Red bull dominates soccer – with a hierarchical system

Red bull dominates soccer - with a hierarchical system

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"The ball is round and the game lasts 90 minutes." The old and much-quoted soccer wisdom of national coaching legend Sepp Herberger still holds true almost 68 years after the Miracle of Bern. But since then, the sport, in which the round has to go into the square (to quote another of Herberg’s maxims), has steadily evolved.

The balls are no longer made of cowhide, players are allowed to change clubs before the end of their contracts in exchange for a transfer fee – and clubs have long since ceased to belong to their supporters. These are just three of countless paradigm shifts that soccer has experienced in recent decades.

Especially the latter point catapulted the sport to new heights. With the opening up to private investors and sovereign wealth funds, soccer clubs have become a financial investment, and for many involved even an object of speculation. In order to let this business field flourish, more and more players built up a whole network of clubs that profit from or even depend on each other in various ways.

In the following, t-online presents three of the different networks that determine current European professional soccer.

1. The pyramid – or also: the "Red Bull" system

Imagine if Bayern talent Tanguy Nianzou was loaned out to second division club Erzgebirge Aue for a few games in the middle of the season. In an extreme case, the Frenchman would play for the record champion one weekend, and the traditional club from Saxony the next.

As you can see, it is difficult to imagine such a construct in Germany. The situation is different in Austria.

Over the past 20 years, the Red Bull Group, led by majority shareholder Dietrich Mateschitz, has established a clear hierarchical system for its own soccer clubs. First and foremost, the parent club Red Bull Salzburg with its subsidiary FC Liefering must be mentioned here.

But the Austrian serial champion is not the top of the pyramid in this respect. This place is taken by the German Bundesliga team Rasenballsport Leipzig. The two other clubs, Red Bull Bragantino (Brazil) and New York Red Bulls (USA) play almost a subordinate role in this process.

The Red Bull hierarchy graphically represented. (Source: t-online/Heike Abmann)

How closely the clubs are interlinked can be seen from four examples.

  • First, there is coach Jesse Marsch, who was head coach in New York from 2015 to 2018, then was made co-coach in Leipzig and became head coach in Salzburg after one year. After two seasons in the city of Mozart, he returned to the Saxon metropolis.
  • Ralf Rangnick was sports director of Leipzig and Salzburg between 2012 and 2015. After the end of his second stint as head coach of Leipzig (2018 to 2019), he became "Global Sports Director" of Red Bull and thus responsible for Bragantino, Salzburg, New York and Leipzig.
  • 18 players have transferred from Salzburg to Leipzig since 2012. In addition, there are seven others that went the opposite way.
  • One of the most famous examples of the "system-conform" is the "system of the clubs Passing through the Red Bull principle is the current Bayern star Dayot Upamecano. Curious: The Frenchman played within one season for his parent club RB Salzburg as well as for FC Liefering.

Dayot Upamecano attacks current Barca star Frenkie de Jong (then Ajax, from right, archive photo, 2016) in an FC Lieferung jersey. (Source: imago images/Pro Shots)

Dayot Upamecano attacks today’s Barca star Frenkie de Jong (then Ajax, v.r., Archive image, 2016). (Source: Pro Shots/imago images)

Liefering, a district of Salzburg, is not the second team of the first division club RB Salzburg, but a so-called cooperation club.

What is a cooperation club at all?

Thanks to the so-called cooperation player contract, it is regulated that a player can play for two clubs within one season. This is how Red Bull Salzburg and subsidiary club FC Liefering mutually benefit from each other.

The one club (Salzburg) gives the player playing practice at a higher level than the regional league in which the club’s second eleven would play. The cooperation club (Liefering), on the other hand, receives support from first division talent for selected matches.

"Cooperation agreements can be concluded between clubs in the 1st division. Performance level and clubs of the 2. Performance level", it says in the regulations on cooperation agreements at the Austrian Football Association. These provisions are the reason why this type of cooperation agreements are possible in Austria. However, RB Salzburg also pays a high price for it. Due to the cooperation agreement, the club does not have its own second team. This results in the Red Bull club having to pay an annual penalty.

But what are the legal advantages of such a contract compared to a club’s own U23 team? t-online has checked with the sports lawyer Gunther Gram from Austria. "Legally, the advantage is that the cooperation agreement is not a transfer. The player gets playing practice and becomes more valuable for his parent club", explains the lawyer.

Sports lawyer Gunther Gram was available to t-online for an interview. (Source: own image)

Sports lawyer Gunther Gram was available to t-online for an interview. (source: own picture)

However, there are two prerequisites for such a deal. Firstly, the player must not be older than 22 years old. Secondly, the clubs involved must not be in the same league, there must be at least one level between the clubs.

Salzburg and Liefering are certainly the most prominent example. However, there are also other Austrian clubs that have signed such a contract. For example, Austria Wien cooperates with Wiener Neustadt. Because the clubs are not allowed to compete in the same league, such a contract is always only valid for one year. If the second division club is promoted or the first division club is relegated, the cooperation must be terminated.

And what is the situation in Germany? As described above, something like this is hardly imaginable in Germany. However, sports lawyer Gram emphasizes: "If Fifa considers this to be unproblematic for Austria, there is nothing to be said against it on the basis of the Fifa regulations."

2. The club’s own "Loan Army

Parma went into the 2013/2014 season with 184 players on loan. This season, an Italian club, Robin Gosens’ Atalanta Bergamo, also holds the top spot – with 65 professionals on loan after all.

Why do clubs inflate their squads but at all so gigantic?

The term "Loan Army, Leiharmee, made famous by Chelsea FC, because they recognized loaning as a business model like no other club before them. You invest in young players, keep loaning them out until they reach a sufficient dividend on resale.

Examples of this practice are u.a.The following are some of the most important players for the presentation: Mainz-born Croatian international Mario Pasalic, who was finally signed permanently by Atalanta Bergamo in 2020 after five loan spells; ex-Cologne player Tomas Kalas, who was loaned out to the cathedral city for six months in 2014 without making any appearances and has been lacing up his boots exclusively for English second division club Bristol City since 2019; and BVB star Thorgan Hazard, who was released by the Blues in 2015 after a successful loan spell moved to Borussia Monchengladbach.

Chelsea FC signed Thorgan Hazard in the spring of 2012 and loaned him directly on to Belgian first division club Zulte Waregem (archive photo). (Source: imago images/Belga)

Chelsea FC signed Thorgan Hazard in the spring of 2012 and immediately loaned him out to Belgian first division club Zulte Waregem (archive photo). (Source: Belga/imago images)

These three players alone brought Chelsea transfer revenue of over 30 million euros. However, Kalas was the only one who succeeded in his nine (!) contract years to just four appearances for Chelsea’s professional team. So these players were nothing more than an investment for Chelsea, stocks they traded in. So with an investment of just over 9 million euros, they came out with a profit of over 21 million euros.

This principle of the "Loan Army" is particularly well thought out, if you take weaker clubs from abroad as a kind of greenhouse for your young talents to the side. At Manchester City, this task is done by the Spanish club FC Girona. Piquant: half of the shares in Girona belong to ManCity owner, the City Group from the United Arab Emirates, the other half to the Guardiola family with Pep Guardiola’s brother Pere as straw man.

Pere Guardiola (archive photo, 2013): The brother of star coach Pep officially holds the shares in Spanish second-division club FC Girona. (Source: imago images/MIS)

Pere Guardiola (archive photo, 2013): The brother of star coach Pep officially holds the shares in Spanish second-division club FC Girona. (Source: MIS/imago images)

However, Fifa wants to tighten the regulations for the loan of players for the coming season. Among other things, a minimum duration of a loan of one year and a maximum number of players that a club is allowed to loan out should be specified.

Among other things, it should be forbidden to pass on professionals who have already been loaned out to third clubs. Also, in the future, a club will only be allowed to loan three players to a given club during a season – which would capitalize on Girona’s usefulness to Man City, for instance.

Furthermore, the total number of loans per season will also be limited for each club: Starting next season, a club will be allowed to loan a maximum of eight professionals to or from another club. This number drops to six professionals from the 1. July 2024. Exorbitant "Loan Armys", as they are common in Italy in particular, one wants to become so gentleman.

However, one clause could lead the project ad absurdum: Players up to 21 years of age and players that a club has trained itself are not covered by the rule.

3. The "colored bag" principle

At first glance, not every club network in European soccer appears to be as coherently constructed as, say, the Red Bull pyramid or a "loan army" is. But as is often the case in life, it is worth taking a second, in-depth look at the big picture. For example, in the case of the U.S. entrepreneur Chien Lee.

Lee, with the help of his investment company NewCity Capital, has put together a colorful bag of soccer clubs all over Europe.

  • Barnsley FC, Championship (2. League), England
  • FC Thun, Challenge League (2. league), Switzerland
  • KV Oostende, Division 1A (1. League), Belgium
  • AS Nancy-Lorraine, Ligue 2 (2. League), France
  • Esbjerg fB, 1. division (2. League), Denmark
  • FC Den Bosch, Eerste Divisie (2. League), Netherlands

Chien Lee currently owns these six professional clubs in Europe. (Source: t-online/Heike Abmann)

A common thread is obviously not recognizable. By what does Lee choose his associations – and what strategy does he pursue with them??

  • He pumps his money into clubs:This is what Chien Lee thinks about the Super League
  • Cooperations and networks:What Bavaria does differently from Red Bull
  • Club in the hands of the desert state:Qatar’s plan in a small Belgian town

Exactly these questions have the busy businessman, who had already announced in December "sooner or later" to also want to take over a Bundesliga club , answered in an interview with t-online. Read the full interview soon on our website.

This article is part of the t-online focus on "Club networks in European professional soccer". First, in a report you can read here , we approach the question of why the state of Qatar has taken over a soccer club in the small German-speaking town of Eupen in eastern Belgium, of all places, and what goals both the club and the desert state are pursuing in doing so. To the other learn here exclusively from an internationally known investor what his strategy is .

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