Historical context
RB Leipzig is a German football club based in Saxony, a city located on the Eastern side of Germany and was part of the former German Democratic Republic (GDR). After the Berlin Wall fell and the previously divided Eastern and Western football leagues were combined, most East German clubs struggled. They did not have the same resources as clubs in the West and could not compete in the new market, which led to a rapid slide down the leagues.
In preparation for the 2006 World Cup, the German Football Federation (DFB) attempted to fairly balance the number of host venues between the eastern and western halves of the country. However, the organisation had to face up to the reality of not finding enough suitable facilities in the former GDR, not only limited to stadiums, but also hotels, restaurants and other visitor needs, as well as transportation infrastructure. In the end, only one of the 2006 World Cup venues was in the former East Germany, the Zentralstadion of Leipzig.
The emergence of RB Leipzig was beneficial in terms of bolstering the football scene in East Germany. Not only did the club have enough resources to get into the Bundesliga but to also stay there for a long period of time. This represented a break from the never-ending spiral of insolvencies which had condemned the traditional clubs of the region, FC Lokomotive Leipzig and BSG Chemie Leipzig, to the amateur leagues, after facing bankruptcy in the 2000s. Despite this, the introduction of RBL was met with protests from supporters of other German clubs, notably labelling the club as a symbol of a victory of money over tradition, allegedly being founded as a marketing tool and aimed for taking commercialisation of football in Germany to a new level. To understand this, it is necessary to highlight a very important aspect of the national football culture in Germany; the attachment to the Traditionverein, the country's traditional clubs.
Origin of the club
The club was founded in 2009 by an initiative of Red Bull GmbH and became the fifth football asset in the sporting portfolio of the Austrian energy drink company, following Red Bull Salzburg, New York Red Bulls, Red Bull Brazil, and Red Bull Ghana. In contrast to the previous clubs, RB Leipzig did not bear the corporate name, since the statutes of the DFB did not allow it. Instead, the club adopted the name of RasenBallsport Leipzig e.V., and using the initials "RB" and of the nickname “Die Roten Bullen” the corporate identity could still be recognized.
The club began through a partnership with a fifth-tier side, SSV Markranstädt, acquiring their playing right for the Oberliga (5th division), their senior men's team, and their training staff. Renamed as RasenBallsport Leipzig, the club changed the kit and the crest, and after securing direct promotion to the Regionalliga (4th division), it also moved from the Stadion am Bad in Markranstädt to the former Zentralstadion of Leipzig. Red Bull GmbH reached an agreement with the city council of Leipzig for the lease of the stadium over a period over 20 years, in exchange for assuming the maintenance costs of the venue and some further investments for reforming the facilities. The stadium was also renamed as the Red Bull Arena.
RB Leipzig finished its first season in the Regionalliga in 4th place, narrowly missing out on promotion. However, the club succeeded in winning the Saxony Cup, which was the first title in the club’s history, and in doing so guaranteed their first participation in the DFB-Pokal. Despite a better performance in the following season, the club was not able to reach the 3rd division until 2013, coinciding with the arrival of Ralf Rangnick as the new sporting director. The 2012–13 Saxony Cup was another success and RB Leipzig managed to defeat Chemnitzer FC in the final, qualifying again for the DFB-Pokal. Just a year later, after a series of undefeated streaks in the 3rd division, RB Leipzig promoted to the 2. Bundesliga, becoming the first club to do it after only one season.
Ownership and governance
The fast promotion of RB Leipzig caused a lot of controversy in the country, revolving around the apparent involvement of Red Bull in the decision-making of the club. All seven founding members of the club were either employees or agents of Red Bull GmbH, which contradicted the fundamental principles of the 50+1 rule (https://www.bundesliga.com/en/news/Bundesliga/german-soccer-rules-50-1-fifty-plus-one-explained-466583.jsp), as interpreted by the Deutsche Fußball Liga (DFL). To tackle this problem, in 2014 the football association voted unanimously for the creation of a new spin-off organization in the form of a GmbH. RasenBallsport Leipzig GmbH became at that moment responsible for the professional team, the reserve team, and men's junior teams from U15 and above, while the football association, RasenBallsport Leipzig e.V., remained responsible for men's junior teams from U8 to U14 and all women's football teams.
Red Bull GmbH was the main shareholder of RasenballSport Leipzig GmbH, holding 99% of the shares, while the remaining 1% was held by the football association. However, as required by the 50 + 1 rule, the formal power still rested within the association, which kept most of its voting rights, ensuring that the members had overall control of the club. The executive body of the association was the Vorstand (Management board), which was appointed by the Ehrenrat (Honorary board) and subordinated to the Aufsichtsrat (Supervisory board).
Until 2014, both the management board and the honourary board comprised of either employees or agents of Red Bull, which contradicted the fundamental principles of the 50+1 rule, aimed to prevent private investors from taking over clubs and potentially push through measures that prioritise profit over the wishes of supporters. As part of a compromise with the DFL, which had required RB Leipzig to change the composition of the organisational bodies, the club made a binding declaration to ensure that the management board was to be occupied by a majority of people independent of Red Bull.
On the other hand, by that time, the registration fee for becoming a RBL member stood at €100 and the annual membership fee at €800, in comparison to Bayern München, who offered memberships at annual fees between €30 and €60. In addition, a person willing to pay the fee could not expect to become a member, since the management board could reject an application without notice. This restrictive membership policy of the club faced a lot of public criticism, since a third of the original requirements set up by the DFL to obtain a license for the 2. Bundesliga was to lower the membership fees and open the association for new members. RB Leipzig gave in to the pressure and announced changes to the membership scheme, making it possible for a person to become an official supporting member. In addition, the annual fee for this membership changed to a range between €70 and €1,000, giving the supporting members certain privileges in return, such as meetings with the first team players or fitness sessions at the Red Bull Arena. Supporting members also acquired the right to attend general meetings, albeit without voting rights.
In terms of investment, Red Bull GmbH initially planned to provide the club with a total of €100 million over a period of 10 years, including the redevelopment of the stadium, the construction of new training facilities and the acquisition of new players. In addition to this, Red Bull committed to sponsor the first team front kit and the stadium name, providing extra revenue per season, estimated to be around €12.3 million (€12 million for the kit + €0.3 million for the naming rights).
With the regards to multiple club ownership, UEFA allowed both RB Leipzig and Red Bull Salzburg to compete in European competitions, given that the two teams are separate entities and that, strictly speaking, after 2014, RB Leipzig was “just sponsored” by Red Bull rather than owned.
Road to success
Despite all the criticism received, the emergence of RBL has been really positive for the league, given the increase in the general competitiveness and the recovery of the quality football in East Germany, which was limited for many years to smaller teams. There are also multiple examples of traditional clubs which have not made it anywhere and have relegated to lower divisions after unsuccessful seasons in the Bundesliga. In that sense, the lack of deep-rooted traditions has been taken as an advantage by the management board of the club, since the structural changes and staffing decisions have been implemented quickly and flexibly, without having to deal with established hierarchies or a resisting environment.
The steady growth of the club since its foundation and the recurrent participation in the UCL since the promotion to Bundesliga, being able to compete against wealthier clubs from more liberalised leagues (e.g. Premier League, La Liga, etc.), prove that the strategy defined by the managers of the club is so far successful. From a business perspective, the club is sustainable and profitable, albeit it is still too dependent on the resources of the corporate investor, Red Bull GmbH, both for the yearly revenues received in terms of sponsorship as well as for the money received on grants since 2009. Nevertheless, it is worth mentioning that the debt towards Red Bull should not be a barrier going forward, bearing in mind the constant financial growth of the club and the increase in value of the first team players during the last two seasons. Some notable first team players and their increase in value is listed below:
Over the years, the management board has targeted a healthy development and growth of the club, trying to use as many homegrown players as possible, hence the construction of the new training grounds. In that sense, the club has continuously scouted foreign promising and affordable players all around the world and currently has a total of 13 different nationalities within the first team squad, which also matches with some of the fundamental values of the club, in terms of tolerance, openness and diversity. The average age of the first team is 24 years, way below the ones of Borussia Dortmund (24.7) or Bayern München (25.3). Thanks to this approach in the recruitment strategy, the club has also been able to self-impose a salary cap for the players, guaranteeing its sustainable growth.
With regards to the fan support, RB Leipzig is trying to ensure that football remains affordable and thus offers one of the cheapest season tickets of the Bundesliga. The club has managed to achieve an active and democratic fan culture, the development of which has now led to a total of around 60 Official Fan Clubs, that share most of the values of the club. According to a survey carried out by the Leipziger Volkszeitung, RB Leipzig, during its first year in the Bundesliga, became the third favourite team in Saxony and Thuringia, only surpassed by FC Bayern München and BVB Borussia Dortmund. This popularity explains the rapid consolidation of the fan base of the club, as well as the high levels of regular attendance to the arena, which skyrocketed from a base of 21,566 people in the opening game in 2010 to a record of 43,348 fans during a cup game against Vfl Wolfsburg in 2015. Fans around East Germany have waited many years for high class football and RBL with its philosophy and success is giving them almost everything that could have expected.