Newcastle Red Bulls: Energy drinks titan can lead rugby renaissance in north
Red Bull has been tipped to lead a rugby “renaissance in a football heartland” after purchasing Prem Rugby team Newcastle Falcons and enacting a rebrand.
Newcastle Red Bulls will join a wider sporting portfolio which includes a Formula 1 team and a string of majority – such as Leipzig – and minority – including Leeds United – football investments.
The Kingston Park club, who have been starved of a trophy for over two decades, will begin life as Newcastle Red Bulls with Steve Diamond remaining in post, at least in the short-term.
Red Bull model
“Red Bull have helped redefine what such a model might look like, effectively stripping away borders to own football clubs, F1 teams and more worldwide,” Neil Hopkins, global head of strategy at M&C Saatchi Sport and Entertainment, tells City PM.
“And where they have invested, they have tended to succeed thanks to a well-grooved marketing template.
“So, if rugby union has even half a chance of enjoying a renaissance in a football heartland like the north-east, then you wouldn’t bet against Red Bull delivering it”
The club had been teetering on the edge with a reduced salary budget for a number of years – their nine Prem Rugby rivals and league backers CVC Capital Partners were in talks to provide £4m to the club last season.
Conversations
But investment from energy drinks titans Red Bull will be seen as a coup for the English top flight, with the league’s chief executive Simon Massie-Taylor insisting their “takeover of Newcastle is a landmark moment for our sport and a powerful endorsement of our vision and strategy”.
A&W Capital acted as lead advisor to former owner Semore Kurdi, who was willing to sell the club intellectual property for £1.
Newcastle’s director of rugby Diamond admitted after the takeover that there had been “very little conversation” with the club’s new owners beyond early meetings but insisted changes at Kingston Park would be done in a “measured way”, albeit “significant” and using “best practice”.
Red Bull had been earmarked as an investor for the rebel R360 rugby league, as revealed by City PM earlier this year, but Diamond stated that the project had not been talked about and that it had not come “across his window”.
Newcastle warnings
Experts warn, though, that big money isn’t always the answer and that it has happened with little success in Newcastle before.
“Premiership clubs have faced mounting losses and insolvency, so this type of high-profile investment can stabilise a club’s finances, boost commercial revenues and attract new audiences,” Professor Rob Wilson tells City PM.
“But it also underlines a key point, the professional game’s long-term health still depends on fixing its structural revenue and cost imbalances, not just relying on one-off rescues from wealthy backers.”
Recalls Hopkins: “It’s been a couple of decades since Sir John Hall sought to create a ‘Barcelona of the north’, buying Falcons to sit alongside Newcastle United to create a European-style sporting club.
“The presence of Jonny Wilkinson, Tony Underwood and Doddie Weir delivered success that was immediate but not sustained.”