In a major development from Spain, Carlo Ancelotti, one of football’s most successful and respected managers, has been sentenced to one year in prison for tax fraud. The charges relate to his first tenure as Real Madrid manager in 2014, during which he allegedly failed to declare and pay taxes on income earned from image rights.

The ruling, delivered by a Spanish court, follows an investigation into how some of Ancelotti’s earnings were structured and reported. Spanish prosecutors accused the Italian coach of using a system that diverted a portion of his income to external companies in tax havens, thereby avoiding Spanish tax obligations. Originally, they sought a much harsher punishment—four years and nine months in prison and over $3 million in fines. However, Ancelotti cooperated with authorities and voluntarily repaid a portion of the amount owed in December 2024, which played a role in the reduced sentence.

Under Spanish law, prison terms under two years for first-time, non-violent offenders are typically suspended, meaning Ancelotti is unlikely to serve actual jail time. However, the conviction remains on his record, and any future legal trouble could lead to stricter penalties.

This isn’t the first time Spanish football has been rocked by tax fraud cases involving high-profile figures. Lionel Messi, Cristiano Ronaldo, and Xabi Alonso have all faced similar accusations over the past decade. Messi and Ronaldo were both handed suspended prison sentences and fined, while Alonso was eventually acquitted. These cases have shone a spotlight on how image rights income has been handled in Spain and how it became a loophole for tax avoidance.

La Liga expert Guillem Balagué explained how widespread this practice once was in Spanish football. According to him, it was common for clubs and tax advisors to recommend diverting image rights revenue into offshore companies to minimize tax obligations. “It was part of a culture,” Balagué said. “In Spain, if you avoid taxes, you’re a hero.”

In Ancelotti’s case, he was initially accused of tax fraud for both 2014 and 2015, but was acquitted of wrongdoing in 2015. The court acknowledged his admission of error and his effort to make amends, which ultimately helped him avoid the harsher penalties prosecutors originally demanded.

Now managing the Brazilian national team, Ancelotti’s reputation takes a significant hit. While this legal issue is unlikely to impact his coaching duties directly, it does raise questions about transparency and accountability among top figures in football.

This case serves as another reminder that even legends of the game are not above the law. And while Ancelotti may avoid a prison cell, the stain on his legacy is now firmly in the public eye—another chapter in football’s long and complicated relationship with tax justice.