1. A look at Red Bull New York’s balance sheet:

    Okay, I posted this on BigSoccer, and I felt the need to also post it on Tumblr. However, it is a VERY LONG POST, so I’ll include an introduction and then a read-more split.

    So I come across this thread on BigSoccer from this person asking how much Red Bull has invested in the team. He then said, and I quote:

    The Red Bulls seem to do good in financial terms:

    http://www.stadiumzone.weebly.com 

    (To save you the trouble, the site is a list of soccer clubs and their revenues. The site had RBNY at €50 million, or $66 million USD.)

    First, I answered the original question. I gave a number based on what the team paid AEG for the team, what they paid AEG for their half of the stadium deal, their yearly losses ($14 million in the first season alone), and what they paid to build the stadium. I came up with $384 million.

    Then I very loudly refuted the idea that Red Bull was making anywhere near $66 million. I used some figures from the SportsMoney program on YES (recorded by Keepin’ It Real) to provide some context.

    Then he kept persisting, so I broke it down section-by-section. Here’s the full response, under the fold.

    Red Bull can’t give their clubs revenues. They can fund the clubs, and accept losses, but the company can’t donate money to the clubs and call it revenue. The clubs have to make the money themselves, and RBNY, based on the figures we have, aren’t making that kind of money.

    Here. Let’s break the revenue sheet down in parts, using the SportsMoney thing as a reference.

    Tickets - Average: $4.4 million. RBNY is probably above this average considerably. Say the average ticket is around $35 (it’s probably a little less, but I’ll give the benefit of the doubt.) Multiply that by the average gate and by the number of games played, and you get a very deceptive number, considering how many tickets the club gives out for free to youth soccer clubs, etc. But let’s use it anyway; it comes out to $11.7 million.

    Premium Seating - Average: $1.6 million. So according to this article about jacking up luxury box prices (by more than double!) in 2012 the 2011 season saw prices of between $65,000 and $75,000 for the 30 suites. Again, let’s split the difference. $70k times 30 suites… $2.1 million.

    Concessions and Merchandising - Average: $0.7 million. Thank you DoctorK for the reminder about merch revenue. RBNY’s concession numbers shouldn’t be any higher than anywhere else, especially since the service is so God-awful. But for the sake of argument, let’s overshoot it a little and say $1 million.

    Exhibitions and Events - Average: $2.8 million. We don’t know how much money RBNY got from hosting the All-Star Game (and Dispatch), but for the sake of argument, let’s say it roughly compensates for the lack of summer friendlies for RBNY this season. Add to that whatever money Arsenal paid RBNY for showing up for the Emirates Cup. Again, it’s probably less (we don’t even know if Arsenal paid them anything) Let’s just say it was $5 million.

    Advertising and Sponsorships - Average: $3.4 million. Red Bull sponsors the shirt, but since they also own the team, there is no sponsor revenue through that. Red Bull famously came in in 2006 and deliberately collapsed any relationships they had with long-serving sponsors. They’ve done better recently in mending that relationship, and let’s give them a cut of whatever national sponsorship MLS benefits from. However, considering there is no shirt sponsor, let’s subtract from that average the lowest (released) jersey sponsorship, which is RSL-XanGo at $1 million. Therefore, it’s hard to believe this figure would be higher than $2.4 million.

    Stadium Naming Rights - Average: $1.1 million. Red Bull also sponsors the stadium. No revenue here. $0.

    SUM Distribution (TV money, etc.) - Average: $1.6 million. Like every other club, RBNY gets a cut of the money received through Soccer United Marketing. SUM controls MLS’s TV contract. We know, for a fact, that the Red Bulls get very little money, if any, from their local contract with MSG. So let’s go right on the average at $1.6 million.

    The total of all those factors comes to 23.8 million. Now, that number is about as rosy an estimate as I can give, and it’s much higher than the average.

    Similarly, let’s look at the expenses end, just to get some perspective:

    Team - Average: $3.0 million. We know the team’s salary was $13.4 million. Let’s add to that the salaries of all the coaches and training staff, and let’s lowball it and put it at$14 million.

    Stadium - Average: $4.2 million. Okay, let’s ignore the property tax situation right now (would come up under a different category anyway). I don’t know for sure, but I would wager that the price of maintaining a stadium in New York is not the same as it is in Columbus. But let’s say it is. $4.2 million.

    SG&A (Selling, General, and Administrative) - Average: $3.9 million. It’s probably more expensive to run an administrative staff in New York too, especially that the team now has one . But, because we’re painting a rosy picture, let’s say it’s at the average, $3.9 million.

    League Capital Call - Average: $3.1 million. I honestly have no idea what this is, but it’s apparently something that all MLS teams contribute to equally. I guess it’s to cover the league’s own operating expenses? I don’t know. $3.1 million.

    Total that out, and it comes out to $25.2 million. So, using the best, most convenient estimates possible, RBNY still lost at least $1.4 million in 2011, without even taking into account taxes, depreciation on the stadium, etc. Now, the real question is, is the drink/lifestyle/philosophy end of the operation benefiting enough from the marketing to make those operating losses (as well as the $350 million they spent in capital expenses) worth it?

    I spent far more time on that than I should have.

    tl;dr: Red Bull still loses a lot of money on the team, and they don’t make any more than $25 million in revenue.