Brazil national team coach Carlo Ancelotti has been sentenced to one year in prison by a Spanish court for tax fraud relating to undeclared image rights revenues during his first stint at Real Madrid in 2014.
The Provincial Court of Madrid handed down the verdict Wednesday, also imposing a fine of €386,361.93 (£333,029) on the 66-year-old Italian. However, Ancelotti will avoid serving jail time under Spanish law, which allows sentences under two years for non-violent crimes to be suspended for first-time offenders.
The court found Ancelotti guilty of failing to declare income from image rights in 2014, though he was acquitted of a separate charge relating to alleged personal income tax fraud in 2015. Prosecutors had initially sought a prison term of four years and nine months, along with a fine of €3.2 million (£2.7m).
Defense Claims Relied on Advisers
During his court appearance in April, Ancelotti maintained his innocence and claimed he had followed professional advice. I got in touch with my British adviser and I didn’t think any more about it because it all seemed right,” Ancelotti told the court.
“I never thought a fraud could have been committed. But, given that I’m here, I guess things weren’t done that right,” the former Real Madrid coach admitted during testimony.
Ancelotti’s lawyer, Carlos Zabala, argued during closing statements that Real Madrid was responsible for “the contractual nonsense” that caused his client’s problems. The defense claimed the club sought to pay part of Ancelotti’s salary through image rights to achieve “a more convenient taxation.”
Mr. Ancelotti did not fully understand what he was signing,” Zabala told the court, adding that his client had been subjected to “public humiliation” by Spanish tax authorities who refused to settle the case out of court.
Latest in String of Football Tax Cases
The verdict makes Ancelotti the latest high-profile figure in Spanish football to be convicted of tax fraud related to image rights. The cases have become increasingly common as Spanish authorities crack down on tax evasion in professional sports.
In 2016, Barcelona star Lionel Messi and his father Jorge were sentenced to 21 months in prison for defrauding Spain of €4.1m (£3.5m) in taxes. Like Ancelotti, they avoided jail time but were required to pay substantial fines.
Cristiano Ronaldo admitted to committing tax fraud during his time at Real Madrid in 2019, agreeing to pay a €18.8m (£16.5m) fine in exchange for a 23-month suspended prison sentence. The Portuguese star’s case involved undeclared income from image rights between 2011 and 2014.
Former Real Madrid manager Jose Mourinho was given a one-year suspended prison sentence in 2019 after admitting tax fraud during his managerial reign at the Spanish club. He agreed to pay €2.2m (£1.9m) in fines as part of a settlement with authorities.
Complex Image Rights Arrangements
The court heard that when Ancelotti joined Real Madrid for his first spell in 2013, a firm was set up on the club’s advice allowing him to collect 15 percent of his annual salary of six million euros through image rights. This arrangement allegedly enabled him to pay less tax than would have been due on regular income.
“At that time, all the players and coaches were doing it that way, it seemed like the right thing to do,” Ancelotti testified, noting that Mourinho had a similar arrangement during his time at the club.
The Italian coach claimed he “never realised that something wasn’t right” until 2018 when the public prosecutor’s office opened an investigation into his finances.
Prosecutors alleged Ancelotti set up a “confusing” and “complex” system of shell companies to hide his extra earnings during this time from image rights and other sources such as real estate, while only reporting his salary to tax authorities.
Current Role with Brazil
Ancelotti left Real Madrid at the end of the 2024-25 season to take over as head coach of Brazil’s national team, becoming the country’s first foreign manager. The Brazilian Football Confederation announced his appointment on May 12, 2025, with his official start date set for May 26, 2025.
The CBF reportedly pays Ancelotti around €177,500 ($197,000) per week, more than double what his predecessors earned. He signed a one-year contract taking him through the 2026 FIFA World Cup in the United States, Mexico, and Canada.
CBF President Ednaldo Rodrigues hailed the appointment as “a statement to the world that we are determined to recover the top of the podium,” referring to Brazil’s quest to win their first World Cup since 2002.
Illustrious Coaching Career
Despite the tax conviction, Ancelotti remains one of the most successful coaches in football history. He is the only manager to have won titles in all five major European leagues and holds the record for Champions League victories as a coach with five trophies.
During his two spells at Real Madrid, Ancelotti won three Champions Leagues and two LaLiga titles, cementing his status as one of the club’s most successful managers. His departure came after a disappointing final season that saw Madrid eliminated in the Champions League quarterfinals and beaten by Barcelona in the Copa del Rey final.
In addition to the €386,361.93 fine that matches the unpaid tax amount, Ancelotti has been barred from receiving government grants in Spain. However, provided he avoids any legal troubles over the next two years, his one-year prison sentence will remain suspended.
The case highlights ongoing efforts by Spanish authorities to combat tax evasion in professional football, particularly concerning image rights arrangements that have been commonly used to reduce tax obligations.
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Image Credit:
Carlo Ancelotti – Photo by Анна Нэсси (Anna Nessy), licensed under CC BY-SA 3.0, via Wikimedia Commons.
