Carlo Ancelotti, the renowned football manager currently at the helm of Real Madrid, is facing legal proceedings for alleged tax evasion in Spain. The Madrid court handling the case announced that Ancelotti’s trial will commence on Wednesday and is anticipated to conclude within two days. The prosecution alleges that Ancelotti failed to declare income related to his image rights to the Spanish tax authorities between 2014 and 2015, resulting in an estimated loss of over €1 million ($1.1 million) to the Spanish treasury. Prosecutors are seeking a prison sentence of four years and nine months for the 65-year-old Italian, who is obligated to attend the court hearings.
The core of the accusation revolves around Ancelotti’s tax declarations during his first tenure at Real Madrid, from 2013 to 2015. While he declared his salary from the club, prosecutors claim he omitted income generated from his image rights. This omission is considered particularly significant given Ancelotti’s declared tax residency in Spain and his stated residence in Madrid during that period. The prosecution further contends that Ancelotti employed a complex network of shell companies to obscure these earnings and potentially other income streams, including real estate holdings. This “confusing” and “complex” system, as described by the prosecution, allegedly served to conceal his financial activities from the Spanish tax authorities.
The legal proceedings against Ancelotti stem from a 2023 court order that mandated his trial, although a specific date was not initially set. Ancelotti himself addressed the accusations last year, dismissing them as “an old story” that he hoped would be resolved swiftly. However, the upcoming trial suggests that the matter is far from concluded. The charges bring into focus the complexities of image rights and their taxation, particularly within the highly lucrative world of professional football.
Ancelotti’s illustrious career in football management, marked by numerous titles and achievements, adds another layer of complexity to the case. His extensive experience across top European clubs underscores the global reach of his image and brand, which are central to the allegations. Having managed some of the most prestigious teams in the world, including AC Milan, Chelsea, Paris Saint-Germain, Bayern Munich, and Real Madrid, Ancelotti has built a reputation as one of the most successful coaches in the history of the sport. This success, coupled with his five Champions League titles – a record for any manager – has undoubtedly contributed to the substantial value of his image rights, the very subject of the legal dispute.
The trial’s outcome will not only have personal consequences for Ancelotti but could also set a precedent for the handling of image rights taxation within the football industry. The increasing commercialisation of the sport has made image rights a significant revenue stream for players and managers alike, often involving complex legal and financial structures. The Ancelotti case highlights the potential pitfalls of these arrangements and the scrutiny that tax authorities are increasingly applying to such earnings.
Ancelotti’s legal battle underscores the challenges faced by high-profile individuals in managing their financial affairs, especially in the context of evolving tax regulations. As the trial unfolds, it will be closely watched not only by the football world but also by legal and financial experts, given its potential implications for the broader landscape of image rights and taxation in professional sports. The court’s decision will undoubtedly shape future practices and could influence how athletes and their representatives structure their financial dealings to comply with increasingly stringent tax laws.
