Mihir Bose: Brussels, not Westminster, may turn the tide for Barry Hearn’s Olympic Stadium bid

Disenchantment with Europe is now so prevalent in Britain that it seems hard to find anyone who looks to Europe to help their cause. Yet Barry Hearn, who has got nowhere in his fight to share the Olympic stadium with West Ham, may find Brussels rather than Westminster is his best bet.

At the moment, having spent three quarters of a million pounds in legal fees over three years and got nowhere – his application for a judicial review having been turned down by the High Court – he is taking a rest from making lawyers rich. Instead he has turned to the House of Lords. Its report on the Olympic legacy having gathered evidence from far and wide, including Hearn and West Ham, is due in November. For Hearn the report has assumed great importance

As Hearn put it to me: “I’m hoping that they have understood the common sense approach of saying: what’s wrong with Leyton Orient ground sharing? I don’t know this is going to happen. My hope is that the House of Lords will say, we would recommend this to be looked into, one, because it gives more value to the taxpayer for his money and two because it represents a more fundamental Olympic legacy than a State sponsorship of a massive commercial enterprise.”

West Ham have strongly disputed some of Hearn’s arguments saying their renting of the Olympic stadium represents a great deal. And while one can understand why Hearn is pinning his hopes on the Lords, even Hearn is aware that the report carries no judicial powers. The Lords may well ask for the sharing question to be looked at again but it does not follow that this will mean the deal with West Ham will be unstitched. But this is where Europe comes in.

For should Hearn look across the channel at Brussels he will find that the much derided European Commission is looking hard into the question as to whether the deals the Dutch municipal authorities have made with some Dutch clubs violate EU law. While this inquiry may not turn out to be as much of a game changer as the Bosman inquiry it is both fascinating and could have some far reaching consequences.

To best appreciate this look at the five Dutch clubs the competition directorate of the commission is looking at

They are NEC (1st league), where the Municipality of Nijmegen bought off a claim made by NEC for €2.2 million.

MVV (2nd league), where the Municipality of Maastricht waived a claim of € 1.7 million on MVV and bought the stadium for €1.85 million.

Willem II (1st league) where the Municipality of Tilburg lowered rent of stadium with retroactive effect, total advantage €2.4 million.

PSV (1st league) where the Municipality of Eindhoven bought land from PSV for €48.385 million and leased it back to this club.

FC Den Bosch (2nd league) where the Municipality of Den Bosch waived a claim of €1.65 million on FC Den Bosch and bought training facilities for €1.4 million.

The first three deals took place in 2010, the last two in 2011.

The assessment is under ARTICLE 107(1) TFEU and here it is worthwhile to look at what the article says constitutes state aid.

For a measure to constitute State aid in the meaning of Article 107(1) TFEU, the following cumulative conditions needs to be fulfilled:

There needs to be a selective advantage in favour of certain undertakings or the production of certain goods;

There needs to be a use of State resources for this;

The aid must distort or threaten to distort competition;

The aid must affect trade between Member States.

Now the sceptic can argue how can Leyton Orient, in the first division of the Football League, not being allowed to share the Olympic stadium fall into this category?

However as the commission when announcing this investigation made clear: “It should firstly be noted that all of the football clubs in question are active in professional football, which must be qualified as an economic activity in line with the jurisprudence of the Court of Justice in this regard. Regardless of their legal forms, those football clubs must be deemed to constitute undertakings in the meaning of Article 107(1) TFEU.”

But what about clubs like some of the Dutch ones being looked into who have never played in Europe and on present form are unlikely ever to? The Dutch authorities were quick to seize on this and in their reply to the Commission’s request for information questioned the impact of any aid on the internal market for clubs not playing football at European level. The same, of course, applies to Orient, not even its most fervent supporter, despite its form this season, could be dreaming of trips to Europe.

The commission’s response was very interesting. “Each of the football clubs in question is a potential participant in European football tournaments. The Commission would further point out that professional football clubs deploy economic activities in several markets other than participating in football competitions, such as the transfer market for professional players, publicity, sponsorship, merchandising or media coverage. Aid to a professional football club strengthens its position on each of those markets, most of which cover several Member States.

“As regards the market for the transfer of players…. 509 players changed teams in the Netherlands between 9 June and 31 August 2011, 134 of which left Dutch football in favour of a foreign club and 103 arrived in the Netherlands. These figures do not distinguish between clubs in the EEA and third countries, but press releases from clubs on specific transfers show that at least part of the international transfers took place inside the EEA.

“Therefore, if State resources are used to provide a selective advantage to a professional football club, regardless of the league in which it plays, such aid is likely to have the potential of distorting competition and to affect trade between Member States. Even a club like FC Den Bosch, which so far has never participated in a tournament at European level, expected income from future transfers of its most successful players. The Commission also notes that several sponsors of the clubs in question deploy activities outside the Netherlands. Therefore, at this stage of the investigation, the Commission takes the view that aid measures in favour of the football clubs in question are likely to distort competition and to affect trade between Member States.”

And to ram the point home the commission points out that back in 21 March 2012 the commission and Michel Platini agreed that the control of State aid to professional football and UEFA’s Financial Fair Play rules address identical concerns and that professional football clubs should live within their own means.

There is no way of knowing what the commission’s inquiry may decide but there can be no doubt that the way the commission is going about this inquiry a journey to Brussels, even if it leads to more legal fees, may prove Hearn’s best route to force his way into the Olympic stadium

And if Hearn does go to Brussels then then we can be sure the row over the stadium will rumble on for a long time.

Mihir Bose was the first sports editor of the BBC. He has worked for various media outlets and launched the Inside Sport column for the Daily Telegraph. Now a freelance journalist he has written 28 books. His latest book: Game Changer: How the English Premier League Came to Dominate the World was published by Marshall Cavendish for £14.99. Follow Mihir on Twitter @mihirbose