Red Bull: Why they bought sports teams — and the impact on them — The Athletic 7/6/24
By Nancy Froston
When Leeds United fans heard the news that Red Bull had
bought a stake in the club, some were nervous, others were openly hostile
towards the world’s third-most valuable soft drinks company.
They have their reasons, with the most obvious being part of
the deal that makes Red Bull a front-of-shirt sponsor next season. Red is not a
popular colour in any quarter of Leeds given its association with rivals
Manchester United.
There are deeper concerns, though, which have led to the
Leeds United Supporters’ Trust seeking assurances from the club that core parts
of their identity will not be changed with the arrival of the new investors.
The club has been clear in its stance, with United chairman Paraag Marathe
telling The Athletic that “this club is and will forever be Leeds United
Football Club. It’s not going to be the Leeds Red Bulls”.
“Any fundamental changes to Leeds United club’s identity and
heritage will receive maximum resistance from our fans, and we will be working
closely with football authorities in preparation for any such move by Red
Bull,” read a statement from the trust.
“While the club have been open and proactive in stating that
no one from Red Bull will sit on the board and there will be no change to the
name or logo, this is only a promise while the 49ers maintain complete control
of the club.
“Nobody can predict what will happen after the 49ers’
custodianship, so we are taking the opportunity at an early stage to let Red
Bull, or any other potential custodians of our club, know that we will not
allow any of these fundamental heritage or identity changes to happen to our
club.”
Leeds fans’ concerns are not unfounded. Red Bull has a
reputation in football which, particularly in Europe, has not always made them
popular. The energy drink brand, founded in 1984 by Dietrich Mateschitz and
Chaleo Yoovidhya, owns a stable of clubs including New York Red Bulls in MLS,
Red Bull Bragantino in Brazil’s Serie A, Red Bull Salzburg in Austria and RB
Leipzig in the German Bundesliga.
In each case, the club’s associations with the company are
stamped across every aspect of their identity: in their name, their kit and
their shirt sponsors. It also has naming rights to the home grounds of three of
its four clubs, all called Red Bull Arena. (It does not do things by half.)
“They want to sell products but they don’t just see the
opportunity in that,” says Misha Sher, European Sponsorship Association board
member and global head of sport and entertainment at EssenceMediacom. “They
have football teams all over the world and there is brand consistency across
those teams in strategically important continents. And because they own their
teams, they make huge money on player trading by unearthing players, giving
them exposure and then selling them on.
“By owning the club, they have also increased the value of
their asset because the industry has grown. In the United States, they bought
the New York franchise for $30million (£15million at the time) in 2006 and now
that team will be valued at hundreds of millions. Not only is this about having
teams playing in their kit in their stadium, but it’s also an appreciating
asset all the time.
“Some of the best companies in the world never talk about
their products. Nike don’t talk about their trainers; they sell an aspiration
and how you feel when you wear their gear. Apple is all about the feeling of
owning a Mac. It’s about creating a sense of community.
“For Red Bull, they’ve come a long way from the little cars
that used to drive around with the can on the back. They’re marketing what it
means to be brave, to go for things because it ‘Gives You Wings’.”
From motorcycle racing to Formula 1 to BMX and snowboarding,
Red Bull began marketing its drinks via sponsorships and events across a range
of extreme sports from 1992 onwards. Starting in motorsport as an investor, Red
Bull bought the Jaguar Formula 1 team in 2004. Fans of Netflix’s Drive to
Survive series will know of Red Bull’s successes, which were built on the idea
of being ‘disruptors’ and trying to do things differently. Although Red Bull
Racing has spent big, Max Verstappen (top picture, right) and its other drivers
have helped reap huge rewards, with six constructors’ championships and seven
drivers’ titles.
It has not all been plain sailing, especially in the
popularity stakes among rivals after expanding to ownership of a second team in
2005, but politics on the grid cannot take away from their victories. Aside
from silverware, F1 has also returned to an Austrian venue called — yes, you
guessed it — the Red Bull Ring in Spielberg. Perhaps their most important move
was recruiting Adrian Newey, F1’s greatest designer, in 2006 from McLaren to
kick start their period of dominance. Parallels can be drawn from their
football operation: successful and masterminded by leading thinkers.
Red Bull started its footballing enterprise when it bought
Austria Salzburg in 2005. “The big problem was that there was a traditional
club with a fanbase and their own colour,” says Alexander Huber of the Austrian
newspaper Kurier Sport. “It was violet, purple. Red Bull came and, at first,
everybody thought it would be a good match. After a short time, it became clear
that they were going to change everything — the name, the colour — and the fans
had a massive problem with that.
“There was a real cut and all the classic fans said goodbye
because they did not feel it was their club any more, so they started a new
Austria Salzburg with their club in the eighth tier, the lowest league we have
in Austria.
“Red Bull Salzburg was really hated by ultras all over the
country. Normal football fans have no aggression any more, they respect what
Red Bull has done, especially since Ralf Rangnick came to the club. Between
2006 and 2012, it was like a reality show, everyone thought it was a very
expensive hobby for (co-founder) Mateschitz. Nobody was proud of it. Then, with
Rangnick, it changed and now the only part of Austrian football who are really
strict opponents to them are the ultras.”
Since 2005, Austria Salzburg have climbed to the third tier
but still lack a home ground, which has limited further progress. They attract
a demographic of fans in the city who prefer the ultra culture, which is not
encouraged at Red Bull Salzburg, who have established themselves as a force in
Europe and domestically. Between 2014 and 2023, they won 10 consecutive league
titles and reached the semi-final of the Europa League in 2018.
After early years of spending big and falling short with
Salzburg, the appointment of Rangnick as director of football in 2012 marked
the start of the Red Bull identity in football. That style extends to its
subsequent acquisitions of RB Leipzig (who Rangnick later managed) — with ‘RB’
standing for ‘RasenBall’ (lawn ball sports) to circumvent German rules on
corporate naming of football clubs — and New York Red Bulls, with staff and
players often moving between the clubs.
Former Leeds head coach Jesse Marsch worked at three Red
Bull clubs before his spell at Elland Road, and ex-Leeds midfielder Tyler Adams
went from New York to Leipzig. Midfielder Marcel Sabitzer and defender Dayot
Upamecano had stints in Salzburg and Leipzig, a path also trodden by Benjamin
Sesko (top picture, left).
RB Leipzig, who declined to comment, and Red Bull Salzburg,
who did not respond to a request for comment, have central themes to their
identity, brought in under Rangnick: a focus on the academy system, a rejection
of big-money signings and playing intense, high-pressing football. At Leipzig,
season ticket pricing remains low and across the group, clubs are incredibly
well-run.
That will do little to shake off the identikit feel,
however, which is most strongly opposed in Germany, where the ’50+1′ rule of
club ownership is sacred. In principle, 50+1 dictates that a club’s members
should hold a majority share of voting rights with a few exceptions. All of
Leipzig’s vote-holding members are employees or associates of Red Bull. The
club has only existed since 2009 when Red Bull acquired the licence of
fifth-tier club SSV Markranstadt before giving them the branding treatment. Their
fast progress up the leagues saw them leave behind two local clubs, Lokomotive
Leipzig and Chemie Leipzig.
Suspicion of commercialism in German football runs deep and
so Leipzig are a version of the future that fans do not want: one in which
companies rather than supporters run clubs and the game serves a marketing
purpose. Fan protests at Bundesliga games, in some cases where Leipzig are not
even playing, are common. Borussia Dortmund fans have boycotted trips to the
Red Bull Arena, some Bundesliga clubs refuse to show Leipzig’s logo and Dynamo
Dresden fans threw severed bull heads onto the pitch during one game. There is
even resistance from within Leipzig’s own fans, with the Rasenballisten group
declaring its support of the team but not Red Bull.
Rebranding any trademark aspect of historic clubs is always
felt deeply in European football. Where franchises in U.S. sports often change
name or location and F1 teams are bought and change colour, name and sponsor
regularly, the same rarely happens in football. So Red Bull’s involvement, as
successful as it is, is always likely to be met with cynicism. As a marketing
tool, however, it works.
“They are probably the most innovative (brand),” says Sher.
“They have always done things in a way that most other brands don’t have the
bravery to do. Red Bull has been like that from the start, what has been most
consistent with them is that it has always been about owning the narrative.
“Every other brand sponsors something because they are
trying to benefit from the equity of that relationship. That’s not the business
that Red Bull are in. Owning their own team and events gives them the freedom
to execute things how they want. When you pay someone else you’re one of many
partners and you have to do things their way.
“They want people to buy their products but they are
capitalising on every way in which the industry is growing. It can be media
rights, franchise value, the supply chain of players through their system. They
don’t have to rely on other people.”
“In Formula 1, team name changes are just an accepted part
of things — it has become a fantastic sponsorship vehicle but it’s not common
in football,” says Nigel Currie, a sports marketing consultant.
“Red Bull have been so successful in their sponsorship
programmes across so many sports and countries that they have probably become
experts in a lot of areas they didn’t expect. They will have found a lot of
overlap in ways that they can combine expertise between groups and sports to
bring benefits and that’s what they’ll be offering to a club like Leeds.
“They’re a huge global brand and Leeds have the potential to
be that. The potential is there for them to get to the Premier League and
become a massive global brand.”
Across multiple clubs and sports, the way Red Bull has done
things has varied little over the years. Once it is in, it is all in and its
presence is clear, loud and unavoidable — but successful.
This is where taking a minority stake in Leeds bucks the
trend. Ten years ago, Red Bull denied it was interested in investing in the
club when they were owned by Massimo Cellino and rumours have regularly
resurfaced linking the two. Under 49ers Enterprises, it has finally become a
reality. Leeds have not been the only Red Bull investment this year, with the
company becoming named as the sponsor and majority owner of the operating
company that runs the BORA-Hansgrohe German road cycling team.
“Normally, Red Bull doesn’t like to negotiate,” says Huber.
“They like to do it their way or they don’t negotiate. So Leeds could be a new
type of partnership. In sports, we know that when Red Bull starts something, it
will be very professional and they won’t care if it’s €1million, €10million or
more as an investment — they will only start when it’s perfect. Normally they
don’t quit. They only do things for a very long time.”
Red Bull is in a new era following the death of Mateschitz
in October 2022 and the subsequent inheriting of the company by his son, Mark.
The question is whether Leeds marks a change in strategy or a path to a real
presence in English football.