The Power and the Glory in the beautiful game and beyond: The Red Bull Leipzig case

October 15, 2014

Paul Hinks and Tudor Rickards

Red Bull Leipzig is one example of the way financial power is creating sporting success in football. In Germany, there has been a reaction from opposing fans on ethical and cultural grounds

Germany’s framework for sustainable football success centres on a “50+1” model where 51% of each club must be owned by its members – to date the model appears to have worked well in serving Germany’s football community.

The fans as important stakeholders

In brief, external parties (including large firms) are permitted to invest in Germany’s domestic football clubs – however they’re barred from having overall control. The boards are chosen by the club’s shareholders and its members (typically also supporters) These stakeholders directly influence how their club is run.

When Red Bull visited Union Berlin

On 21st September 2014 when Red Bull Leipzig played Union Berlin at their Försterei stadium, Red Bull Leipzig were greeted with 15 minutes of silence from the 20,000 Union Berlin spectators who were clad almost entirely in black. The Guardian provided more insight:

With permission from Union’s management, fans had handed out black plastic ponchos at the gates, along with a pamphlet headlined, “Football culture is dying in Leipzig – Union is alive”.

“Today’s opponent embodies everything that we at Union don’t want from football”, it read. “A marketing product pushed by financial interests […], players with euro signs in their eyes […], supported by brainwashed consumers in the stands who have never heard anything of fan ownership”.

A banner inside the stadium stated: “Football needs workers’ participation, loyalty, standing terraces, emotion, financial fair play, tradition, transparency, passion, history, independence.”

Not a black and white story

This not a simple story of right versus wrong, or David versus Goliath. It may be a battle between two sets of values. Berlin represents the communitarian values found in German league football. But that has to be connoted with the fact that idealism has not prevented the dominance of one club, Bayern Munich. Does this make Bayern the object of wider cultural opprobrium?
In the context of Red Bull, it has been argued [link in German] that some balancing financial power is needed to break the dominance of Bayern.

How about Real Madrid and Barcelona?

In Spain, Real Madrid and Barcelona are both financial powerhouses. Barca has a cosy communitarian image, Real the commercial and ruthless one. Again, it may not be as simple as that. Despite Barca’s splendid fan-friendly way and support of good causes, it has received favoured treatment at State level.

Power and Leadership

Despite Red Bull being portrayed as the villain by FC Berlin fans – there is something intriguing about Red Bull’s motives and what they’re aiming to achieve here. Red Bull has a track record of successful investment in other sporting franchises, so FC Leipzig isn’t some kind of new and bizarre experiment; Red Bull are following their previous blueprints for success at Red Bull Saltzberg and also at New York Red Bull.

The spirit of sport

No doubt, football romantics would prefer a vista where all are equal and everyone is given their equal chance. For Berlin’s fans to dress in black and lead a silence of 15mins demonstrates unity and belief in a set of values – values which are increasingly diluted in a football world dominated by high commercial stakes.


Felix Baumgartner gives Red Bull more wings

October 15, 2012

On 14th October 2012 a new global hero was acclaimed, as Austrian Felix Baumgartner stepped from a balloon-borne capsule 128,000-foot above the Earth’s surface

The feat which broke multiple world records was backed by Red Bull as the Red Bull Stratus project

The ultimate extreme sport spectacle

As Teressa Iezzi, editor of Co.Create put it:

“Red Bull’s idea of risk is that one of its sponsored athlete’s bodily fluids will turn into gas as he plummets 24 miles from space at 800+ miles per hour while his parents, girlfriend, and the rest of the world watch, live. With the Red Bull Stratos Project, the energy drink brand-turned-media company brought extreme sports spectacle to new heights and redefined the idea of content marketing, PR stunt, and brand utility”.

A fitting tribute

The story is a fitting tribute to Chaleo Yoovidhya the inventor of the Red Bull energy drink, who died in Bangkok at the age of 89 earlier this year. Nor is it unexpected that the Company which is headquartered in Austria was able to find an Austrian to play the starring role.

Yoovidhya came from poor origins in the northern province of Phichit, moving to Bangkok in search of work. Showing entrepreneurial flair, he was employed as a salesman before starting his own pharmaceuticals company drawning on Eastern and Western medical traditions.

One of his products was a tonic drink aimed at keeping factory workers and truck drivers awake through long shifts. It was called Krating Daeng, Thai for Red Bull and comprised a complex mix of sugars, vitamins, and health supplements.

In 1982, his business took off after an Austrian entrepreneur Dietrich Mateschitz discovered Krating Daeng on a sales trip he was making to Asia.

The Independent outlined the development of the Red Bull product

“According to the company’s website, Mateschitz tracked down Mr Yoovidhya, and the two men became business partners, setting up the Red Bull company to take the Thai drink to an international market. In 1987, Red Bull was launched in Austria. Twenty-five years on, it is sold in more than 79 countries”.

An international entrepreneur sees the potential for a product, and helps form a partnership. In Austria the potential was seen for developing the brand through Formula 1 racing, and now through the most outrageous of creative marketing projects.


Chaleo Yoovidhya, Red Bull magnate, dies aged 89

March 20, 2012

Chaleo Yoovidhya, the inventor of the Red Bull energy drink, started his business career with a product for keeping his long-distance drivers awake

The creator of Red Bull, who became one of the world’s richest men thanks to the success of the fizzy, caffeine-laden drink, died yesterday [17th March, 2012] in Bangkok of natural causes. Chaleo Yoovidhya was 89.

His career acquired wings

Chaleo’s entrepreneurial career acquired wings and soared to success. In that respect it was symbolised in the subsequent cartoon-like advertising of his famous energy product, Red Bull.

Wired in

A source close to LWD talks of the significance of the product for her business associates: “Some of them seem wired into a diet of Red Bull, chocolate and coffee” she told LWD

Chaelo’s origins

The Thai billionaire came from poor origins in the northern province of Phichit, moving to Bangkok in search of work. Showing entrepreneurial flair, he found work as a salesman before starting his own pharmaceuticals company which appears to have drawn on Eastern and Western pharmaceutical knowledge.

Career outline

The Independent outlined his career:

One of his products was a tonic drink aimed at keeping factory workers and truck drivers awake through long shifts. Called Krating Daeng – Thai for Red Bull – the mixture of water, sugar, caffeine, taurine, inositol and B vitamins provided the inspiration for what is now the world’s biggest-selling energy drink.

The Austrian entrepreneur Dietrich Mateschitz discovered Krating Daeng on a sales trip to Asia in 1982. According to the company’s website, He tracked down Mr Yoovidhya and the two men became business partners, setting up the Red Bull company two years later in an attempt to take the Thai drink to an international market. In 1987, Red Bull was launched in Austria. Twenty-five years on, it is sold in more than 79 countries.

Thanks to the soaring sales of the drink, Mr Yoovidhya became the world’s 205th richest man, with a fortune of £5bn.
Showing no lack of energy himself, he married twice, and had 11 children, five from his first wife and six from his second. Today, [18th March 2012] Mr Yoovidhya’s family will start a week-long series of traditional Buddhist rites at a monastery west of Bangkok.

Entrepreneurial innovation

The trajectory of the innovation is a familiar one in stories of entrepreneurial success. The entrepreneur draws on local knowledge of market needs, and learns of the pharmaceutical properties of local products. He applies his knowhow to address a corporate need (keeping his truckers alert). He accepts the offer of an international partnership showing business flair.

It is not a trajectory that is easily replicated from the laboratories of the global pharmaceutical giants.

Acknowledgement

To Thaivisa.com for image of Mr Yoovidhya and local biographic knowledge.