Football Finance expert Adam Williams has shared what Red Bull’s investment in Leeds United could mean for the upcoming transfer window.
Leeds announced this morning that the global energy drinks brand has agreed to a minority stake in the club, though the exact amount at this stage remains unknown.
Amid takeovers of the likes of Leipzig, Salzburg and New York, Red Bull are certainly controversial when it comes to their ventures into the football world.
However, Phil Hay has confirmed they will not be taking a seat in the boardroom, and therefore have no power to change the club’s name, stadium or badge.
Instead, Red Bull will just be taking their place as the front of shirt sponsor, replacing BOXT, with it reportedly viewed as the largest sponsorship deal in EFL history.
Paraag Marathe has already confirmed Leeds will have funds to spend
It has been well documented that after Leeds’ failure to win the play-off final on Sunday, key players will have to be sold in order to comply with the EFL’s PSR constraints.
Due to the reduction in parachute payments in the second season after relegation, those will only become tighter for Leeds this summer.
However, chairman Paraag Marathe has confirmed funds will be available for Daniel Farke to spend in the coming months, stating that Leeds are in a good position from an investment standpoint.
Leeds are also going to continue pressing on with their plans to expand Elland Road, which is just yet more evidence of what a strong position 49ers Enterprises have the club in off the pitch.
What Red Bull’s investment means for Leeds’ summer window
LeedsUnited.Newshas spoken exclusively to Football Finance expert Adam Williams about what Red Bull’s investment will mean for the upcoming summer window.
He says that while Leeds already had ‘wriggle room’ anyway in terms of PSR, the ‘capital investment’ from Red Bull will only benefit them in terms of their ‘power’ in the market, even hinting a potential ‘player trading’ relationship across their football network.
He said: “At this stage, the scale of Red Bull’s investment isn’t clear. It’s been described only as a ‘minority’ stake. But the statement says the deal will come with capital investment, which suggests Red Bull won’t be a ‘token’ investor.
“That will have a material impact on their power in the transfer market. They already have wiggle room in terms of FFP. This will give them more headroom – although exactly how much isn’t obvious.
“The extra commercial income from the shirt deal will likely be the biggest driver at present. Leeds’ previous shirt deal with Boxt was worth £6m-a-year when they were in the Premier League, though the value will have fallen with step-down clauses in the second tier.
“The Red Bull deal will be a significant upswing on that figure, regardless of what league Leeds are in. It’s likely to be the biggest front-of-shirt deal in Championship history. Probably £8m-plus, with that figure rising if they win promotion.
“The commercial merits for Red Bull are clear too. Leeds are a huge brand and rank in the top 20 clubs worldwide for shirt sales, even in the Championship. They will also benefit from knowledge and resource sharing across Red Bull’s football network, with a player trading relationship possible.”