By Sanal Mulackal
Red Bull. What are they? Some might say world renowned energy drink, whilst others would affiliate them with ‘extreme sports’ and formula one racing. However, the football lovers amongst us would argue that they are a footballing conglomerate, with a strong web of clubs dotted around the world.
Over the past fifteen years, Red Bull has been making ripples within the football industry by ruthlessly acquiring, developing and launching teams to great heights.
The Start of an Era
In 2005, Austria Salzburg were flirting with bankruptcy and in dire need of financial support. In steps Dietrich Mateschitz, the Austrian billionaire more prominently known as the joint founding father of Red Bull who was also a visionary, as he identified untapped potential within the club. Dietrich acquired the club, changing the name to FC Red Bull Salzburg, as well as the club colours, causing carnage amongst the loyal fanbase, leading to protests and the ‘Violet-white’ fan group forming a new club, Austria Salzburg.
Regardless, Deitrich and his team pressed ahead with their vision and fast forward to the ‘06-‘07 season, FC Red Bull Salzburg conquered the Tipico Bundesliga with legendary Italian manager Giovanni Trapattoni at the helm, and the worries of yesteryear were soon forgotten. Their footballing prowess grew even further through the acquisition of FC Liefering, who became the feeder club for FC Red Bull Salzburg, and they played a contributing factor in the latter’s UEFA Youth League success in 2016 – 2017.
Dietrich was far from finished and made strides to expand his footballing empire, by acquiring New York Red Bulls (formerly New York MetroStars) in March 2006 and establishing Red Bull Brasil in November 2007. Then came the formation of Red Bull Ghana in 2008 (later abolished, in 2014), followed by the acquisition of RB Leipzig (formerly SSV Markranstädt), in March 2009.
Within the space of four years, the Red Bull kingdom had grown to establish a presence spanning four continents, with two more clubs being added to the portfolio in the decade that followed. Both New York Red Bulls II (founded in January 2015) and Red Bull Bragantino (acquired in April 2019) were strategical ploys as they act as a feeder and parent club, to further strengthen Red Bull’s presence in the USA and Brazil, respectively.
Over the last three decades, inflation within the footballing economy has increased by 168%. To put that into perspective, Manchester United are willing to pay £100 million for Jadon Sancho this summer, which equates to £39.2 million in 1989. That was the same year that Michael Knighton came agonisingly close to purchasing Manchester United for £20m. One Jadon Sancho could have bought you one Manchester United three decades ago. Crazy!
Therefore, clubs with less financial prowess have had to be smarter with their investments, focusing on high value players that offer high resale fees. But what if you have a global network of players, coaches and managers orchestrated by an overarching corporation? The simple answer is, monetary success, and this is exactly what Red Bull have achieved in the footballing world, throughout their relatively short existence.
Red Bull have the luxury option of moving their players around the globe with less hassle, as they are essentially keeping most of the transfer fees and negotiations in-house. This was the case with Naiby Keita who plied his trade at Red Bull Salzburg before joining sister club RB Leipzig for £26 million. RB Leipzig then doubled the fee they paid within two years, by selling Keita to Liverpool for a mammoth £52 million. Excellent business all round.
More recent notable transfers fetching vast sums of transfer fees include Erling Håland, who moved from Red Bull Salzburg to Borussia Dortmund for £64.8 million and Timo Werner who moved from RB Leipzig to Chelsea F.C. for £53 million. Buy cheap talented young players, boost the players value, occasionally sell between the Red Bull clubs so the player can gain more exposure and eventually sell them for a gigantic fee. Next on the list is Dayot Upamecano, currently at RP Leipzig and is a certainty to be the next big cash generator, given his young age and phenomenal potential. The Red Bull model is non-stop and relentless.
Figure One presents a career model that Red Bull could offer promising young players. A player could potentially start their career in Brazil, before moving to the smaller European league in Austria (FC Red Bull Salzburg) and eventually join RB Leipzig in Germany when he is ready to play in the champions league. In the twilight years of his career, the player could then seek a transfer to New York Red Bulls.
This goes to show that the Red Bull ecosystem is both efficient and expansive, and the larger it grows, the more potential it has.
The cash cow that is the Red Bull energy drink has allowed Red Bull to grow their interests, not least by adding seven football clubs to their portfolio. Each club an important role in the Red Bull ecosystem and generates vast sums of money. However, it is important to consider the purists within the beautiful game that would argue that Red Bull are destroying the sport by commercializing it too much. Whilst there is significant weight to this point, it is important to appreciate that they are an excellently run and efficient multi-club behemoth.
These are exciting times for Red Bull as they still have several markets to exploit, most notably Asia and Australasia. This will propel them away from their nearest rivals, The City Football Group, to become the largest and undisputed multi-club owners.
Red Bull. More than just an energy drink.