rights for the stadium, including the prime advertising site of the Bernabeu roof could be worth as much as €50m annually.

* In December 2011, the European Commission began an investigation into allegations of illegal state aid against Real. It has a year to reach a decision but can extend that if it is still awaiting information from respondents.

* There have been delays to the Bernabeu project going ahead in recent months, with protests from local residents. However, the competition investigation would be a much more significant barrier. The club say that the construction of the mall and hotel complex will mean the creation of 2,300 new jobs.

* Real said: "The valuation of all the properties have increased due to the time lapse between the different valuation that in some cases exceeds 10 years, the degree of evolution of the urban development process and the evolution of property prices."

News
news

Lincoln MP Karl McCartney 'denied all knowledge' of the Twitter activity

News
Michael Buerk in the I'm A Celebrity jungle 2014
people
News
The author PD James, who died on 27 November 2014
people

Detective novelist who wrote Death comes to Pemberley passed away peacefully at her home, aged 94

Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
filmDirector said film would 'never have been financed' with ethnic minority actors in key roles
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Life and Style
tech
News
people
Life and Style
tech Manband spurn Spotify to stream album exclusively with Google
News
Irradiated turkey and freeze dried mash potato will be on the menu this thanksgiving
video
News
Andy Murray with his girlfriend of nine years, Kim Sears who he has got engaged to
peopleWimbledon champion announces engagement to girlfriend Kim Sears
Caption competition
Caption competition
Latest stories from i100

Bleacher Report

Daily Quiz
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game
There's a Good Girl exhibition: How female creatives are changing the way women are portrayed in advertising

In pictures: There's a Good Girl exhibition

The new exhibition reveals how female creatives are changing the way women are portrayed in advertising
UK firm Biscuiteers is giving cookies a makeover - from advent calendars to doll's houses

UK firm Biscuiteers is giving cookies a makeover

It worked with cupcakes, doughnuts and macarons so no wonder someone decided to revamp the humble biscuit
Can SkySaga capture the Minecraft magic?

Can SkySaga capture the Minecraft magic?

It's no surprise that the building game born in Sweden in 2009 and now played by millions, has imitators keen to construct their own mega money-spinner
The King's School is way ahead of the pack when it comes to using the latest classroom technology

Staying connected: The King's School

The school in Cambridgeshire is ahead of the pack when it comes to using the latest classroom technology. Richard Garner discovers how teachers and pupils stay connected
Christmas 2014: 23 best women's perfumes

Festively fragrant: the best women's perfumes

Give a loved one a luxe fragrance this year or treat yourself to a sensual pick-me-up
Arsenal vs Borussia Dortmund: Alex Oxlade-Chamberlain celebrates century with trademark display of speed and intuition

Arsenal vs Borussia Dortmund

The Ox celebrates century with trademark display of speed and intuition
Billy Joe Saunders vs Chris Eubank Jnr: When two worlds collide

When two worlds collide

Traveller Billy Joe Saunders did not have a pampered public-school upbringing - unlike Saturday’s opponent Chris Eubank Jnr
Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?