In 1953, the Anheuser- Busch family wanted to buy the naming rights for Sportsman’s Park, home of the St. Louis Cardinals, and rename it ‘Budweiser Stadium’.
At the time, the National League refused, rejecting the thought of having a sports ground named after alcohol; but he allowed them to use their surname on the stadium instead. In 1954, the Cardinals opened the Busch Stadium- and soon after, Anhesuer-Busch rolled out a new beer “Busch Bavarian Beer” to take advantage of the advertisement.
At the time, this seemed like a dastardly cunning plan, getting around the fiendishly tight rule which did not allow such marketing. Nowadays however, sports have become some of the most lucrative businesses in the world, so when a new corporate business comes onto the sports scene, you hardly bat an eyelid, it’s nothing new. The days where you could recall the name of any football ground around the world are dead and gone, and now mixed in a concoction of car companies, beers and banks. Manchester United recently topped the Deloitte ‘rich list’ boasting a net income of £515.3 million, knocking Real Madrid off their reign which lasted 11 years.
According to Deloitte, the lucrative sponsorship deals range from their record shirt deal with Adidas which is worth £500 million over five years- to having deals with paint companies in Manchester. They have their foot in everything- which allows them to sign players like Paul Pogba for £89 million- so it is very much a two way deal. It’s no surprise that companies want their brand associated with United when they boast a fan-base that is only matched by Real Madrid.
Yet, for every deal with Chevrolet, Adidas, and Tag Heuer- the Manchester club have not sold the naming rights to the stadium. This is because the name “Old Trafford” is not associated with the cricket team that play just across the road from Matt Busby Way. It is “The theatre of dreams” – the home of Manchester United- Old Trafford, is already its own brand and one that is priceless to Glazer family. The Deloitte list, contains twelve English sides in the top thirty- eleven are Premier League sides- the other is Newcastle United, who top the Championship. This shows the incredible strength financially that comes with being in the Premier League. Everyone from tech company Virgin Media, to Filipino betting conglomerate Dafabet have dipped their toes in the top tier of English football.
With one obvious exception of course, the company whom seem to have their nose in everywhere, except where you’d expect them most.
When Red Bull took over the failing Jaguar F1 team, questions were raised as to what business an energy drink had in a sport made up of supercar companies. Progress was slow to begin with- but, the choice of David Coulthard as the main driver at least gave the team some credibility and when Mark Webber joined in 2007, they had stepped it up a notch. By 2013, Red Bull had a three time World Champion driver in Sebastian Vettel and secured a partnership deal with automotive giants ‘Infiniti’. From 2010 onwards, they have been a top three F1 team and received payments of above $100 million each year from the Formula One.
Given that the company was reportedly purchased for $1 in return for the promise of $400 million investment- getting into the professional racing circuit was a move which has started to pay off for the Austrian company; but having spent a reported $1.2 billion so far they have quite a bit to go.
While they were slowly going through the ranks of circuit racing, they also took the rally scene by storm.
Red Bull first took over the Citroen Rally team, who had World Champion, Sebastien Loeb at the wheel; once again they were putting together a winning image. Loeb went on to win four World Rally Championships under the Red Bull branded Citroen C4 who parted ways in 2013. However, that wasn’t the end of their interest in the sport nor did Red Bull continue to have their brand on the side of a winning car. Ahead of the 2014 season, German car giants “Volkswagen” unveiled their new VW Polo with Red Bull as the main sponsor and Sebastian Ogier as the head driver. Four World titles later with Ogier at the fore and a trend starts to emerge- if you’re under the Red Bull brand, you’re going to be a champion.
This is not limited to rally or formula one but also to skateboarding, snowboarding, rallycross, sailing and any extreme or ‘Xtreme’ sport you can think of. (Because when you remove the ‘e’ and capitalise the ‘X’ that is when you know you could get hurt doing it). It seems strange that non Red Bull competitors can win competitions organised by them; but is it not more strange that they can? Seems a little paradoxical. Last year, Red Bull hosted 16 skateboarding competitions, including the famous X Games, while sponsoring 44 different pro skaters.
Nonetheless, Red Bull’s marketing strategy can only be seen in a light that when they takeover a sports team, that team go on to be champions. This strategy is obvious in football as well as followers of the Austrian Bundesliga fans will know. In correlation with their other takeovers, Red Bull also began their investment into the football scene- taking over Austrian League side, SV Austria Salzburg.
Unlike in rally, where sponsors come and go, history is a major side to football and an issue which the company faced in its earliest days. Having taken over the club, they announced a completely new brand stating “this is a new club with no history”- causing outrage among the Austrian football scene and the Salzburg faithful. However, after winning the Austrian Bundesliga seven times since the takeover- the new history of the club seems all that more appealing. The conquerors of Austria then turned their attention on their brothers in the German Leagues, purchasing the club licence of a fifth division team, SSV Markrandädt. The licence allowed them to change its name, crest and bankrolled the construction of a new 44,000 capacity stadium. However, they did hit some obstacles along the way concerning the naming of the club and ownership issues.
In Germany, there are laws in place to specifically stop the kind of corporate takeover that swallowed SC Austria Salzburg whole. Rule 1: You cannot name your team after your sponsor- so Red Bull Leipzig became Rasenballsport Leipzig or RB Leipzig. Rule 2: Clubs must have a 50 +1 vote in all club decisions. Only investors who are in the club for 20 years are the exception. The aim of this is to prevent ticket hikes by the club’s main sponsor. The club got around this by making the cost to become a member €1000 per year- a cost only 17 people have been able to afford and they just so happen to be former employees of Red Bull. To put this into perspective, while 17 members vote in the RB Leipzig decisions, over 139,000 have a say at Borussia Dortmund. The ethos of the club goes against that of German football hence they became known as the ‘most hated club in football’ by many Bundesliga fans.
Nevertheless, like them or loathe them, the success of Red Bull’s strategy is undeniable with RB Leipzig sitting in second of the top tier of German football- behind only Bayern Munich, a club founded in 1900. The trajectory of the club is simply astounding, and is sure to end with them winning a league title in the next few years; something that the Red Bull team must have seen. Yet, the difference between winning the Bundesliga and winning the Premier League is over £100 million- so why are they aiming so low?
Even the setup of the league structure in England is much more welcoming than that in Germany, there is no league that is more saturated with sponsorship than the Premier League. The talent pool in England may be a reason for their lack of investment in the League. At Leipzig, the business model is to find young, German talent on the cheap, and develop them into league winning players worth millions before selling them on. In England this model simply would not work because of the sheer lack of local talent with the ability to climb the leagues; and any sniff of talent with such ability is over-hyped and over-priced.
While Red Bull are committed to bankroll smaller teams to the top of their division, they must be able to see continuous profit from selling players and this model does not work in England. While Southampton can be seen as a close model to what Leipzig have, their aim is not to be champions, it’s to compete. Plus, Red Bull would not be committed to continuously providing the £100 million it would take to get an English side to cement themselves as a top side in the Premier League.
Per their investment, if you can’t be champions, then Red Bull don’t want their name associated with you.