Red Bull adds to its sport portfolio with minority stake in Leeds United

Red Bull is taking a minority stake in Leeds United, the first foray into English football by the energy drink company whose sporting portfolio includes clubs in Europe and the US as well as Formula One racing.

Red Bull will also become the front-of-kit sponsor for Leeds, whose bid for promotion to the Premier League collapsed on Sunday with a 0-1 loss to Southampton in the Championship playoff final.

Terms of the investment were not disclosed, but Leeds chair Paraag Marathe told the Financial Times that Red Bull would be neither the largest nor the smallest minority investor in the club, with the financial figures set to fluctuate if Leeds were to gain promotion to the Premiership.

Marathe said he could “barely get out of bed on Monday” following the club’s deciding loss, but the investment from Red Bull would help “cushion” the club as it continues to pay down existing debts, particularly from some £190mn in outstanding transfer fees.

“The choice isn’t to sell players, it’s a requirement of the rules,” he said, citing English football’s profit and sustainability requirements. “I want to be right at the legal limit every year, because I want to put as much money on the pitch as we can. Every pound, every £1mn, every £10mn helps.”

The Austrian energy drinks company is rebounding from a scandal earlier this year. A complaint against Christian Horner, the boss of F1’s Red Bull Racing, was dismissed in February following a barrister-led investigation into allegations of inappropriate behaviour against a female employee. Horner has repeatedly denied wrongdoing.

In addition to its racing team, Red Bull was a pioneer of the multiclub strategy that has become increasingly common in football, building a portfolio of teams in places such as Leipzig, Salzburg and New York. Each of those clubs are named for the brand, though Marathe made clear no such privileges would exist in Yorkshire.

“Leeds will never be the Leeds Red Bulls. We will forever be Leeds United Football Club,” he said.

Oliver Mintzlaff, chief executive of corporate projects and investments at Red Bull, said the company shares management’s “ambition to bring Leeds United back to the Premier League”.

Leeds was relegated last year after three seasons in the top flight. In July, it was acquired by 49ers Enterprises, the strategic arm of the US National Football League’s San Francisco 49ers led by Marathe and Jed York.

Marathe, a Bay Area native, is part of a growing roster of US sports executives building transatlantic football empires, including the Glazer and Kroenke families.

Reflecting on his first full year as chair, Marathe said Leeds is “sufficiently capitalised on the investor side” but that it remains open to further commercial partnerships. He had not been looking for an equity partner, Marathe said, but enjoyed meeting with Mintzlaff and tapping his expertise across sport.

“I’m smart enough to know that I don’t know what I don’t know,” Marathe said. “And so when there are things that come up that I maybe have not seen before, I have a nice phone-a-friend that I can call and ask advice.”