Carlo Ancelotti, the renowned manager of Real Madrid, is facing a potential prison sentence in Spain for alleged tax fraud. The Spanish Public Prosecutors Office is seeking a four-year and nine-month sentence for Ancelotti, who was charged in 2020 for failing to pay approximately one million euros in taxes. The charges stem from his time as the manager of Real Madrid in 2014 and 2015.
According to Spanish prosecutors, Ancelotti failed to include income from image rights in his tax returns, despite declaring himself as a tax resident in Spain and listing his domicile as Madrid. It is alleged that Ancelotti engaged in the simulation of image rights to entities lacking real activity and resided outside Spain, with the intention of evading taxes both in Spain and abroad. The prosecutors claim that Ancelotti signed private contracts assigning his image rights to entities for substantial sums, only to later modify the agreements and reduce prices significantly. Furthermore, it is alleged that he assigned 50 percent of his image rights to Real Madrid while retaining ownership through an undisclosed partnership.
The Prosecutor’s Office states that Ancelotti’s tax declarations showed negative balances due to omitted income from image rights exploitation, resulting in tax refunds. The total loss suffered by the Spanish Treasury, including omitted real estate properties abroad, is estimated at €1,062,079. Papers filed by the Madrid Community Prosecutor’s office also claimed that Ancelotti concealed revenues “intending to avoid his tax duties towards the public treasury with no justification.”
Ancelotti, who coached Real Madrid between 2013 and 2015 before returning to the club in 2021, is widely regarded as one of the most successful managers in the game. However, this legal case threatens to tarnish his reputation. Similar instances involving prominent sports figures have often been settled outside of court proceedings.
Chris Farnell, a lawyer who has worked on commercial matters for Cristiano Ronaldo, suggests that Ancelotti could negotiate a position with the revenue if it appears that the services provided by the entities were genuine. On the other hand, if everything was established correctly, Ancelotti could choose to stand his ground, as Ronaldo did in a similar situation.
In 2019, Jose Mourinho faced allegations of owing €3.3 million to Spanish tax authorities from his time at Real Madrid. He agreed to a prison term for tax fraud but avoided actual jail time by paying a fine. Lionel Messi and Ronaldo have also faced tax fraud charges relating to image rights, with their sentences being changed to heavy fines.
Ancelotti’s entourage draws parallels between his case and that of Xabi Alonso, who was acquitted of tax fraud by a court in Madrid. Alonso had been accused of evading tax from image rights between 2010 and 2012.
As Ancelotti navigates through this legal battle, he will undoubtedly hope to avoid a bumpy road and protect his legacy as one of football’s most successful managers. The outcome of the case remains uncertain, but it is clear that Ancelotti’s reputation hangs in the balance.