Red Star Belgrade Needs a New Business Model

Red Star Belgrade (Crvena zvezda) is one of the biggest football clubs in the Balkans. It is a former winner of the European Cup, today’s Champions League, and it commands a vast fan base across Serbia and the wider region. What the club achieved over its history placed it among the most significant clubs in this part of Europe. Over the past decade, Red Star has once again posted notable results on the European stage and has been trying to find its way back to the paths of its former glory.

Yet a return to the company of Europe’s biggest clubs does not depend on results on the pitch alone. It also requires a change in business policy: a sustainable business model that allows the club to grow over the long term and to reduce its dependence on uncertain income.

Red Star operates in specific economic and geographic circumstances. It is based in the heart of the Balkans, in a country with a relatively weak economy, limited purchasing power and numerous market and infrastructural obstacles. Compared with the 1990s, when the club enjoyed its greatest international success, the environment in which it operates today is fundamentally different. Competition is fiercer, European football has become a serious industry, and the financial gap between the biggest leagues and clubs from our region keeps widening.

This is precisely why I believe Red Star must change the way it views its own business potential. The club cannot rely, in the long run, primarily on player sales and qualification for European competitions. It has to develop additional, more stable sources of revenue. In what follows, I present two proposals that I believe could mark a significant step in that direction: the commercial development of the Red Star brand, and the modernisation of the Marakana through a partnership with a strategic investor.

Red Star Belgrade’s Untapped Commercial Revenue Potential 

In an earlier piece I wrote about a potential development opportunity for the club and a possible move to a different location. The essence of that argument was that Red Star, figuratively speaking, runs its business like a gambler. Its development and survival are tied to a large degree to player sales and income from UEFA competitions, which is extremely risky given the ambitions we hold.

As I have said before, I think the club has stagnated in its development over the past three years. Certain changes to the business model are needed if we are not to remain at the level we are at today, but to keep growing. That is impossible without a clearly defined budget, one that is not built on the principle of “if it works, it works”.

Red Star’s results over the past ten years have been genuinely good when you consider the size of its budget. Yes, there are a few positive examples such as Bodø/Glimt. But there are also a great many clubs with considerably larger budgets that fail to achieve what Red Star does, and they far outnumber the ones that have succeeded. Moreover, the clubs that did succeed rarely managed to stay at that level for long.

For the club to develop further, its annual budget has to be put together differently. It cannot depend so heavily on whether we have qualified for Europe or whether we have managed to sell off half of our youth academy.

From where I stand, there is a particular model that could give us a much healthier foundation for the budget, and I will outline part of that model here.

What Red Star Belgrade Can Learn from Bayern Munich 

Bayern Munich is probably one of the healthiest business systems in European football, and for many it is the benchmark of sustainable management: no massive borrowing, and no reliance on selling players.

Of course, we cannot copy that model wholesale, given where Bayern comes from, the league it plays in and how much money it can generate as a result. Still, part of the inspiration can certainly be found in its business model.

Bayern’s business operations are organised through FC Bayern München AG, a company in which the club holds a 75% stake, while Adidas, Audi and Allianz each hold 8.33%. In other words, major partners have a direct ownership stake in the company that runs the club’s business side, which shows how important it is to connect a club with business giants. The point is not for Red Star to build an identical structure, but to understand how strategic partners, professional management and the commercialisation of a brand can become the foundation of long-term financial stability.

Red Star is probably one of the strongest brands in the Balkans, and that is, in my view, an indisputable fact. I believe the club’s commercial department has failed to use even 5% of Red Star’s potential over the past ten years, that it has made no meaningful progress in exploiting the brand commercially, and that this is exactly where another major development opportunity lies. In my opinion, within ten years that department should have reached a point where it generates a minimum of €20–30 million a year.

To begin with, Red Star should establish a subsidiary, called, for example, Red Star Business Group. Its core activity would be developing the Red Star brand through brand usage rights, licensing and other marketing activities.

First, we need to be aware that Red Star has a huge base of supporters in virtually every part of Serbia. That gives it a large audience and an excellent basis for generating profit. A significant share of that profit could come from the FMCG (fast-moving consumer goods) industry. So let us look at how.

How Brand Licensing Could Generate Revenue for Red Star Belgrade 

There are more than 18,000 retail outlets selling consumer goods in Serbia. If you think about it a little more deeply, in many villages and smaller towns it is almost inevitable that there will be several such shops, simply so that they can survive. From a business perspective, Red Star has the opportunity to reach almost every one of its supporters through this retail network. That is very likely one of the most efficient ways to reach the broader fan base. Not only through social media, membership schemes or online sales, but through the very shops where people do their shopping every day.

As we take the analysis further, the next question arises: what is sold in these shops every day, and which products fit the habits of people who follow sport?

I will take just three categories as examples: beer, soft drinks and snacks.

To grasp the size of the market and its potential, a look at some of the available data is enough.

According to the figures I was able to find, Serbia consumed approximately 454 million litres of beer last year. That is equivalent to around 908 million half-litre units. As for soft drinks, a Coca-Cola report states that the company sold 609 million litres of its non-alcoholic beverages on the domestic market last year. That would correspond to roughly 1.218 billion half-litre units. It is important to stress that this figure refers ONLY to that company’s products, not to the total soft drinks market in Serbia.

Reliable data on total annual snack sales across Serbia are not available, since “snacks” is a rather broad term. Still, judging by the first two categories alone, you can see for yourself that we are talking about an enormous number of products sold.

Not once in the past ten years have I walked into a shop and seen a product bearing the Red Star name. That says enough about how poorly part of the club’s management understands its potential.

The mere availability of such products does not automatically mean customers will buy them. A deeper connection between the club and its supporters has to be built through those very products. The foundation should therefore be a simple, clear and concise loyalty programme.

A Fan Loyalty Programme: Turning Everyday Purchases into Club Revenue

By buying Red Star–branded products, such as beer, soft drinks and snacks, fans would collect points they could spend on match tickets, shirts and other items from the club shop. Realistically, every one of us consumes some of these products. Why wouldn’t we drink a Red Star–branded beer tomorrow, if it were priced in line with other beers, if buying it helped the club, and if in return we had the chance to win a new shirt, a match ticket, a stadium tour and the like?

A good example of a loyalty app is “Sa nama na putu” (“On the Road with Us”), used by the Serbian energy company NIS. Programmes like this show how everyday spending, combined with a reward system, can build a longer-lasting relationship with consumers. Red Star should develop a similar concept tailored to its fans and its products. That app is, in fact, the very reason many people choose NIS over its competitors.

Imagine that every time you buy a Red Star–branded product, you gain a certain benefit, while part of the value of that purchase goes back to the club. Shopping would then no longer be mere consumption, but a way for fans to take part in supporting their club.

Red Star’s official app, although modernised and equipped with some innovative features, does not, in my view, currently offer enough concrete reasons for fans to use it regularly.

I am certain that it is actively used by a relatively narrow circle of people compared with the total supporter base. A loyalty programme linked to everyday shopping could change that and give the app a clear, practical purpose.

Of course, no major brand in the world does everything on its own. Red Star does not need to know every detail of this business model, nor do I believe the people currently working at the club have the capacity to carry out such a large logistical and distribution undertaking by themselves. However, precisely because of its reputation, size and brand strength, Red Star can negotiate with companies that specialise in the production, distribution and sale of consumer goods.

The partners would be responsible for production and distribution, while the club would earn revenue from brand usage rights, licences, contractual fees and a percentage of sales.

That way, Red Star would not have to take on all the business risks of production and distribution. Instead, it would turn its greatest assets, its brand and its fan base, into substantial value and a basis for a better-structured budget.

How Much Could Red Star Earn from Brand Commercialisation?

My primary goal would be for this company, as it develops and expands its product portfolio, to generate €20 million a year in revenue for the club.

That is an ambitious target which requires a detailed business plan, high-quality partners, precise contracts and a serious market assessment. Still, €20 million a year is a goal worth analysing seriously, because it is comparable in size to the revenue the club receives for reaching Europe’s most elite competition, which is our primary objective every season.

The essence is that part of this income would be secured through a business that can grow year on year, instead of the squad being sold off every year under pressure from budget shortfalls.

It is also very important to understand that this would only be the company’s starting position. Over time, it could move into new activities, develop new business relationships and increase its revenue. That would also open up greater borrowing capacity and the ability to finance future business ventures, something that is no novelty for the world’s biggest clubs, which use a variety of means to build a more stable financial base.

Why Red Star Needs Professional Commercial Management

This is the 21st century. The business world is moving at incredible speed, and we still seem to think that serious sums of money will somehow start generating themselves. For that to change, this department needs new people, or professional management that knows how to make the most of the existing potential. Having a strong brand is not enough. You have to know how to develop that brand, commercialise it and turn it into a long-term source of revenue.

If we see ourselves as belonging in the company of Real Madrid, Bayern and Milan, then we must at least strive to run the club along the lines of Europe’s best.

Let each of us try to offer solutions instead of constant criticism. That is the only way we can progress as a society, and, in this case, as the club we support. Let us try to help and offer answers.

New times call for new people.

How a Private Investment Could Modernise the Marakana Stadium 

Over the past few days, I have set out several proposals in my writing for growing Red Star’s business, together with concrete ideas for how this could be achieved. The fundamental problem, and one of the biggest obstacles to our club’s further development, is the instability of its budget, which depends heavily on player sales and potential qualification for European competitions. Without repeating myself, I believe radical changes are needed at the very foundations of the business, so that the club becomes more financially stable and reduces its dependence on these two factors to the minimum.

In the previous proposal, I looked at the potential of the Red Star brand and how its proper commercial development could contribute at least €10 million a year to the club’s budget.

This time, I want to present a model through which Red Star could, figuratively speaking, kill two birds with one stone:

1. Modernise the Marakana without directly investing its own money.

2. At the same time, significantly increase the revenue the stadium generates, which, according to statements by the club’s leadership, is far below the venue’s potential.

Why Does the Marakana (Rajko Mitić Stadium) Need a Major Reconstruction?

Although many will disagree with me, I believe one of the reasons part of the public does not come to Red Star matches, especially in the domestic league, lies in the comfort and infrastructure of the stadium itself. The lack of a roof over every stand, parking problems, too few direct public transport lines and heavy traffic congestion are obstacles that should not be ignored when we talk about match attendance.

I also believe that part of the public has grown saturated with the success Red Star has achieved in recent years, and that attracting more spectators requires a new step forward in development, a better matchday experience and a new leap in results on the European stage. Naturally, the socio-political context is not negligible either, but I do not consider it the only, or the decisive, explanation for the poor attendance at some matches.

For years we have been hearing about grand projects to reconstruct Serbia’s largest stadium. In the recent past, the Marakana was given a cosmetic makeover to meet the required UEFA standards, but it is still far from the functional and comfortable stadium we ought to have in the 21st century. From the famous Chinese-backed “Red Star City” to the latest ideas about building a complex around the stadium, for years we have barely moved beyond 3D renderings.

One of the key problems is the complex web of legal and property relations, which in the future could require serious funds to resolve the land issue. Given the club’s financial situation, it is hard to expect Red Star to finance such an undertaking on its own.

The second problem is the lack of financial capacity for a serious reconstruction and adaptation of the stadium. And that problem will not be fundamentally solved until the club changes its business policy and, you guessed it, starts structuring its budget differently.

That is exactly why I believe an alternative solution is needed, one that would finally allow the modernisation of the stadium to begin without waiting for the complex legal and property issues, which for years have been one of the biggest obstacles to developing this area, to be fully resolved. Those problems cannot be an excuse for indefinitely postponing improvements to the stadium, especially if there is a model under which part of the process can be carried out independently of their final resolution.

The advantage of my proposal lies precisely in the fact that it is not based on building a new complex on disputed land, nor does it involve changing the appearance of the area around the Marakana that is subject to legal and property claims. The focus would be exclusively on reconstructing the existing stadium, improving its functionality and developing commercial facilities within the space the club can lawfully use.

In this way, Red Star could take a concrete step forward in modernising its stadium without waiting for every problem that weighs on any broader development project for the area to be solved.

The Solution: A Dedicated Stadium Management and Entertainment Company

My proposal is that Red Star applies a model that, in various forms, is already used in the international sports industry. Alongside the company dedicated to the commercial development of the brand, I believe a separate legal entity should be established to take over the management of the stadium and the development of all its associated commercial activities.

Let us call this company, for example, Zvezda Entertainment d.o.o.

The idea is that, in line with legal possibilities and a contract with the club, it would take over the management of the stadium’s commercial and ancillary facilities. This would allow the stadium to be treated as a separate business unit, with its own revenue, expenses, investments and clear objectives.

The key point is that the club does not have to sell the stadium in order to attract private capital. What is needed is a model that allows an investor to put money into the reconstruction and receive an appropriate share of the future business, while Red Star retains its interest in the stadium and the benefits of its modernisation.

Let us now turn to the concrete proposal and the business model of such a venture.

I believe an investment of around €20 million could serve as a starting point for a serious reconstruction and functional upgrade of the stadium.

I would direct the funds into four key areas.

Commercial and hospitality spaces around the stands

Converting suitable spaces into upscale restaurants, hospitality venues and club merchandise shops. Red Star has a huge number of fans, yet the space for buying official merchandise remains underdeveloped. One small fan shop can hardly be enough; there should be several around the stadium.

A complete overhaul of the VIP boxes

Modernising the existing boxes and significantly increasing the number of VIP suites, following the example of solutions found at Belgrade Arena and modern European stadiums. This segment has particular commercial potential because it allows companies to use matches and other events for business meetings, hosting partners and building business relationships.

Pitch protection and event technology

Purchasing suitable pitch protection flooring and other equipment that would enable concerts and large events to be held while reducing the risk of damage to the grass. We all remember the problems that followed major events at the stadium, including the concert by Serbian pop star Zdravko Čolić some twenty years ago. A stadium that can host tens of thousands of people should also be a venue for events that are not exclusively about football.

A roof over every stand

This would be one of the most important improvements in terms of spectator comfort. The stadium would become a more pleasant place to be in all weather conditions, which could contribute to higher attendance.

How a Joint Venture Could Fund the Marakana’s €20 Million Renovation

Red Star would sign a joint venture agreement with a company specialising in the management of stadiums, arenas and major events.

The partner would invest €20 million in the reconstruction of the stadium and, in return, receive a 50% stake in Zvezda Entertainment for a period of ten years. During that time, it would hold contractual rights to manage the commercial facilities and to organise events on non-matchdays, with Red Star’s rights to the sporting use of the stadium clearly defined.

The contract could also provide for the partnership to be extended every ten years, on pre-agreed terms and for an appropriate fee, along with rules for the distribution of revenue and profit.

Most importantly, Red Star would not have to take €20 million out of its own budget for the reconstruction. The capital would be provided by the partner, which would earn back its investment through the future business of the joint company.

Let us now move on to the financial analysis and the economic justification of the project for both sides in this potential venture.

Today, Red Star earns significant revenue from ticket sales, but much of that potential is tied to appearances in the Champions League and other European competitions. Revenue that depends on qualification is not equally predictable from year to year, as we have mentioned many times already.

The new company would be tasked with developing the stadium’s business beyond football matches, through hospitality, business facilities, VIP services, concerts and other events.

Marakana Stadium: The Business Case for €8 Million in Annual Revenue 

The potential revenue streams break down as follows.

Rent for European matches: €2.5 million

A fee the club would pay the joint company for the use of the pitch and infrastructure, under a pre-agreed contract.

Commercial spaces: €2 million

Leasing business premises, offices, restaurants and other facilities within the stadium.

VIP boxes and sponsorship: €2 million

Leasing 40–50 VIP boxes to companies at an indicative price of €40,000 per box, plus potential revenue from stadium naming rights.

Concerts and events: €1.5 million

Organising, or renting out the venue for, major concerts each year, with revenue from rental, hospitality and other ancillary services, as well as corporate events.

Total potential revenue: €8 million

This projection assumes the stadium becomes an active commercial venue all year round, not just on matchday.

If we assume the company’s operating costs would be €1 million a year, we arrive at the conclusion that net income could reach €7 million a year.

That would mean a net profit of €3.5 million for the investor and €3.5 million for Red Star.

What Do Red Star and the Investor Each Gain from the Deal?

The investor’s interest would lie in a potential annual return of that amount, which means it could recoup its entire investment in less than seven years. In the business world, such a short payback period is considered a very good deal and well worth investing in.

Red Star would get a modernised, renovated stadium without spending a single dinar of its own money.

It would receive a secure income of approximately €3.5 million a year from the joint company and, most importantly, Red Star would keep its matchday ticket revenue, which, thanks to the renovated stadium, would almost certainly be higher than it is today.

I believe Red Star has the potential to transform the Marakana from a venue used primarily for playing matches into a serious commercial hub that operates all year round. This does not necessarily mean selling the stadium, nor investing tens of millions of euros from the club’s budget. The alternative is to find a strategic partner that would provide the capital, experience and know-how needed for the reconstruction and commercial development of the venue, and receive a contractual share of the future business in return.

The essence of the proposal is simple: modernise the Marakana without directly financing the reconstruction from the club’s budget, increase its commercial value and build an additional, sustainable long-term source of revenue. If Red Star wants to become a more financially stable club, it has to start developing business models in which its value does not depend solely on results on the pitch and the sale of footballers. The stadium is one of the greatest resources it has, and the question is whether we are using it today in a way that truly matches its potential.

Conclusion: Why the Balkan Giant Must Take the Next Step

Red Star has potential that goes beyond what it achieves today under its current business model. Its fan base, history, recognition and position as one of the biggest clubs in this part of Europe are resources that, with professional management and a clear strategy, could deliver significantly more stable revenue.

The proposals to develop the brand and modernise the Marakana represent two possible directions in which the club could make a serious leap forward. They do not mean Red Star should give up its sporting ambitions. Quite the opposite: the aim is to create the conditions in which those ambitions can be financed more sustainably, without constant reliance on player sales and the uncertain income of European competitions.

Getting there, however, will require difficult decisions. The club must professionalise its management, build commercial departments with clear goals and accountability for results, hire people with the necessary experience and open the door to strategic partners who can contribute knowledge, capital and business connections.

Europe’s big clubs recognised long ago that their success is built not only on the pitch, but also through the development of their brand, commercial rights, infrastructure and long-term business relationships. Red Star cannot fully copy their models, because it operates in different economic and market conditions, but it can, and must, recognise the principles that apply to its own case.

The Balkan giant has to make the hard calls and take the next step. If we want Red Star to belong among Europe’s great clubs, it has to behave like one in business terms as well. A huge fan base, a rich history and the status of one of the biggest clubs in this part of Europe give it the foundation for such growth, but on their own they are not enough.

What is needed is a clear vision, professional management and a business policy that allows Red Star to be not just a club that achieves great results when it has a successful generation of players, but a stable system capable of growing, developing and remaining competitive in European football for the long term.

The views expressed in this article are those of the author, Ivan Marjanović, and do not necessarily reflect the views of O4 Football Culture Club.