The Scottish Government in 2006, allowed the transfer of a £30+ Million 19.53 hectare property near Glasgow, at Lennoxtown, for the heavily discounted (1/60th of the valuation) price of £493,000 to be transferred to Celtic FC for their training facility via the signature of one person, the CEO of Greater Glasgow Health Board. Every attempt was made to keep their ‘valuation’ below the £500,000 limit including not allowing VAT to allow this subversion of accountability. https://footballtaxhavens.wordpress.com/2013/11/13/lennoxtown-sale-approved-solely-by-tom-divers-ceo-greater-glasgow-health-board/
Similarly Glasgow City Council in 2007, for the miserly sum of £675,000 sold 5.33 hectares of land located near their stadium to Celtic which immediately became on the same date of sale, security for a low interest loan facility from the Co-operative Bank. Westhorn using Glasgow City Council‘s method of valuing estimates the land, using Govt. DVS resources, between £5-10 Million. The Lennoxtown valuation of £30+ Million was also calculated using the same method: https://footballtaxhavens.wordpress.com/2013/12/26/lennoxtown-worth-over-30-million-westhorn-between-5-10-million/
It will be demonstrated below that this is State Aid. We know, like the cheap loans from the failing Co-Operative Bank, this is a corruption of fairness in sporting competition since no other Scottish club has been afforded cheap assets thus saving funds for more playing staff. Celtic also compete in the UEFA Champions League which is attempting to level the playing field by introducing Financial Fair Play(FFP) so it should interest UEFA. Unfortunately Celtic have a conflict of interest since their Chairman of the board in 2006 when the cheap subsidised Lennoxtown transaction was approved by the board is none other than Brian Quinn who sits on the FFP committee evaluating clubs. Therefore the FFP path is compromised as is UEFA and should be set aside for the moment and the EU State Aid case pursued. Also better to be independent of UEFA whose efforts in investigating itself have proven poor and not transparent, like certain football authorities in Scotland.
Like the Lennoxtown and Westhorn land being transferred to Celtic undervalued to the extent of £35-40 Million there are two related cases of football teams receiving benefits through land deals with public authorities before the EU Competition Commissioners.
Cases before the EU Competition Commission
Firstly there is the case of PSV Eindhoven. The Independent on 7th August 2013, as well as reporting on the Spanish clubs receiving State Aid benefits also mentioned the cases of five Dutch clubs: http://www.independent.co.uk/sport/football/european/real-madrid-and-barcelonas-privileged-status-set-to-remain-for-now-8751143.html
Yet the competition office has confirmed to The Independent that it is in the advanced stages of an investigation into five Dutch clubs over illegal state aid. PSV Eindhoven, NEC Nijmegen, Willem II, Den Bosch and MVV Maastricht all face serious allegations of receiving illegal state aid from their local municipal authorities, mainly on land deals.
Reuters reported in the PSV Eindhoven case that: http://uk.reuters.com/article/2013/03/06/uk-netherlands-soccer-eu-idUKBRE9250EV20130306
In one case, the council of Eindhoven bought and leased back land worth 48.4 million euros (41.77 million pounds) from local club PSV, the Commission said.
The other case is with Real Madrid and Madrid City Council which relates to land transactions close to their ground: http://www.independent.co.uk/sport/football/european/exclusive-real-madrid-under-investigation-amid-allegations-of-illegal-state-aid-8557550.html
The investigation into Real’s deal with Madrid city council centres upon an area of land in the north of the city, Las Tablas. Having originally been valued at €421,000 when it was part of a payment by the council to the club in 1998; the same land was then valued at €22.7m in 2011, a 5,400 per cent rise, when the council decided they had to take it back. In lieu of a €22.7m payment, the club was given the land they needed to develop their stadium.
Although both cases are not direct comparisons with the Lennoxtown and Westhorn properties, the Celtic FC case with undervalued payments and the transfer of wealth by the latter method are more clear cut than Eindhoven and Real Madrid cases.
What does the EU State Aid legislation say?
EU State Aid Legislation
The full UK State Aid document is: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/15277/National_State_Aid_Law_Requirements.pdf
and the relevant clauses are:
Note in 4.3 that Greater Glasgow Health Board and Glasgow City Council are considered to represent the Member State, the UK. This case will be taken against and is therefore an embarrassment for the UK government, which naturally will not appreciate being put in this position by the Scottish government and Glasgow City Council.
And do both the Lennoxtown and Westhorn undervalued transfers fall under the legislation? Check paragraph 4.9.7 below:
And there is no need to prove corruption or fraud, it’s only the effect which counts, and that was a subsidisation of wealth allowing Celtic FC to have £35-40 Million more in team building funds.
And what are the consequences of any case being proven? According to a sports law article by Bauerle and Maier of McDermott Will & Emery: http://www.natlawreview.com/article/european-commissions-launches-first-state-aid-investigations-football-clubs
According to general EU State aid rules, the Commission may investigate public support measures going back ten years. Should the Commission come to the conclusion that the financing of a professional sports club infringes State aid rules, it can order the Netherlands to recover the aid from the clubs. The relevant public support measures could no longer be applied and all financial advantages granted to the clubs would have to be recovered.
The full extra financial benefit obtained has to be repaid. Celtic FC will have to pay the extra value for the Lennoxtown training land back to The Scottish Government and the Glasgow City Council for the Westhorn land and the taxpayers & ratepayers. That will be approx. £35-40 Million.