After weeks of rumored declining health, the founder and owner of the Red Bull corporation Dietrich Mateschitz died on Saturday at the age of 78. The passing of the Austrian business tycoon who built a small soda brand into a global commercial empire over the last several decades leaves a great deal of questions, many of which won’t be answered for some time.
Mateschitz was theoretically the owner of the soccer club this website covers as well as numerous other sporting entities across the planet. But delayed and delicately-worded public statements from New York and all of Red Bull’s corporate entities illustrated the sporting empire’s status more so as part of a corporate machine Mateschitz happened to own rather than a giant box of his own personal toys.
Red Bull GmbH’s official statement to media on Saturday night expressed “gratitude for what he changed, moved, encouraged and made possible” but also a plea to respect “his wish to express your grief in silence and restraint.” It was a characteristic statement for a figure who revolutionized the global sporting landscape while largely remaining in the shadows himself. Mateschitz was nominally the owner of the New York Red Bulls, but only as part of a worldwide sports and entertainment empire that included additional soccer and action sports operations on several continents, a media network accused of right-wing sympathies, and most notably multiple elite auto racing teams. While Mateschitz was often touted as the wealthiest of Major League Soccer’s owners, such status was obscured by Mateschitz’s lack of public presence, and was also misleading given New York’s status as just one of dozens of different sporting ventures he bankrolled.
Indeed, Mateschitz never publicly attended a match at the opulent stadium he financed in Harrison, and with rare exceptions, was never directly involved in the administration of New York’s Major League Soccer franchise. The statement from MLS on Saturday night was also oddly-worded in a strangely poignant way that illustrated the pivotal but impersonal nature of his relationship with the club and league. Never directly referring to Mateschitz as part of its group of owners, the statement again addresses him as the figurehead of a corporate entity that actually owns the team.
Indeed, as described by German publication Focus earlier this month after the initial reports of Mateschitz’s failing health, the contemporary Red Bull corporation is no longer a private drink manufacturer but rather is now essentially an advertising company. The objective of the conglomerate built by Mateschitz, a former laundry detergent and toothpaste marketing executive, is to keep the brand in the public eye in order to maintain the value of bottling contracts sold to regional distributors. The soccer teams and Formula 1 cars and stratospheric skydiving capsules each lose money…but all advertising and promotional ventures in any industry inherently lose money. Thus, as Focus describes, New York and all the corporation’s soccer teams are in an odd space where they are necessary and central to corporate objectives but are not “without alternatives” should a Mateschitz-less Red Bull decide to take its branding in a different direction.
This different direction could indeed be embarked upon. Mateschitz was secretive about his personal life but has reportedly long planned to bequeath his share of the corporation to his 29-year-old son Marc Gerhardter, who has been involved in the administration of some of the company’s beer brands and real estate ventures and has been spotted with his father at various football and racing events through the years. But such an inheritance is not guaranteed, as Mateschitz is not technically the company’s majority owner. Mateschitz launched the Red Bull brand in the 1980s through an agreement that gave 51 percent ownership and directional agency to the late Chaleo Yoovidhya and his family, the proprietors of the initial Thailand-based version of the drink. Reporting about the Yoovidhyas is vague but seems to indicate that they desire to retain and potentially take more control of the company’s direction in the absence of Mateschitz. However these efforts could be stalled by both the age of current family patriarch Chalerm, now 72, and scandals surrounding the family in recent years including alleged tax dodging in Panama and a son who committed a fatal hit-and-run in 2012.
But even in a worst-case scenario (or, depending on your point of view, best-case scenario) where the Red Bull sporting empire is sold for scrap, such a process would likely take years if not decades, with New York unlikely to be one of the central rings of the ripple. After early phases where the initial Red Bull clubs in Salzburg and New York largely did operate as well-funded but directionless billboards, a great deal of effort has been expended over the last decade to streamline Red Bull’s soccer teams and embed them deeper into the corporate infrastructure. The hiring and delegation of responsibility to respected footballing executives Gerard Houllier and later Ralf Rangnick generated a cohesive technical strategy while the empowerment of commercial chief Oliver Mintzlaff over the same period has allowed the soccer program to become a more self-sustaining part of Red Bull’s broader business activities.
Mateschitz’s death in fact comes at a time when New York has never been more plugged into Red Bull’s sporting apparatus and when MLS has never been a more potent commercial opportunity. The current head coach Gerhard Struber was known to be a personal friend of Mateschitz, with the Red Bull patriarch reportedly pulling strings two years ago to ensure that New York would hire the former Red Bull Salzburg academy coach. The construction of Red Bull Arena in Harrison and the building out of the club’s youth infrastructure over the last decade has been an indirect but visible product of Mateschitz’s largesse — one of the only times I can recall direct acknowledgment of Mateschitz’s role in the club was when former New York youth director Bob Montgomery credited him for the academy’s professionalization. But the New York club’s expansion has also been accelerated by the rising tide of MLS as a whole. Oddly enough, a post-Mateschitz tightening of the belts at Red Bull could mean that their American club with far more market upside would have higher chances of survival than their successful but more boutique hometown operation in the Austrian Bundesliga.
So don’t start plotting your mergers or fretting about Cosmos 3.0 just yet. Much like the common discourse about whether or not New York is a “farm team” that Mateschitz supposedly cheaped out on, eyeing the direction of the club after his death requires recognition that it is just one part of a broad sporting portfolio that has long ceased being wrapped up in a single personality, if it ever was in the first place. Dietrich Mateschitz has passed on, but the corporate model of soccer he passively pioneered looks to be here to stay.