What Red Bull investment means for Leeds United’s future — i 31/5/24

The drinks giant have bought a minority stake in the Yorkshire club - but will we see Red Bull Leeds in the future?

By George Simms

Red Bull have bought a minority stake in Leeds and have signed a multi-year deal to be the club’s front of shirt sponsor.

The energy drink brand have a controversial image in football due to their ownership of RB Leipzig and Red Bull Salzburg.

Both clubs are considering footballing cuckoos, having implemented name, kit colour and branding changes to render long-established clubs totally unrecognisable.

Leeds fans have understandably been concerned this could also happen to their side – but is that a genuine possibility and what does Red Bull’s sponsorship and investment mean for Leeds?

i spoke to football finance expert Kieran Maguire to find out.

What Red Bull sponsorship means for Leeds’ promotion prospects

As Leeds chairman Paraag Marathe told The Athletic, the Red Bull deal is a “significant minority investment.”

Marathe said: “From a front-of-shirt standpoint, it’s a significant deal for us. It’s a significant partnership, a partnership they were going to do whether we were in the Premier League or not.

“It’s a multi-year, long-term deal commercially that already has built into it, when we get promoted, a different number. There’s not a penny of it that’s going anywhere other than back into the pitch.”

This money will also be vital in ensuing Leeds pass the EFL or Premier League’s profitability and sustainability rules (PSR). While Leeds are not at direct risk of failing PSR this season, the club will need to continue to spend in the coming seasons to secure promotion.

As Maguire says: “In terms of PSR, they’re actually in a reasonably strong position. If we take a look at their accounts for the last two years, they lost around about 70.4m in the past two years before special allowances, which is less than Everton, Leicester and Chelsea lost last season.

“The figures are okay. There’ll be a bit more of a squeeze because they’re now in the Championship, and you’re only allowed to lose 13 million pounds in a year.

“There’s probably a broader issue in terms of cash flow, in the sense that they did spend a lot of money in players the three years in the Premier League costs, £355m in terms of player purchases.”

This is all good news for Leeds’ future, not only ensuring financial security in the Championship, but aiding them with the same in the Premier League.

The Red Bull deal will be the largest in the second tier by some distance and will be a hugely desirable long-term commercial partner.

Why are Red Bull keen to partner with Leeds?

This deal is not only hugely beneficial for Leeds, but also a significant compliment.

“A good shirt sponsorship deal in the Championship is normally half a million pounds,” Maguire explains. “Looking at the three sides who’ve been relegated, Leeds are the biggest fish in the in the Football League pond.

“This is indicative of them being able to get a deal with a global name with the intention of returning to the Premier League as soon as possible. And then I think we’d see some significant step ups.

“It could also be argued that Leeds have got one eye on the future because we know that gambling advertising partners are going to cease in 2025-26. To find somebody new by partnering with Red Bull early gives a degree of certainty going forward.

“You’re not gonna get a deal with an organisation as big as Red Bull unless Red Bull are confident that you’re going to be at the top tier. It’s vote of confidence in in Paraag Marathe and the rest of the executive team at Elland Road. It allows the 49ers investments to get a chunk of their investment back if they are selling some of their shares to RB.”

And Marathe supported this idea, saying: “They could have pursued an investment in any club in English football, and they chose Leeds United.

“They chose to do a minority partnership — which will continue to be a minority partnership — because they recognised the global potential of Leeds and what this club could be.”

Could we see Red Bull Leeds in the future?

In short, no. Marathe has been very clear about this since the announcement, saying: “This club is and will forever be Leeds United Football Club. It’s not going to be the Leeds Red Bulls.

“To be fair, [Red Bull] understand that. They appreciate that. They respect that. They know the legacy of this club, so it’s not something they wanted either.”

The same goes for any potential naming rights deal with Elland Road: “Listen, anything with Elland Road is just not on my radar whatsoever. It’s not contemplated and it’s never been a part of this discussion.”

It’s also important to note that Red Bull do not have a seat on the Leeds board. Fan concerns that what has started as a minority investment could become a majority takeover, as was the case with current owners 49ers Group, were also quashed by Marathe.

“This is a minority partnership where they’re very happy to be investors in the club and see the club grow under my leadership,” he said. “That’s not going to change.”