Herrn Frank-Walter STEINMEIER Bundesminister Des Auswärtigen Werderscher Markt 1 10117 Berlin DEUTSCHLAND

EUROPEAN COMMISSION Brussels, 11.06.2014 C(2014) 3603 final In the published version of this decision, some PUBLIC VERSION information has been omitted, pursuant to articles 24 and 25 of Council Regulation (EC) This document is made available for No 659/1999 of 22 March 1999 laying down information purposes only. detailed rules for the application of Article 93 of the EC Treaty, concerning non-disclosure of information covered by professional secrecy. The omissions are shown thus […]. Subject: SA.37058 (2013/N) – Germany Sachsenring – Reconstruction 2012 Sir, 1. PROCEDURE (1) On 25 November 2011, the Commission registered a complaint concerning different measures in favour of Sachsenring. The Commission sent several requests for information to Germany. (2) On 12 July 2013, the German authorities notified the support for the reconstruction of the Sachsenring racetrack for the organisation of Moto GP 2012. On 23 July 2013, 15 October 2013 and 26 November 2013, the Commission sent requests for information targeting both the measures notified and those brought up by the complainant, which Herrn Frank-Walter STEINMEIER Bundesminister des Auswärtigen Werderscher Markt 1 10117 Berlin DEUTSCHLAND Commission européenne,1049 Bruxelles/Europese Commissie, 1049 Brussel – BELGIQUE/BELGIË Tel. +32 229-91111. 1 Germany responded to on 15 and 16 August 2013, 31 October 2013, 17 January 2014 and 14 February 2014, respectively. (3) On 24 March 2014, the complainant withdrew the complaint. (4) Following Commission's requests for clarifications of 2 April 2014, 24 April 2014 and 8 May 2014, Germany replied on 3 April 2014, 2 May 2014 and 14 May 2014, respectively. 2. DESCRIPTION OF THE MEASURES 2.1 Subject of the case (5) Sachsenring is a motor racetrack which exists since 1927 in Hohenstein-Ernstthal near Chemnitz in Saxony, Germany. The race track is located around 50 km from the border with the Czech Republic. Since 1998, it features the annual German motorcycle Grand Prix (Moto GP) of the Federation of International Motorcycling (FIM) Grand Prix motorcycle racing world championship (on average more than 200.000 visitors at the weekend of the race). Professional races (including MotoGP and the International German Motorbike Championship) as well as the ADAC GT Masters for amateurs and professionals at Sachsenring are limited to maximum ten days annually.1 In the remaining parts of a year, Sachsenring is used for other motorsport competitions of national relevance (Mini-Bike-Championship) and of regional relevance, traffic safety training, free driving (training) of the general public (more than 100 days annually) and car testing operated by VSZ. Apart from motor sport, other sport, cultural, congress and educational activities are carried out there (e.g. the Saxon Traffic Safety Day). (6) Apart from Sachsenring which is homologised for the organisation of Grand Prix races by the FIM, the following race tracks could in theory organise a MotoGP in Germany: Lausitzring (road distance of 152 km from the Sachsenring), Nürburgring (484 km from the Sachsenring) and Hockenheimring (444 km from the Sachsenring).2 However, none of these race tracks is homologised by FIM for the MotoGP races. In the Czech Republic, the MotoGP is organised in Brno (387 km from the Sachsenring). The race track in Most (111 km from the Sachsenring) is not homologised by FIM and there can be maximum one MotoGP in the Czech Republic. Ownership and operation of Sachsenring (7) The land on which the Sachsenring is built is owned mainly by Verkehrssicherheitszentrum am Sachsenring GmbH & Co. KG (VSZ)3 (38%) and Zweckverband “Am Sachsenring” (ZV)4 (31.1%). The remaining owners of the land are the town Hohenstein-Ernstthal (24.5%), the municipality of Bernsdorf (2.6%), the Landkreis Zwickau (2.1%) and others (1.7%). 1 The 10 days refer to the admissibility of exceeding the otherwise allowable noise values. 2 Another race track within a radius of 250 km from the Sachsenring is Oschersleben (248 km). 3 The shareholders of VSZ are: ADAC Sachsen e.V. (26 %), VSZ Beteiligungs-GmbH (26 %), Landkreis Zwickau (16 %), BKP Beteiligungs-GmbH (11 %), BMT Ingenieur-Consulting GmbH (11 %) and Motor Presse Stuttgart GmbH & Co. KG (10 %). 4 The members of ZV are the towns Hohenstein-Ernstthal (65%) and Oberlungwitz (35%). (8) ZV let its land at Sachsenring by a lease contract of 30 July 2002 to VSZ. Following the establishment of Sachsenring-Rennstrecken-Management GmbH (SRM)5 on 20 December 2004, the following contracts were concluded on 6 July 2007: ZV and VSZ agreed with the consent of SRM to terminate the lease contract of 30 July 2002 with effect as of 30 June 2007. ZV let its land at Sachsenring to SRM for its business activities from 1 July 2007 until 31 December 2021. The rent to be paid by SRM to ZV amounts annually to 76 000 EUR plus 50% of a variable part of 50% of variable rent which SRM receives from VSZ. SRM sublet the land at Sachsenring to VSZ for driving trainings, car tests, presentations, trade fairs and motor sport events from 1 July 2007 until 31 December 2021. The rent to be paid by VSZ to SRM amounts annually to 88 000 EUR plus 10% to 20% of the revenue of VSZ from Sachsenring. (9) In result of the above contracts, VSZ uses the land of ZV over the whole year. VSZ has to take over all maintenance, beautification and repair costs for the entire lease period of 20 years. In view of the events organised by VSZ, that company incurred a loss of […..] EUR in 2012.6 (10) On the basis of a contract of 10 May 1997, VSZ sublet the totality of land used by it to ADAC Sachsen e.V. (ADAC Sachsen) for the organisation of motor sport events maximum ten days annually until 31 December 2021. The rent to be paid by ADAC Sachsen amounts annually to [...] million DM (around [...] million EUR) plus [...] % of the revenue from the sale of tickets. In view of the motorsport events other than Moto GP, ADAC Sachsen incurred a loss of 1 028 415 EUR in 2012.7 (11) In the remaining days of a year the race track is used by VSZ for driving training against consideration from the participants. (12) By contract of 26 April 2012, ADAC Sachsen transferred the right to organise Moto GP 2012 from 6 to 8 July 2012 to SRM.8 SRM provides to ADAC Sachsen around 2 5 The shareholders of SRM are Landkreis Zwickau (previously Landkreis Chemnitzer Land) as well as the towns Hohenstein-Ernstthal, Oberlungwitz and Lichtenstein and the municipalities of Gersdorf and Bernsdorf. On 25 July 2013, the shareholders increased by resolution of the general meeting the share capital of the company from 25 000 EUR to 197 500 EUR. On a precautionary basis, Germany classifies the capital injection as de minimis aid. 6 In 2012, VSZ had revenues from organising driving safety training and other events of EUR [...] and costs of EUR [...] . Consequently, VSZ as event organiser had a minus of EUR [...] in 2012. In 2013, VSZ had revenues from organising driving safety training and other events of EUR [...] and expenses of EUR [...]. This results in a minus of EUR [...]. 7 In 2012, ADAC Sachsen had revenues from the motorsport events other than Moto GP of EUR 1 236 824 and costs of EUR 2 265 239. Consequently, ADAC Sachsen had a minus of EUR 1 028 415 in 2012. In 2013, ADAC Sachsen had revenues from the motorsport events other than Moto GP of EUR 434 775 and expenses of EUR 859 401. This results in a minus of EUR 424 626. 8 For MotoGP 2013 at Sachenring, a contract with similar content was concluded between SRM and ADAC Sachsen on 14 January 2013. 000 free tickets for this event and other benefits. In view of Moto GP 2012 SRM incurred a loss of [...] EUR because of bad weather.9 (13) The sport organiser of Moto GP 2012 was ADAC Beteiligungs- und Wirtschaftsdienst GmbH (ADAC Germany). ADAC Germany concluded contracts with third parties, particularly with the licensor DORNA S. L. (DORNA), a Spanish company. The related costs are born by SRM on the basis of a contract concluded between ADAC Germany and SRM on 1 December 2011 for 2012 with an annual prolongation option until 2016. (14) In summary, with respect to driving safety trainings and free driving VSZ can be regarded as the main operator. Those activities are the main uses of Sachsenring. SRM can be regarded as a sub-operator with respect to the MotoGP. ADAC Sachsen can be regarded as a sub-operator with respect to motorsports with less importance than the MotoGP. Furthermore, DORNA granted ADAC Germany a license to organise the German MotoGP. Until 2011, ADAC Germany gave this right to ADAC Sachsen. From 2012 on until 2016, ADAC Germany delegated the right to organise the MotoGP at Sachsenring to SRM. (15) Pursuant to Germany, the revenue from the event organisers is not sufficient to finance investments in infrastructure that increase the safety, environmental or other standards which are in the public interest. The net revenues of ZV in the year 2012 amounted to 276 000 EUR.10 The net expenses were around 1 955 000 EUR (including 1 571 485 EUR11 for the curves). The financial gap in the 2012 cashflow thus amounts to about 1 680 000 EUR. 2.2 The aid donors (16) In the case at hand, three entities grant aid: Land Saxony and the two members of ZV (municipalitites of Hohenstein-Ernstthal and Oberlungwitz). 2.3 The notified measures: safety measures regarding two Sachsenring curves carried out for the organisation of Moto GP 2012 (17) In order to meet safety requirements - not based on administrative law, but set by the FIM12 - the reconstruction in 2012 intended to modernise the racetrack (mainly 9 In 2012, SRM had revenues of EUR [...] and costs of EUR [...] .

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