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Leeds United chiefs 49ers get £5.35bn takeover boost in the US
The buy-in from the investment arm of the San Francisco 49ers and Red Bull is a significant endorsement of Leeds United’s brand – regardless of what division they are in.
As yet, no details have emerged regarding the scale of Red Bull’s minority investment earlier this summer, but it is believed to be a significant stake.
When the 49ers bought Andrea Radrizzani out last summer, the club was valued at £170m, down on a reported £400m had they retained their Premier League status.
At £170m, the US group will likely feel they have secured something of a bargain.
Yes, infrastructure investment is needed and the failure to return to the top flight last term was a setback for the club, but the resilience of matchday and commercial income demonstrates the club’s value.
Red Bull recognise the brand exposure they can get from Leeds, a club with a global following who shifted more shirts last season than all but 16 other clubs in Europe.
49ers meanwhile clearly see Leeds as a capital appreciation project and believe they can generate a huge return at some point in the far future.
It is interesting to see how Leeds compare as a business to the San Francisco 49ers themselves, the NFL outfit who reached Super Bowl LVIII in February.
And the latest news from the United States sheds some light on the interplay between the two institutions.
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49ers receive £5.35bn endorsement from America
In the NFL, costs are relatively fixed and there is the added financial security inherent in the franchise model.
As such, valuations of NFL clubs are extraordinarily high relative to clubs like Leeds, whose value demonstrably dropped by £230m overnight following relegation from the top flight.
The 49ers last changed owners in 1977, when the DeBartolo Family paid $13m for the franchise.
In today’s money, $13m is $67m – but the value of the 49ers has increased far more dramatically than that as TV deals and the commercial utility of the sport has risen.
In fact, a new valuation from has estimated the 49ers’ value at an astonishing £5.35bn, which is an 11 per cent increase on the previous year.
That makes Leeds’ proxy parent company the fifth most valuable NFL franchise.
What are the 49ers and Red Bull’s ultimate aims at Elland Road?
The 49ers and Red Bull are likely both in it for the long haul.
In Red Bull’s case, it takes time for a brand to truly become part of a club’s identity – especially if, as they have promised will remain the case, they do not give their name to the club.
The energy drinks company may have capital appreciation aims (i.e. to one day flip their equity in the club for a profit) but it is more likely that Leeds are primarily a marketing venture.
For the 49ers, or more accurately their investment arm, the aims are likely more traditional in terms of value growth.
Their commitment to investing in capital expenditure projects, such as the redevelopment of Elland Road, show that they won’t be selling up any time soon.