MADRID The European Commission is studying information it has on allegations of illegal state aid to Real Madrid and other European clubs, a spokesman for competition policy said on Wednesday.
The nine-times European champions are alleged to have received a favourable deal for land around their Bernabeu stadium from the Madrid city council, as they look to develop a new shopping mall and hotel complex.
Britain's The Independent newspaper said the dealings between Real and the city council, dating back to a 1996 agreement between them, constituted illegal state aid under article 87 of the Treaty of the European Community.
It is alleged that the council over-estimated its debt to the club so they could give Real the prime city-centre land they require for the new development.
"Citizens and companies in several member states have sent information to the Commission alleging state aid to various football clubs," Antoine Colombani, a spokesman for competition policy at the European Commission, told a briefing on Wednesday.
"The Commission is indeed examining the situation of Real Madrid as it does with similar allegations brought to its attention.
"The Commission is currently analysing the information at its disposal and has not decided yet whether or not to open a formal investigation."
Real Madrid and the Madrid city council did not respond immediately to a request for comment.
The EC has said it backs the Financial Fair Play policy which is being implemented by European soccer's governing body UEFA, aimed at limiting the spending of the major clubs.
Under the new rules, clubs are forbidden from receiving any form of state aid and will be eligible for entry to European competition only if their expenditure is less than generated revenue.
Real were the richest club by income in 2011-12 according to the latest Deloitte "Football Money League" ranking published in January.
In response to The Independent's questions about the acquisition of the land, Real said they had not received "any special privileges in its real estate activities since it has always been subject to the then current legislation and has received the same treatment as any other entity".
The club said the valuation of the land in 2011, which found its value to have increased 54-fold, was carried out by Madrid City Council, and was therefore "independent".
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."
Last month, the EC's competition watchdog said it would investigate whether financial support given to five Dutch football clubs complied with EU rules on state aid.
The in-depth investigation, which centres on clubs NEC Nijmegen, MVV Maastricht, Willem II Tilburg, PSV Eindhoven and FC Den Bosch, concerns deals done between the clubs and the local council, often involving real estate transactions.
"I strongly believe that professional football clubs should be well managed and not ask for help from the tax-payer when facing financial difficulties," Competition Commissioner Joaquin Almunia said.
(Additional reporting by Temis Tormo and Foo Yun Chee in Brussels, editing by Clare Fallon)