Red Bull’s strategy at Leeds United is becoming increasingly clear.
The half energy drinks company, half sports investment vehicle bought a significant minority stake in the West Yorkshire club earlier this year.
Red Bull were one of the earliest proponents of the increasingly popular multi-club model and, as well as Leeds, own five other clubs worldwide.
As part of the deal to buy into Leeds, Red Bull have also become the club’s front-of-shirt sponsor in what is a record deal for a Championship club.
Red Bull have moved to reassure fans that, unlike with their club outposts in Germany, Brazil and beyond, there will be no changes to Leeds‘ name as a result of the partial takeover.
However, that does not mean that the Austrian company will be an inconspicuous presence at Elland Road.
To explore the multinational’s plans for Leeds, TBR spoke exclusively to Liverpool University football finance lecturer and author of the Price of Football Kieran Maguire.
Red Bull aiming to take Leeds global
While many supporters are excited about what the group can bring to the table, a number were livid when images of the club’s new Red Bull-sponsored home shirt emerged earlier this week.
Some were frustrated that Leeds now have a red-coloured sponsor due to its associations with arch-rivals Man United.
However, Maguire forecasts that these concerns will be more than offset by the financial boom that Red Bull will provide.
“While some Leeds fans might be mildly miffed about the prospect of having any red on their shirts because the rivalry with Man United, the vast majority are pragmatic,” he claimed.
“They will know that if you’re going to be sponsored by a company called Red Bull, having the red sponsor is part of the overall deal.
“It is going to be very lucrative and it will help catapult Leeds’ profile as an international brand.
“That is going to bring a lot of money into the club, so I’m sure they will see that the benefits outweigh the cultural costs.“
How much will Leeds’ Red Bull deal be worth?
No specific figures have been disclosed as part of the front-of-shirt partnership, although it is certain to represent a huge upswing on the club’s previous deal with Boxt.
The fee will be comprised of a base rate plus a number of performance-related bonuses, as is common practice in the sponsorship industry due to opportunities to increase exposure.
Maguire claims this could see the total value of the deal surpass £10m per season.
“The arrangement will be very much tiered and linked to the success of the club on the pitch.
“In the Championship, it’s a good deal if you’re getting anything over £1m.
“This deal is likely to be worth seven or eight times that as a minimum. If Leeds can get to the Premier League and perform well, we could be getting closer to £10m.
“The club has a large fanbase and the nature of Red Bull, who spend a lot of money on marketing, is that they want to be associated with vibrant and progressive brands.“
Leeds could host ‘Red Bull Cup’
It is not uncommon for sponsors to lend their name to a pre-season tournament hosted by their partner clubs.
Arsenal have the Emirates Cup while West Ham have the Betway Cup, for example.
These events are another way for the sponsor to deepen their links with the club and garner increased exposure for their brand.
Red Bull are world experts in marketing and have carefully cultivated their brand via links to multiple sports, including Formula One and various extreme sports.
They have already shown signs of wanting to integrate Leeds into their sports network, with a number of Leeds players recently visiting Red Bull Racing.
This is territory Leeds are already familiar with given that their majority owners are the investment vehicle of NFL side San Francisco 49ers, whose president Paraag Marathe is now Leeds’ chairman.
Maguire predicts that more commercial tie-ins of this nature are very much on the cards.
“Having links with other markets and products is likely to be a step forwards for Leeds commercially.
“We have seen Liverpool take a similar approach with Nike and their relationship with their ambassadors, the likes of LeBron James and so on.
“Therefore, we could see Leeds host a Red Bull Cup with RB Leipzig and so on.
“Also, there is the potential for a tie-in with Formula One. That might mean some of the drivers visit Elland Road.
“That would be part of a general levelling up and globalising of not just the Red Bull brand but also that of Leeds United itself.”