Red Bull Understandably Wants Out of MLS

By Douglas Smith @DFresh39 on October 2, 2014

Yesterday soccer journalist Grant Wahl reported that the Red Bull corporation will not be involved in the long-term future of MLS. Red Bull GmbH bought the team in March of 2006 for around $50 million and rebranded the MetroStars into the team seen today. When the share in the new stadium and other assets are built into the price, Red Bull paid AEG in excess of $100 million to take over the team. However, the energy drink manufacturer is facing tough business decisions and better soccer prospects in Europe. That is just part of the reason why it makes sense that they would want out of MLS.

In 2013 the highest market growth for the Austrian company was in India, Japan, Turkey, Scandinavia, Russia and Brazil. Growth of sales in the United States is starting to slow and RBC analysts are projecting that Monster Energy is about to overtake Red Bull as the top energy drink in the country. The marketing push in the U.S. for Red Bull seems to have taken a hit also with less commercials on TV and limited random appearances by the Red Bull cars.

Red Bull also owns teams in Austria, Brazil, Germany and Ghana. Red Bull Salzburg has been called the “most-hated team in football” by several publications since the company took it over in 2005 with disregard for its history. The team has had great success in the Austrian Bundesliga.

However, it is Red Bull Leipzig where the profits could be outrageous. They were a fifth-division team called SSV Markranstädt that was once again rebranded and is making a rise through the German ranks. The team that breaks the spirit of clubs ruled by members had the goal of making the top tier by 2016 are currently in third place in their first year in Bundesliga 2.

Wahl also reports that Red Bull is not looking to bring Thierry Henry back. They did not sign a third designated player and scrapped plans to start a USL Pro team. MLS said the team is not for sale, but the asking price for team and stadium is somewhere in the neighborhood of $300 million. There is competition in the NYC soccer market with NYCFC coming, the rebirth of the Cosmos and now many people calling for the awakening of the MetroStars.

Red Bull has a very successful business with Formula 1 racing as well. Given the expansion happening in MLS, Red Bull is showing smart decision making as they look to get out now. They are an older team in the world of MLS run by a big corporation that still has to look at their bottom line. From a business standpoint, getting out now makes sense. It may not happen, but Red Bull knows where their profits are and they are not with MLS.

Douglas Smith is a soccer writer for www.RantSports.com. Follow him on Twitter @DFresh39, “Like” him on Facebook, or add him to your network on Google.

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