Red Bullies? Why Red Bull’s Ownership Model has Caused a Stir in German Football:

NOTE: This blog was originally submitted here: http://www.synergy-sponsorship.com/blog/20140929/red-bullies-why-red-bulls-ownership-model-has-caused-a-stir-in-german-football/

RasenBallsport Leipzig may translate to ‘lawn ball sport’, but once you factor in their club crest (shown below), stadium (Red Bull Arena), and owners (Red Bull GmbH), it is quickly apparent that they are not your average lower league football team.

The club, owned and run by the Austrian-based energy drink company, is the fifth club to join the Red Bull stable of professional football clubs, and has caused a stir within German football since transforming the fifth division team SSV Markranstadt in 2009. After purchasing the licence and re-naming the club (which is abbreviated to RB Leipzig), the club colours were changed and the team moved to a new purpose-built stadium, with the goal of reaching the Bundesliga by 2016.

Opposition fans and teams have been quick to voice their displeasure, with 15 minutes of silence from 20,000 Union Berlin fans the most recent example. The reason for this is the apparent threat to the current, strict 50+1 structure of club ownership in Germany, whereby clubs are owned by members. At Bayern Munich, for example, adidas (€75m), Allianz (€110m) and Audi (€90m) all have 8.33% stakes, but the 75% majority is controlled by the members. Having progressed through the divisions so quickly, RB Leipzig have been criticised for making club membership expensive and hard to obtain. This is supported by the fact that the club currently only has 300 members, compared to approximately 250,000 members at Bayern Munich.

Multinational franchises aren’t the exclusive domain of Red Bull though, with City Football Group taking controlling ownership of New York City FC and Melbourne City – formerly New York Metrostars and Melbourne Heart respectively – and a minority stake in Yokohama F Marinos. Many feel that being able to own more than one club is anti-competitive to other teams with fewer resources, and that it also restricts the opportunities for home-grown players. UEFA legislation stipulates that clubs with the same owner cannot participate in the same competition, a distinct possibility in the near future, were RB Leipzig and Red Bull Salzburg to both qualify for the Europa or Champions League.

Of course, Red Bull is now a familiar name within the world of sport, owning two F1 teams, ice hockey teams, and a wide portfolio of both extreme sports and more mainstream athlete ambassadors. Within the space of 10 years, Red Bull F1 has won the Constructors’ Championship four times, yet there has been comparatively little backlash against the company. Red Bull’s creation of extreme events such as the Air Race, Cliff Diving and Flugtag series has also captured the imagination of many, and has widely been praised, so why the backlash in German football?

Historically, club ownership has been tied to the local area, and it is this nuance that allows a couple of Bundesliga teams to be owned by multinational corporations. VfL Wolfsburg and Bayer Leverkusen are owned by Volkswagen & Bayer AG respectively, but this is permitted by the Bundesliga, as the clubs were formed from company factory staff. TSG 1899 Hoffenheim are the other club that RB Leipzig highlight in defence of their model, pointing out the role that major investment has played, and a growing acceptance of the club in recent years.

Certainly, Red Bull have a way go to quell the backlash from the majority of the football-supporting German public, but advocates would argue that the success of the model makes the league more competitive. Bayern Munich and Borussia Dortmund have won 16 of the previous 20 Bundesliga titles, and a new ‘challenger’ within the Bundesliga may actually be a benefit to German football, in the same way many feel – with justification – that Red Bull has enhanced Formula One.

It would be interesting to see how the English public would react should Red Bull turn their attentions to these shores, as rumoured in 2013. A Red Bull-owned Premier League team would undoubtedly bring worldwide recognition, prestige and controversy; something that Red Bull do not tend to shy away from, but I suspect that prohibitive costs and regulation may prevent investment. Given the UEFA legislation and relative cost for English football teams, I would imagine growth markets of Latin America or Australia are more likely sites for a sixth member of the Red Bull football family.