• Richard Tester

Energy Drinks & Sheikhs | The New Global Pyramid Structures


As football fans around Europe tuned in to watch the final stages of the Champions League, many would have had to take a second glance as the team RB Leipzig paired with PSG for a chance to reach the final in Lisbon.

The team from eastern Germany (formerly in the DDR) came from seemingly nowhere to the penultimate stage of the world's biggest and most popular club competition. Their adversaries on the evening PSG aren't exactly coveted with history and success either, and when you throw Man City and their recent rise into the mix, it's time to take a step back and ask what on earth is going on.

Football is changing. The days where you had innocent local figureheads in the community owning football clubs (James Gibson at Man Utd in ‘30s and ‘40s or Jack Walker at Blackburn in the ‘90s) are long gone. Football has been up for sale ever since 1992 (advent of the Premier League and the modern Champions League) and in recent times is being used as vehicles to further political or commercial gain.

From Sheikh Mansour and the City Football Group's expanding network of clubs, to energy drink Red Bull creating a growing empire of franchise clubs to showcase their brand in mass, we're entering a new football world. So let's dive in and see what we find.

City Football Group

Sheikh Mansour's take over of Man City back in 2007 wasn't simply a tale of a rich man buying a new toy but part of an ambitious strategic move to re-brand the United Arab Emirates (UAE) and kick-start a growing portfolio of clubs globally that are intertwined and commercially beneficial for its owners.

A decade on and the City Football Group now operate a total of 24 teams (and counting) including Man City, New York City and Melbourne City. From Australia to the US, Spain to Japan, the group has been aggressively expanding into different territories. They've quickly developed a global scouting network and intra-club framework only matched by Red Bull (more on them later).

The groups' stake in each club differs, from recently acquired Girona FC where they own a 44.3% share with Guardiola's brother Pere Guardiola, to majority owned City. Depending on the level of ownership, the club will be re-branded accordingly, with the likes of New York and Melbourne changing their team colours, badge, sponsors and name (insert 'City') which understandably has raised alarm bells with the more traditional football fans who feel this is a commercial takeover that is stripping clubs of their history and traditions.

A recent edition, Torque from Uruguay, recently saw the club name change to Montevideo City Torque and club badge changed to reflect the new links to Man City and the other clubs within the City Football Group. Other clubs like Girona are yet to see changes to their name, badge or colours but this would be because they're not majority owned by the group.

The sporting nature of the group revolves around a growing network of clubs with whom players can be traded internally to maximise their growth and from a commercial perspective, their value. It's highly unlikely we'll see many young rising stars end up in Man City's first team but the structure allows them to flourish and grow in the second division of Spain or move Stateside to fulfil a gap in the playing squad.

There is however a more political strategy at work here. With football being the world's most popular sport, the beautiful game is now being used as a means to promote and encourage business in a state or region. The words 'Emirates' and 'Etihad' we're virtually unheard of before the influx of takeovers and new sponsorship began. Fast forward to 2020 and they're words embedded into our culture and language. By normalising language through stadium naming rights and shirt sponsorship, states such as the UAE become more appealing and marketable for business opportunities with the west.

Opening doors in the business world is a tough sell at the best of times, but by spreading their tentacles into Europe's most popular sport and its historical and cultural institutions, the new football conglomerates are essentially buying themselves brand awareness, influence and likeability one step at a time.

Red Bull

Over the past two decades, Red Bull has spread it's wings (if you'll pardon the pun) and become a sports and media powerhouse that just so happens to sell energy drinks.

From sponsoring two Formula One teams (Aston Martin Red Bull Racing & Alpha Tauri) to having Felix Baumgartner jump down from space, Red Bull is now a content machine with huge global ambitions. It's not a surprise to anyone that the world of football has been targeted so ruthlessly and successfully of late.

Red Bull currently have four clubs within it's portfolio, RB Leipzig, Red Bull Salzburg, New York Red Bulls and Red Bull Bragantino. All four of these clubs have changed their crests to fit a marketing playbook template. All of their home colours are now white, donning the famous Red Bull logo and their names have been adjusted so that one way or another the brand is pronounced or visible.

They've been clever too, circumventing German league rules around name changes. RB Leipzig is officially known as 'Rasenballsport Leipzig', which translates as 'Lawn Ball Sports', so effectively it's little more than a sneaky backdoor to pronouncing it 'RB' for brand reach. Further to this, their German rivals feel that RB Leipzig has exploited the traditional and legal system by only having 17 members with voting rights - with the majority directly linked to Red Bull.

Whilst traditional fans in Germany have made their voices loud and clear on the unethical rise of RB Leipzig, there's no real platform for disagreement over their success. Having effectively started from the bottom (purchasing minnows SSV Markranstadt before re-branding them), they've shot up the divisions, positioning themselves as one of the top clubs in the Bundesliga and produced talents such as Sadio Mane and Naby Keita.

Powell from Cateret Group stated that '"Its goals are similar to City Football Group, both have established a global pyramidal structure in relation to its player development with each team in the group assisting the other. Red Bull appears to have succeeded in developing marketing nuances that set the benchmark for other companies". Quite frankly it's hard to argue with that, even if it doesn't feel quite right.

Seeing clubs bought over and completely stripped off their culture and history to be replaced by an energy drink brand feels incredibly uncomfortable and only opens the doorway for other brands and states to test the waters if their wallets are deep enough.

Conclusion

The emergence of these two new structures has paved the way for new exciting teams and talent to emerge, breaking the monopoly of Europe's largest clubs and showcasing a new more successful and innovative way to run a club(s).

On the flip side, clubs are being used quite blatantly for commercial or political gains that blur the ethical lines of the sport. What will the future of the sport hold? Will it become common to see clubs become nothing more than a franchise club to a fashion, drinks or electrical brand? Coca Cola Cagliari? Monster Motherwell? We've already taken a massive step in that direction and once the door is slightly ajar (especially in the UK, Spain and Italy), don't be surprised if this becomes the norm in the decades to come.

As the 'City' and 'RB' brands grow, others will latch on, especially if it's commercially successful. Fans of certain clubs (failing or with unfulfilled potential) might be eagerly hoping their club is next to join these two growing networks and to piggyback off the value it brings. They should be careful what they wish for, football's soul is at stake.


Written by Richard Tester

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The Billionaires Club - James Montague https://www.amazon.co.uk/Billionaires-Club-Unstoppable-Footballs-Super-rich/dp/1472923103


BBC article on Red Bull https://www.bbc.co.uk/sport/football/51475532


Red Bull club portfolio https://khelnow.com/football/red-bull-group-football-teams-details


City Football Group business model https://www.theeconomyjournal.eu/texto-diario/mostrar/1644023/city-football-group-the-business-model-that-is-taking-over-football



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