clock menu more-arrow no yes

Filed under:

The Red Bulls Lost the Most Money in MLS Last Season

The Red Bulls (were estimated to have) lost money hand over fist last year.

If you buy something from an SB Nation link, Vox Media may earn a commission. See our ethics statement.

Red Bull owner Dietrich Mateschitz.
Red Bull owner Dietrich Mateschitz.
Mark Thompson

The Red Bulls might have been the league's best team last season, but they also hemorrhaged money.

Estimates from Forbes Magazine make the Red Bulls MLS's sixth most valuable team at $114 million, but they also lost $6.3 million last season, more than any other team in the league. That's even more than Chivas USA, who were estimated to have lost $5.5 million last year.

In 2008, when Forbes last did their MLS valuations, the Red Bulls were the sixth most valuable team in the league, but were (still) estimated to have lost money, $4.5 million at that point.

So Red Bull GmbH -- a privately held company with an estimated worth greater than $8 billion -- is losing money on its New York soccer endeavor. A minuscule amount in the whole scheme of things, but money nonetheless. You'd wonder how much longer they're willing to do that as the point of being in business is to, you know, make money.

But owning sports teams is a complicated endeavor. It's been argued that teams aren't business investments so much as they're luxury goods with long-term value, not short-term profitability. According to Forbes, the Red Bulls were worth $36 million in 2008. Since, they've gained nearly $78 million in value, helped, likely, by Red Bull Arena. If you average the $6.3 million the team reportedly lost in 2013 and the $4.5 million it reportedly lost in 2008, it comes out to $5.4 million. Over five years, that's $27 million in losses. Even taking those into account, the Red Bulls still gained $49 million in, essentially, unrealized gain over five years.

There's an extra wrinkle with the Red Bulls, too, as evidenced by the name, the stadium, the jerseys, etc. Red Bull has eponymous sports holdings that span soccer, auto racing and ice hockey. Those, along with Red Bull branded events like Felix Baumgartner's skydive and the Red Bull Air Race lend the Red Bull brand active, edgy qualities, even though the drink itself isn't much different than Coca Cola.

All that is what made Red Bull's 2006 takeover of the MetroStars so controversial. The team was made an extension of the brand. According to the company itself, the United States is a "core market" and one that's seen growth. In its attempt to be the pick-me-up of choice for active young people, Red Bull went to where young Americans are increasingly spending money: soccer. They bought a team and slapped their logo on it.

If Red Bull believes that logo is driving growth in the United States, they'll deal with sustained loses and chalk the losses up to marketing spending. If not, they'll flip it.