In 2023, Red Bull sold one and a
half cans for every person on the planet. That’s more than 12 billion cans per year. But, as the avid Athletic Interest viewer knows, Red Bull does much more than
selling an energy drink. They own two Formula 1
teams, two Ice Hockey teams, sponsor thousands of athletes, and
let them compete in crazy events. They spend A LOT of money on marketing. Their
budgets can compete with the likes of Nike, Pepsi or McDonalds. But those are much
bigger companies. So relatively speaking, nobody spends more on marketing than Red Bull. But is all that really just marketing? If you dig a little deeper, you find
that at one point in their history, Red Bull changed their strategy.
And it was an unlikely change. Red Bull got big by focusing on extreme sports.
Jumping from space, driving fast cars, bikes, and whatever this is. The more extreme, the better
for Red Bull. Traditional sports? Too boring. Until the founder had a conversation
that would change the Red Bull brand forever. And led them to become one of
the most influential companies in the most popular sport in the world. And
one of the most controversial ones. Welcome to Athletic Interest and
why Red Bull owns a football club. In the summer of 1982, the Austrian businessman
Dietrich Mateschitz found himself suffering from jet lag during a business trip to Thailand.
He tried a local drink called Krating Daeng, which improved his jet lag substantially.
Krating Daeng can be translated to Red Gaur, a huge bison from Southeast Asia.
So it basically means Red Bull. Inspired by the magical qualities
of the product, Mateschitz decided to bring it home in the format of a brand
new product category – the energy drink. Potential investors told Mateschitz
that there was no market for the product. So he decided to create one.
Mateschitz adapted the formula and flavor for the European market and successfully
launched the product in Austria in 1987. Because the drink was initially banned
in Germany, Red Bull profited from the reputation as an outlaw brand. Many Young
Germans would cross the border to Austria to buy the banned drink, and Red Bull sold
over a million cans in their first year. From Austria, it quickly spread across Europe,
first to Slovakia and Hungary in '92 and then to Germany and the UK in ‘94. When they
entered the US market three years later, Red Bull was selling over
a million cans every day. The secret ingredient for this success has always
been Red Bull’s unique corporate structure. Red Bull itself doesn’t actually produce the drink -
production and filling of the cans is outsourced, so Red Bull can fully commit its
resources to selling the drink. And that’s something that Red Bull has mastered. Initially, the focus was on the club scene. Jaeger shots with Red Bull. Those weird
Mini cars outside of University. But clubbing is a relatively
small business. Red Bull wanted to go global. And Mateschitz understood
that Red Bull needed something bigger to grow the brand. As an avid sports fan
himself, he turned to sports marketing. But there was a problem. Red Bull didn’t
exactly fit in at Wimbledon or a golf tournament. An outlaw brand trying
to create an entirely new category of drink didn't mix with traditional sports.
So Red Bull decided to create its own sport. The Red Bull Dolomitenmann. An
extreme relay race with four unique physical tests: run, fly, bike, and kayak. It was the beginning of a
new strategy for Red Bull. If it couldn’t find a sport that aligned
with its values, it simply invented one. 92’ was the first year of the so called Flugtag, where people jump off high platforms
strapped to homemade flying machines. Or in 2000, when Red Bull launched the soapbox. A
race through city streets with homemade vehicles. Red Bull ripped up the sports marketing
playbook. It wasn’t even trying to convince you that it was good for you. Red Bull is
fun and exciting. So, those are the sports it aligned with. The brand had the YOLO
vibe before the acronym was even invented. But there was still one major sport that Red
Bull went into that was not niche - although also extreme: Formula 1. Austrian driver Gerhard
Berger became the first Red Bull athlete in 89’. In 95’ Red Bull started sponsoring the Sauber F1
team. In 2004 they purchased the Jaguar team. And Red Bull Racing has since become one of the
most successful Formula 1 teams in history. These sports all have one thing in
common: they look spectacular and create spectacular content. This content
is packaged and distributed by Red Bull's own in-house media team. While most brands have
to invest a lot in paid media to get any reach, Red Bull's channels are among the most popular
in sports with millions of organic views. This is another benefit of Red Bull's extreme
sports strategy. You cannot show highlights of Wimbledon or the FIFA World Cup on your
brand accounts. Because the broadcasting rights are usually sold exclusively and
for billions of dollars. But if you own the event and you've invented the sport anyway,
you can use the content however you like. That means that for a long time, a sport like
football didn't fit the Red Bull model. Too slow, too expensive, and too little adrenaline.
So Red Bull stayed out of it. Until one day, everything changed. And ironically, it
was Bayern Munich who changed their mind. Speaking of changing other people’s minds.
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exclusive 40% off their Vantage plan. It all went down in the cozy, little, town
of Salzburg, Austria right next to the Alps. This is where Dietrich Mateschitz met with his
good friend, football icon Franz Beckenbauer. A World Cup winner both as a player and a
coach, Beckenbauer left his mark on German football like no other. At the time of their
meeting, he was president of Bayern Munich. And in Salzburg, with its picture-perfect
views, Beckenbauer gave Mateschitz a game-changing piece of advice. If you really
want to make a splash in sports marketing, football is where your money should go.
Taking this to heart, Mateschitz didn't just step into the world of football; he dived
in headfirst. Red Bull started buying clubs. First, Mateschitz settled on the small
Austrian club of Austria Salzburg. He re-named the club Red Bull Salzburg. The
club now plays in the Red Bull Arena, its colours are red and white and its
club crest contains the Red Bull logo. Beckenbauer claimed that Mateschitz would
have given up without his support. And that the EUROs in 2008 only came to Austria,
because of Red Bull. He should've known, he was the one bringing the World
Cup to Germany two years before that. Bayern Munich even provided expertise and
players in the early days. Aging stars moved from Munich to Salzburg. Hansi
Flick even joined the coaching staff. At this point, nobody really took the
project too seriously. The press called the Salzburg club a Bavarian sausage
outlet. But this would change soon. A few years later, Beckenbauer told Mateschitz
to buy another club, but this time in Germany. From The Alps to Saxony SSV Markranstädt, a fifth tier club in
Leipzig. The club colours were changed to red and white. The stadium was renamed
the Red Bull Arena. Red Bull also tried to change the name to Red Bull Leipzig but was
blocked by the football authorities. So they went for RasenBallSport - which literally
means Grass Ball Sport - Leipzig instead. These changes were controversial. Leipzig locals even formed their own protest team to
preserve the old vision of the club. Red Bull took things a step further
when RB Leipzig joined the Bundesliga just seven years later. The 50 Plus one
rule requires members of Bundesliga clubs to hold 50 percent, plus one more
vote, of the club’s voting rights. It's important to understand that this is deeply
rooted in German society. When you want to do any kind of sport in Germany, you become a member
of a sports club. Whether you want to do it just for fun, or on a professional level. Sports
are organized in clubs. Also in the Bundesliga. That means that the members of the clubs have a
say and can vote on the most important decisions. But Red Bull wanted to retain full control over
their club. So, Red Bull priced membership at one thousand euros per year. Compared to 60
EUR at Bayern Munich. Red Bull also retained the right to block any potential member. So they
started with only 7 members, all of them being employees or lawyers associated with Red Bull.
This number has grown to 23 today, but that's still nothing compared to the more than 300.000
members that Bayern officials need to report to. So this is one thing that Red Bull is doing
differently than Bayern. But they still have a special relationship, even after both
Mateschitz and Beckenbauer passed away. And the time of the Bavarian sausage
outlet is over. More and more often, the clubs meet as equals.
Bayern is no longer sending their aged players to Salzburg, but buying the
best talents from Leipzig. Upamecano, Sabitzer, Laimer. Even Julian Nagelsmann as coach
and later Max Eberl as sporting director. Bayern has created its own strongest competitor.
Leipzig has become one of Germany's best teams. Playing in the Champions League almost
every season and winning the Cup twice. And yet, many fans in Germany hate the club
because of its strong ties to Red Bull. When Leipzig plays Eintracht Frankfurt,
Eintracht refuses to show Leipzig’s logo anywhere in its stadium. When Leipzig first
traveled to Union Berlin, the page in Berlin’s programme usually dedicated to the visiting club
was replaced with information about Bull breeding. Many fans would probably be even more upset
if they knew that the club they hate the most only exists because of the club they
hate the second most: Bayern Munich. But besides the fierce competition,
behind the scenes, there are close ties. Like Beckenbauer, Uli Hoeneß had a
close relationship with Mateschitz as well. His nephew Sebastian Hoeneß, the current coach of VfB Stuttgart Sebastian Hoeneß,
worked in Leipzig's youth academy. Outside of football, the competitors are
even cooperating. Red Bull is currently building a multifunctional arena in Munich's
Olympiapark, which will not only be home to its own ice hockey club Red Bull Munich, but
also to Bayern Munich's basketball team. The first plans for this were made around ten
years ago. But they only became concrete after Hoeneß served his sentence for tax evasion in
prison. When he came back from prison, one of the first letters he received was from Mateschitz,
welcoming him back and offering to work together anytime. Hoeneß was deeply moved by the gesture
and knew "that this was the right partner". It is likely that in the future, Red Bull will
more often be the enemy than a partner. Because they have one thing that Bayern doesn't have.
And again, Beckenbauer was involved. Because besides Salzburg and Leipzig, Beckenbauer told
Mateschitz to buy another club when Mateschitz wanted to go west. And for Beckenbauer it
was clear, that if you have the chance to buy a team in the United States, there's only
one destination: New York. He had played there himself and still knew what was going on in the
city - so he decided to help Mateschitz out again. Mateschitz bought the MLS franchise for 100m
dollars. The price included buying half of the stadium in New Jersey and its naming rights: Red
Bull Park. Even Henry played there for a while. Now let's take a step back and
look at this with perspective. Mateschitz and his friend Beckenbauer put Red
Bull on the football map. Having teams in Austria, Germany and the United States. But Red Bull didn't
stop there and also expanded to Brazil and Ghana. Today, RB Leipzig is at the center of a web of Red
Bull-owned clubs. Red Bull uses this network to develop talent. A player can start out in Brazil,
move to Salzburg to develop his talent and then play in the Champions League with Leipzig. When
retirement is close, he can head off to New York. While Red Bull is not the first to develop
this strategy, it was the first to see results. Red Bull’s secret ingredient was the
close synergy between these clubs. The HR, Finance and Marketing for every club is
run by one central board. They have all adopted the same playing style. They
share the same coaches and methods. The clubs even have the same colours
and all play in the Red Bull arena. The idea is that a player or coach
can be dropped in any club within the network and instantly feel at home.
This cuts down development time. The quicker and stronger a player develops, the faster they are able to strengthen the RB
Leipzig squad, or get sold on for a profit. Dominik Szoboszlai moved through
the Red Bull system and helped RB Leipzig to two Cup victories. He was then
sold to Liverpool for 70 million euros. The multi-club ownership model is so successful,
more and more teams are trying to copy it. 180 clubs are now involved in multi-club
networks. 5 times more than 10 years ago. This includes 6,500 players who
are employed by multi-club teams. Hundreds are traded within these
networks every transfer window. But not everyone loves it. Owning more than one team can create
conflicts of interest. In the Red Bull Group, Leipzig is the top of the pyramid. It will
get the best players, the biggest investment, and the greater attention. While at a national
level, Salzburg and Bragantino are top sides, within the Red Bull group they
will always support Leipzig. The transfer of players is also controversial.
Clubs can artificially inflate or deflate the value of players to boost the
finances of a particular club. That's why UEFA and FIFA have been asked to
regulate multi-club models. But in reality, do they really want to discourage this
new form of investment into football? Only recently, UEFA made it easier
for clubs within the same network to play each other. So like it or not,
multi-club ownership is here to stay. The Red Bull Football model is controversial. Some fans in Germany refer to Leipzig’s
supporters as customers. It's supposed to be an insult, but Red Bull
probably doesn’t mind too much. Because this is exactly why Red
Bull purchased a football club. The strategy is simple. Win
on Sunday, sell on Monday. Red Bull already knows this works from Formula 1. Whenever Max Verstappen wins a race,
Red Bull sells more cans the next day. Now imagine the same in the biggest sport in the
world. That's why it makes sense for Red Bull to use some of the money they make with their
drink to cross-finance their football clubs, even if those don't make a
profit on their own soon. With the rise of RB Leipzig, Red Bull
will probably sell even more cans in the future. And even without selling more
cans, it's likely to pay off. Because what started as a marketing machine has
turned into a business of its own. Red Bull Racing was started with an initial
400 million dollar investment. Today, the team is self-sustaining, profitable
and worth 2.6 billion dollars. RB Leipzig earns around 3 million
euros per match through ticket sales, and more than 70 million euros per year
through broadcasting. Leipzig has also earned millions on the transfer market
through buying low and selling high. And you remember the 100 million they paid for the New York Red Bulls? The club is
now worth more than half a billion. Few brands have mastered the combination of sports
and content marketing the way that Red Bull has. Red Bull has invented a new category of
drink. It then invented several new sports to market the product. The multi-club
model is the next evolution. Creating a machine that can take the Red Bull name to
the top of the biggest sport on the planet. And that is why Red Bull owns a football club.
