France Update: Extension of State aid for the professional sports sector

Decree No. 2021-1108 of 23 August 2021 published yesterday in the Official Journal of the French Republic extends, for the first half of 2021, the State aid created by the decree of 11 December 2020 * with the objective of partially compensating the operating losses of ticketing and associated catering due to the general measures taken by the administrative authorities, prohibiting or limiting directly or indirectly the reception of the public, to deal with the Covid-19 epidemic.

State aid is reserved for sports players who have organised one or more sporting events or competitions between 10 July 2020 and 29 June 2021 at the latest and is paid in accordance with the procedures defined in the decree of 23 August 2021 referred to below.

1 – The actors likely to benefit from this state aid

The beneficiaries of this scheme are the same as those referred to in the decree of 11 December 2020, namely:

• The sports associations and sports societies they have formed that cumulatively meet the following two conditions:
  • Participation in professional sports activities organized by a professional league;
  • responsibility for the sale of tickets to a sporting event or competition and, where applicable, the sale or distribution of food or drink;
• The delegated sports federations mentioned in Article L.131-14 of the Code of Sport that are organizers of sports events or competitions in which the selections of national teams participate or at the end of which a national title is issued, or organizers of international sports events or competitions;
• Professional leagues constituted pursuant to Article L. 132-1 of the Sports Code;
• The organizers of sporting events mentioned in Article L. 331-5 of the Sports Code.

2 – Calculation of compensated revenue losses

For the calculation, it is taken into account on the one hand:

• loss of revenue during the period from July 10, 2020 to July 29, 2021;

And on the other hand:

• for the period between 10 July 2020 and 31 December 2020, revenue realised over the same period during the last financial year ended or for sporting events or competitions that have been carried over, or have been shifted to a date other than that initially planned in relation to the previous year, the revenue from this sporting event or competition organised during the previous financial year ended;
• for the period between 1^er January 2021 and the date on which the measures referred to in Article 1 of the Decree of 11 December 2020 ceased to be applied, and by 29 June 2021 at the latest, the revenues made over the same period during the penultimate financial year ended or for sporting events or competitions that have been postponed, or have been shifted to a date other than that initially planned in relation to the previous year, the revenue realised at that sporting event or competition organised in the penultimate financial year ended.

The decree of 23 August 2021 also specifies that the loss of gross operating surplus that can be compensated by the granting of State aid corresponds to the difference between:

• On the one hand, the gross operating surplus as identified by the accounting documents relating to the following two periods:
  • that between 10 July and 31 December 2020;
  • the one between the 1^er January and the date on which the measures referred to in Article 1 ceased to apply, by 29 June 2021 at the latest;
• On the other hand, the gross operating surplus established by the accounting documents relating to the same periods for the financial years mentioned in 2° of II of the amended article 2.
   

3 – The procedures for granting State aid

To obtain the allocation and payment of State aid, the beneficiary likely to be eligible sends his application to the Sports Directorate of the Ministry in charge of Sports, by any means allowing him to be given certain date:

• By 31 December 2020 at the latest, for the aid requested for the period from 10 July to 31 December 2020;
• No later than one month after the publication of the decree 23 August 2021 for the aid requested under the period of 1^er January 2021 until the date on which the measures referred to in Article 1^er of the decree ceased to be applied and no later than 29 June 2021.

The State aid is the subject of three payments allocated to the eligible beneficiary by decision of the Sports Directorate in accordance with the following procedures:

• A first payment, which may not exceed 70% of the estimated amount of the loss of revenue for the period from 10 July to 31 December 2020;
• A second payment, which may not exceed 70 % of the estimated amount of the loss of revenue in respect of the period of 1^er January 2021 on the date on which the measures referred to in Article 1 ceased to apply and by 29 June 2021 at the latest;
• Where applicable, a third payment corresponding to the sum of the balances of the two periods defined in section 2 of the Decree, calculated after examination of the loss of gross operating surplus of these two periods.

The accounting documents allowing the loss of gross operating surplus to be assessed must be sent to the Sports Department by the eligible beneficiary by 31 December 2021 at the latest.

The rate for calculating the maximum amount of State aid corresponds to 15 % of the loss of revenue for each eligible beneficiary.

The maximum amount of State aid is set at EUR 5 million for each eligible beneficiary.

The maximum amount of State aid paid is set at EUR 5 million for each period referred to in Article 2(2) of II of the Decree of 23 August 2021 and for each eligible beneficiary.

Finally, it is specified that the total amount of aid paid, in its wording resulting from Decree No. 2021-1108 of 23 August 2021 and Decree No. 2021-310 of 24 March 2021 establishing aid to compensate for the uncovered fixed costs of companies whose activity is particularly affected by the Covid-19 epidemic, may not exceed EUR 14 million for the two periods referred to in Article 2(II) of 2°, of the Decree of the 23 August 2021 and for each eligible beneficiary.

*Decree No. 2020-1571 of 11 December 2020 creating State aid to compensate for the loss of revenue from professional sport due to the measures taken to deal with the covid-1 epidemic

By Jean-Baptiste-Guillot and Virginie Molho, France, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact france@transatlanticlaw.com

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