Why Red Bull Owns a Football Club

Introduction

• In 2023, Red Bull sold more than 12 billion cans per year, 1.5 cans per person on the planet.
• Red Bull is heavily involved in sports: owns two Formula One teams, ice hockey teams, and sponsors athletes in extreme events.
• Red Bull's marketing budgets are comparable to large corporations like Nike and Pepsi.

Early History

• Dietrich Mateschitz, an Austrian businessman, discovered a drink called Krating Deng in Thailand to cure his jet lag.
• Inspired, Mateschitz adapted the drink for the European market and launched Red Bull in Austria in 1987.
• Despite initial skepticism, Red Bull succeeded and sold over a million cans in their first year.
• Red Bull penetrated markets across Europe and entered the US market in 1997.

Marketing Strategy

• Red Bull outsources production to focus entirely on marketing.
• Initially targeted clubs and nightlife but aspired to grow globally.
• Moved into sports marketing, choosing extreme sports to reflect the brand's adventurous image.
• Created events like Red Bull Dolomitenmann and Flugtag to align with their brand.
• Entered Formula One by sponsoring drivers and buying teams, becoming highly successful.

Media and Content Strategy

• Red Bull owns its in-house media team, creating and distributing popular sports content.
• Control over event content allows Red Bull to avoid costly broadcasting fees.

Entry into Football

• Influenced by Franz Beckenbauer, Mateschitz decided to enter football, starting with Austrian club Austria-Salzburg, renaming it Red Bull Salzburg.
• Moved to Germany, bought SSV Markranstedt, and renamed it RB Leipzig.
• Implemented high membership fees to retain control over RB Leipzig.
• Close connections with Bayern Munich, swapping experienced players and expertise.

Expansion and Multi-Club Model

• Expanded to other regions including the USA, Brazil, and Ghana.
• Developed a synergy among its clubs, sharing resources, playing styles, and colors.
• Centralized HR, marketing, and finance for efficiency.
• Focused on fast player development and profitable player sales.

Controversies and Criticisms

• Critics argue that the multi-club model may create conflicts of interest and unfair advantages.
• Some German fans are opposition to commercialized approach, calling Leipzig fans "customers."

Financial Viability

• Red Bull Racing and RB Leipzig are profitable and growing in value.
• Business success validates the investment in sports marketing.

Conclusion

• Red Bull transformed from a brand into a multi-club sports empire, combining sports and content marketing innovatively.
• The brand’s aggressive diversification strategy has shown remarkable success and profitability.