In a column for the North Jersey Herald on Tuesday, Ives Galarcep said energy drink giant Red Bull had proved to be a bad owner of the MLS New York franchise after losing so much money in its first year. Later, on his blog, Galarcep clarified his position.
Last year, Red Bull NY spent $14 million more than it made, irrespective of stadium costs. For perspective, the team lost $3 million in 2005, which may not be flattering but at least it represented an improvement over previous years. So where did last year’s money go? No one knows exactly, though Galarcep says marketing costs for opening day were $3.5 million (almost $100 per head). Bruce Arena must have cost a lot, but surely he doesn’t represent the difference. It would be one thing if the team had something to show for its inflated debt, but ticket sales were terrible last year and marketing efforts were poor.
And the story could get worse, he says as the collective jumping-ship of corporate sponsors will be felt more this season than last, because current-year sponsorship agreements are always finalized by the end of the previous year. Galarcep says McDonald’s, Verizon, and St. Barnabas Health Care have now all left. Why-because Red Bull wouldn’t let them be “the official” anything of the team or use their logo in advertisements, which makes a partnership far less valuable for a big brand.