How Red Bull gave birth to a cash cow and made millions

Being beaten by F91 Dudelange from the tiny football nation in the first qualifying round of the Champions League five years earlier had also underlined the need for seismic change at Red Bull Salzburg.

There was, though, more of a conceptual shift than a managerial one at the Austrian champions.

"Red Bull gives you wings," was the advertising slogan of the sports energy drink around that time and their billionaire businessman owner Dietrich Mateschitz was not afraid to ruffle a few feathers.

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He turned to the visionary German coach Ralf Rangnick in the wake of the Dudelange reverse, asked for his advice on how to turn around the fortunes of Salzburg and their sister club RB Leipzig at the highest level, fully embraced his far-reaching recommendations and embarked on a radical overhaul of their entire football operation. 

His fellow club owners in his homeland thought he had drunk one can too many of his caffeine-laden product at the time.

“Nobody believed it would work,” said Michael Smejkal, a reporter with the Salzburger Nachrichten newspaper as well a local football historian. “Football is such a harsh business. The turnover of managers and coaches at the highest level is great.

“But Rangnick changed everything. He stopped the hire-and-fire system, stopped international managers coming in and telling the club which players they had to bring in and what style of football they had to play. He said: ‘We will produce players ourselves and tell them how we want to play football’.

“Mateschitz thought it was a very good idea. He believed the whole football structure of Red Bull was absolute b*******. He also had the money, the patience and the nerve to wait for results.

(Image: SNS Group - Rob Casey) “Most investors don’t like long-term projects. But Red Bull owned Salzburg 100 per cent. Mateschitz said, ‘We will do it like this and we will wait 10 years if we have to’. There was nobody there who was saying, ‘This is wrong! We need more success in the short-term’.  Ultimately, Mateschitz was proved right.”

Indeed he was. It took a little time for the changes to come to fruition. But when they started to do so there was no looking back. They won the Bundesliga title 10 years on the spin and regularly excelled in Europe. 

Rangnick was an advocate of the three Ks (kapital, koncept and kompetenz, or money, concept and competence). But a key aspect of his masterplan was the creation of a feeder club.

Red Bull GmBH set up Liefering in nearby Grodig and started sending their most promising young academy talents to play there so they could gain invaluable experience at senior level and develop physically, tactically and technically.

Chris Docherty, the head of men’s elite strategy at the SFA, namechecked Liefering last month when he outlined proposals for cooperation clubs which have been put forward in the “transition phase” paper. The governing body are hopeful the plan will increase the number of youngsters who make the difficult move from the youth teams to the first teams at senior clubs in this country.

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With good reason. There have now been dozens of outstanding professionals who have made their first steps in the paid ranks at the tiny second tier outfit and then gone on to far bigger and better things elsewhere.

 “Liefering is more or less the second team of Red Bull Salzburg,” said Smejkal. “Salzburg brings players in to their first team squad from their academy at the age of 16 or 17. Normally after one year they go up to Liefering and play there for one or two years. Then they go back to the first team in the top league.

“Liefering are 100 per cent owned by Red Bull. But dual ownership is not an issue because they cannot get promoted to the top league and they do not play in the cup. So there are no problems with the Austrian Football Association as there is never a meeting with Salzburg.

“Liefering play exactly the same kind of football as Salzburg. But the same is true of the academy teams. They play the same system from under-14 level up. So they don’t have to make any changes or learn anything new when they move up.

“This is the most important thing – that the first team head coach has exactly the same ideas as the whole Red Bull organisation has. If you have academy coaches, a second team coach and a first team coach who all have different ideas it won’t work. It is very important that they bring in a manager who embraces their ideology.”

(Image: PA) Smejkal added: “More or less all of the Austrian players who have played for Red Bull have come through at Liefering. You can’t downplay how important Liefering is to Red Bull. Sometimes players would only play five games before they were called back and promoted to the first team because the coach thought they were ready. Things can move very quickly at Salzburg.

“Current Austrian internationalist Nicolas Seiwald, Xaver Schlager and Konrad Laimer, who have gone on to the German league, to Leipzig and Bayern Munich, all came through at Liefering.

“Siewald is a very good example. He is one of the original Salzburg players. He is from a small village half an hour outside Salzburg. He played in the academy, then Liefering, then Salzburg, then Liepzig.”

However, Liefering has not just helped Salzburg to produce more homegrown players for their first team. It has banked them millions of euros in transfer fees in recent years as well. Red Bull has very much created a “cash cow” according to Smejkal.  

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“When this all started Red Bull invested hundreds of millions of euros before Salzburg even got close to winning the Austrian championship,” he said. “They burnt so much money.

“Now the club is a cash cow for them. Last year they made €117m from selling players. They were the third most successful team in Europe when it came to selling players they had produced in their academy. It is something that Red Bull is very proud of.”

Red Bull Salzburg have very much, though, been victims of their own success. Other clubs across the continent have started copying their approach and they have found it tougher to attract the best teenage talents. They have had to change to a degree in recent seasons. 

“I spoke to the Red Bull scout earlier this year and he told me that they were being forced to bring in older players because lots of other clubs in Europe were doing exactly the same thing as them,” said Smejkal.

“But they still manage to attract a lot of players because of their reputation for bringing through young players into the Salzburg first team and from there into the Champions League.

“These boys know that when they are 20 they will be playing in the Champions League and for their national teams and can get more publicity for their careers. If a player is 17 and they go to Liverpool or Manchester City there is a lot of talent there and it is harder to break through than it is at Salzburg.

“But now a lot of teams are targeting young players and Salzburg are going for older players. For example, last month they brought in Bobby Clark from Liverpool. It was a very unusual move for them to bring in a 19-year-old British guy. But things are changing.  He came because he knows Pepijn Lijnders (who was assistant to Jurgen Klopp at Anfield) and thinks he can make better steps than he can at Liverpool.”

(Image: Newsquest Design) Fans, too, are unhappy that fewer Austrian players are emerging than did so in the past. “Liefering bring in young players from the region,” said Smejkal. “But they can bring in professional players from other countries when they turn 16. In the last few years, most of them have come from Africa. There is a cut and in the last few years it was always the Austrian players who have failed to make it.

“When they first started there were a lot of local players, like Alex Schlager and Konrad Laimer, who broke into the the Salzburg side, went on to the German league and stepped up to the national team. Now there are only two Austrians, neither of whom is from Salzburg. This is hard for the fans to accept and is the cause of much discussion in Austrian football.

“Fans would like more Austrian players to come through. This is very important for Salzburg supporters. They have always wanted to have Austrian players, especially players from Salzburg, involved in the first team and that has not been the case so much recently.

“They have made it back into the Champions League this season so everyone is happy at the moment. But the minute they lose a game or go out of the competition the questions will be asked again. Why don’t we have Austrian players? Why don’t we have Salzburg players? It is a bad situation for many people.”

But turning Liefering into a feeder club has been overwhelmingly positive for Red Bull Salzburg and is something that their counterparts in Scotland, where they are not allowed to enter B teams into the top four leagues in the pyramid set-up, should seriously consider going forward if they want to enjoy the same benefits on and off the park.