4.7 million euros annual profit, 346.5 million euros in sales and thus growth of almost 10 million euros – RB Leipzig also has excellent figures for 2021/22. The liabilities to financier Red Bull, however, rose sharply.
RB Leipzig has presented its figures for 2021/22. IMAGO/Michael Weber
Specifically, they grew by EUR 41.7 million from EUR 59.5 million (as of June 30, 2021) to EUR 101.2 million (as of June 30, 2022). This emerges from the recently published annual financial statements of RasenBallsport Leipzig GmbH for the 2021/22 season. However, it would be wrong to draw the conclusion that the Leipzig system works “on credit” from the main shareholder, Red Bull GmbH. The whole thing is a little more complex.
Die “Bank” Red Bull
To put it simply, the Red Bull Group is nothing more than a bank for the RB kickers. Because the Saxons have no liabilities to banks. Unlike, for example, competitors such as Eintracht Frankfurt (52.3 million liabilities to banks/as of December 31, 2021), 1. FC Köln (26.7 million/6/30/2021), Borussia Mönchengladbach (80.4 million/12/31/20121) or VfB Stuttgart (41.6 million/12/31/2021).
The RB annual report says about the liabilities: “Investments in player assets are financed by loans. The level of loan liabilities thus develops in line with the level of player assets in fixed assets. A balanced maturity structure of receivables and liabilities ensures a permanent flow of liquidity and short- and medium-term liquidity bottlenecks are not likely. The company regularly uses the freely available funds for special repayments.”
The Werner example
This of course gives the management, at that time still under the management of today’s Supervisory Board member Oliver Mintzlaff, certain freedoms when it comes to contract extensions or offers for sought-after professionals. An example: In April 2019, Red Bull GmbH converted a 100 million euro loan into equity for RB Leipzig. At that time, RB played poker with Timo Werner to extend the contract, which expires in 2020, so as not to lose the attacker on a free transfer a good year later. There was initially no agreement until the summer of 2019.
RB could afford to risk the free transfer to extend on August 25, 2019, very late in the transfer window, with Werner, who moved to Chelsea a year later for a reported 53 million euros. In principle, a win-win situation: RB later generated a high transfer fee and the contract extension at that time will hardly have been to Werner’s detriment.
Because in the end it’s like this: If a bank gives money, it does so in the hope of making a profit by conceding certain securities such as land or real estate. If an affiliated company gives money, in this case the parent company Red Bull, it has a tangible interest in the economic success of the subsidiary and would presumably make more money than a bank if the worst came to the worst.
Stable interest rates at Red Bull?
Against this background, it is interesting to look at the item “Interest and similar expenses” in the 2021/22 RB annual financial statements. These were just under 1.7 million euros. If you take the average of the liabilities at the beginning (almost 60 million) and at the end (around 100 million) of the financial year at Red Bull, i.e. 80 million euros, you would get an interest rate of just around 2 percent.
If the shower manufacturer maintains this value for the present and the near future, in which bank interest rates will be much higher, the reigning DFB Cup winner would have a further, considerable competitive advantage over the competition, which has to make such high one-off investments such as transfers from bank financing.
2023-07-21 21:41:18
#High #liabilities #Red #Bull #system #works
