SWANSEA Council has been asked to explain the funding arrangements at the Liberty Stadium by the European Commission.
Officials have asked the council to supply details of a deal which has enabled Swansea City and the Ospreys to play there since 2005.
It was constructed by the council at a cost of £27 million.
Now both clubs and the council have been caught up in the commission’s ever-expanding investigation into illegal state aid in football. If it is found any rules have been broken then the clubs could end up handing over money to the local authority.
State aid rules, policed by the European Commission, limit how much public money can be given to private companies.
The commission is currently investigating a number of clubs — including Spanish giants Barcelona and Real Madrid — over alleged irregular public funding.
Both the Swans and Ospreys pay a peppercorn rent to the Swansea Stadium Management Company (SSMC), a body which is a partnership between the council and the two clubs.
And following a freedom of information request, the council confirmed that the commission has “raised questions” about the agreement and whether it complies with state aid regulations.
Last night a spokesman for Swansea Council said: “The European Commission has asked us a number of questions in relation to the Liberty Stadium and currently we are in dialogue with them, as are a large number of sports clubs from across Europe.”
If it were proved that the use of the Liberty Stadium does break European law, then both clubs would face paying back money, plus interest. The Liberty is not the only stadium in the area to have been built by a local authority.
Concerns have been raised about Carmarthenshire Council’s funding of Parc y Scarlets in Llanelli and loans to the regional rugby side.
The stadium and related facilities, which opened in 2008, cost £25.4 million to build and £18.3 million was provided in differing forms by the county council.
The land is owned by the authority but the stadium and surrounding land has been leased to the club for 150 years.
A Carmarthenshire Council spokeswoman recently told the Post: “The council took independent legal advice as a requirement of its decision back in 2007.
“Such advice clarified that due to the way the original agreement was set out, state aid did not apply.
“Despite the same questions being asked and responded to repeatedly over the past six years, we remain confident with this advice, and have reiterated this on several occasions.”