2024-10-19 14:28:00
Extremes, intrigue and controversy: why Red Bull’s sports empire is growing
First the change of coach Jürgen Klopp, now the impending purchase of Paris FC: The energy drink manufacturer is expanding its sports investments. An overview in 6 chapters.
Extreme athlete Nicolas Beaudoin flies over the track during a snowmobile race in Canada.
Photo: Dan Mathieu (Red Bull Content Pool)
- Red Bull is conducting “exclusive negotiations” to take over Paris FC.
- The beverage manufacturer is prominently represented in various sports.
- The sporting success is most visible in Formula 1 with Red Bull Racing.
- Football fans criticize Red Bull’s commercial approach.
This news is causing a stir in the football world: Together with the French multi-billionaire Bernard Arnault, Red Bull wants to take over the second division club Paris FC. “Exclusive negotiations” are taking place, as was announced on Thursday.
This stimulates the imagination of football fans in France and Europe: Will the first division club Paris Saint-Germain, controlled by the Qatari sovereign wealth fund, soon have a rival that is majority in European hands?
Red Bull is not only known as an energy drink manufacturer, but has also built a veritable sports empire over the past few decades. What once began as a marketing tool has grown into an empire of successful teams and events ranging from football to motorsports to extreme sports.
What is behind this strategy? What are the stumbling blocks? And what role does it play? the former German coach Jürgen Kloppwho will be given a new role as Red Bull’s top football official?
An overview in 6 chapters:
The beginnings
Red Bull co-founder Dietrich Mateschitz died in 2022 at the age of 78.
Foto: Red Bull Content Pool
The history of Red Bull begins in 1984 when it was founded by Austrian entrepreneur Dietrich Mateschitz and Thai pharmacist Chaleo Yoovidhya. Both have since died.
But it was the innovative approach to marketing that quickly made the company based in Fuschl am See a global brand. Instead of using traditional advertising, the company focused on Extreme sports and spectacular eventsto promote its product as a fast-paced and powerful brand.
This includes, for example, the jump from Felix Baumgartner from the stratospherein which he jumped from a height of almost 39,000 meters in 2012 and became the first person to break the sound barrier in free fall. The goal: to cause a stir and increase brand awareness worldwide.
The concept is working: in the past financial year, the Austrian company generated sales of 10.5 billion euros and sold 12.1 billion cans worldwide. Red Bull reported the 2023 marketing budget as 2.5 billion euros in its annual report.
But courting athletes who are willing to take risks soon reveals its downsides: Several extreme athletes have had fatal accidents during events organized by Red Bull.
One of them is the Swiss base jumper Ueli Gegenschatz: On November 11, 2009, during a promotional appearance for Red Bull, he jumped from the 88-meter-high Sunrise Tower in Zurich, crashed into an edge of the tower’s 25-meter-high base and then hit the ground.
The Appenzeller died of his injuries two days later in Zurich University Hospital; he was 38 years old.
Getting started in football
Goal for Red Bull Leipzig: Goalscorer Benjamin Sesko (with number 30) celebrates with teammate Xavi Simons in the Champions League game against Juventus on October 2, 2024.
Photo: Ronny Hartmann (AFP)
While extreme sports became Red Bull’s trademark, the company began getting involved in football in the mid-2000s. With this step, advertising was no longer intended to only appeal to extroverted and risk-taking consumers who identified with extreme athletes. Red Bull went to the masses with the most popular popular sport in the world, football.
There is another point that goes beyond selling cans. As sports marketing expert Misha Sher tells the sports media “The Athletic”.Red Bull increases its own company value through the investments, because the sports industry is growing rapidly. Red Bull bought the New York branch for $30 million – and now the value of the team, now the New York Red Bulls, is estimated at hundreds of millions. “It’s not just about the teams playing in their stadium in their jerseys, but also about the fact that their facility is constantly increasing in value,” said Sher.
The commitment began in 2005. At that time, the company took over the Austrian football club SV Austria Salzburg and transformed it into today’s Red Bull Salzburg.
The traditional club color violet was replaced by the colors red and white. This caused controversy not only in his hometown of Salzburg, but also in the European football world. Die-hard fans suspect that the sport is selling out.
The success proved Red Bull right: Salzburg dominated the Austrian league and established itself as a regular participant in European competitions.
Perhaps the most significant football project, however, is the German club RB Leipzig, which the company took over in 2009. Originally a club in the fifth division, RB Leipzig rose to the Bundesliga in just a few years and reached the semi-finals of the Champions League in 2020.
Despite massive criticism of the club’s commercialization – many fans of other clubs reject Leipzig – the sporting results are there. Red Bull’s strategy of focusing on football that is attractive to spectators has increased the brand’s visibility.
In addition to Salzburg and Leipzig, the beverage manufacturer also owns the New York Red Bulls in the USA, Red Bull Bragantino in Brazil and Omiya Ardija, a Japanese third division team.
All teams share a similar philosophy: an aggressive and pressure-oriented style of play.
Jürgen Klopp is coming
Jürgen Klopp will work for Red Bull from 2025.
Photo: Lea Wohlfahrt (Red Bull Content Pool)
The long-time coach of Liverpool FC will take over from 2025 new function at Red Bull. As “Global Head of Soccer,” the now 57-year-old will advise and strategically direct the company’s soccer clubs worldwide.
Klopp will take care of training issues, develop talent and coaches and determine the clubs’ playing direction.
If the takeover of Paris FC comes about, the expectations of the top football official, Klopp, will increase: he would have to quickly bring the club into Ligue 1 and make them champions there.
Formula 1 and extreme sports
Reigning world champion Max Verstappen leaves the pit lane in his Red Bull at the Singapore Grand Prix.
Photo: Mohd Rasfan (AP)
Football is only part of Red Bull’s power factor. Perhaps the company’s most visible success lies in motorsport, especially Formula 1. It reaches an audience of billions worldwide via television broadcasts.
The Red Bull Racing Team, which was founded in 2005, has since shaped the premier class of motorsport. With drivers like Sebastian Vettel and reigning champion Max Verstappen, Red Bull won several world championships.
The company also owns another racing team in Formula 1, Racing Bulls. It is considered a junior team for Red Bull Racing.
In addition to Formula 1, Red Bull is present in other motorsports such as MotoGP, where it supports teams such as KTM Factory Racing.
Additionally, Red Bull is known for supporting numerous athletes in disciplines such as snowboarding, motocross and base jumping.
The group acts as a name sponsor for the ice hockey clubs EC Salzburg and EHC Munich. He doesn’t own the clubs.
The power struggle
Christian Horner has been team boss of the Formula 1 racing team Red Bull Racing since 2005.
Photo: Daniel Dal Zennaro (EPA)
The success of Red Bull Racing is closely linked to the British team boss Christian Horner, who made the racing team one of the strongest competitors in the Formula 1 circus. On the person of Horner A conflict arose in the current season that points to a power struggle at the beverage manufacturer.
At the beginning of February 2024, reports emerged that according to which Horner behaved improperly towards an employee. The employee reported these incidents internally, and the parent company conducted an investigation and formally cleared the team boss on February 28.
Just a day later, suggestive texts and photos that were allegedly exchanged between Horner and his accuser were leaked onto the Internet.
As was leaked, the Austrian side of the group and the Dutch entourage of world champion Max Verstappen are said to have worked on Horner’s dismissal. Apparently, however, the Thai wing around the Yoovidhya family prevailed, sticking with the influential team boss Horner from the start.
The ownership structure at Red Bull plays an important role: the Mateschitz family holds a 49 percent stake. Chaleo Yoovidhya’s descendants also hold 49 percent.
Multi-billionaire Chalerm Yoovidhya, the son of co-founder Chaleo Yoovidhya, is tipping the scales. He owns the remaining 2 percent and can ensure majorities. In the Horner case he showed where his loyalties lie.
The future
Red Bull is interested in the French second division club Paris FC.
Foto: Thibault Camus (AP)
With Jürgen Klopp at the helm of the football network, Red Bull will expand its influence in the world’s most popular sport.
The acquisition of a minority stake in the English club Leeds United in spring 2024 and the negotiations at Paris FC show that Red Bull is not only investing in traditional English football, but is also interested in other European leagues.
This should open up new perspectives for the future and increase the value of the Red Bull clubs.
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