The £100m drop: How one big leap for man can launch a company’s profits into the stratosphere

IT TOOK Felix Baumgartner just four minutes to make the terrifying 24-mile journey from a helium balloon on the edge of the stratosphere to the New Mexico desert. Eight million people watched his skydive live on YouTube last week, with many more joining on 40 TV networks across 50 countries, as well as the 130-odd digital channels that took the live stream. When his sponsor Red Bull posted its first picture of Baumgartner on its Facebook site, 30,000 people had shared it within 30 minutes. According to Twitter, “Fearless” Felix was the subject of more than three million tweets.

During those minutes, in which the Austrian skydiver fell at a top speed of 833mph, he broke three aviation records: height reached in a balloon, highest skydive, highest speed at which a human being has fallen. He also gave YouTube its single biggest audience for a live event. It was the culmination of a 24-year relationship between Baumgartner and the energy drink company with the slogan “Red Bull gives you wings”.

He has been with them almost since the beginning, first performing at skydiving exhibitions in 1988. During that time Red Bull has extended the branding of its sticky caffeinated beverage by associating it with a new generation of extreme sports. This latest stunt – Baumgartner’s idea – was seven years in the planning and did not come cheap. Red Bull has not released an overall figure for the cost, although estimates run to tens of millions of dollars. His space suit alone cost £125,000. The balloons come in at £160,000, and contain £45,000-worth of helium. But even if it cost £19 million, one of the highest figures floating around the upper atmosphere, that is just one tenth of Red Bull’s annual spend on sports marketing.

In any case, it appears to be worth it. Although estimates tend to fly around too, some marketing experts put the Baumgartner dividend at approaching £100m and a clear vindication of the sponsorship strategy. “Red Bull is a content driver,” says Alan Hamilton, managing director of the Sports Business, who manages sponsorship programmes for Clydesdale Bank and Carling. “There is news in everything they do. They have managed to lock into their consumers’ feelings: we know what you like to do, come with us on that journey.”

So whatever happened to human endeavour for the sake of human endeavour? When Robert Falcon Scott mounted his polar expeditions it was with the backing of scientific institutions. When Edmund Hillary conquered Everest in 1953 there wasn’t a sponsor in sight. But the breaking of what records remain to be broken now appears to be more about generating advertising and a commercial return rather than any attempt to expand the sum of human knowledge.

With Baumgartner’s skydive, Red Bull takes this business model to its logical conclusion. The company doesn’t just drive content, it creates it for itself and then oversees its dissemination. No other sponsor’s logo creeps on to the Austrian’s space suit, no independent camera operator can frame a shot so that the Red Bull graphics are out of the frame.

Thanks to Twitter, Facebook and the direct relationship the brand has with its fans, it does not need to rely on the conventional media. But when its athlete does something as irresistible as skydiving through space, it knows that everyone will want the story – and the heavily branded photographs.

This may be the company’s most audacious stunt to date, but Red Bull has never feared thinking big, or waving the cheque book. At first it did it the old-fashioned way, sponsoring Formula One. Then the penny dropped: why not just take over the team? In 2004, Red Bull’s Austrian owner Dietrich Mateschitz bought the Jaguar F1 team from Ford and renamed it Red Bull Racing.

It has since been joined by a second F1 team, Scuderia Toro Rosso. Mateschitz has also bought a NASCAR team, an Austrian motorsport arena, an Austrian football club (once SV Austria Salzburg now Red Bull Salzburg), an American soccer club (MetroStars, now Red Bull New York) and a German hockey club (EHC München, now Red Bull München).

Most of the company’s relationships, however, are with individuals from the wilder fringes: free runners, cliff divers, BMX riders and base jumpers. Hamilton described their recruitment process as: “If you’re daft enough, come and ask us and we’ll support your dreams.” These new disciplines are only too delighted to have an international brand set up competitions and events, handle the media and allow them to make a living by riding a bicycle along high walls or jumping off improbable structures. These alternative sports have the added advantage, said Hamilton, of having no Fifa-like organisations running the show. “Red Bull,” he noted, “does not pay big fees to the governing bodies who suck up all the money.”

So stunt rider Robbie Maddison, Daniel Craig’s body double for the bike sequences in the latest Bond movie Skyfall, wants to leap the Arc de Triomphe on a motorbike? Red Bull can fix that. Snowboarder Shaun White, famous enough to appear in his own computer games, has a bespoke half-pipe (the shallow arenas used for snowboarding, skateboarding and BMX riding) built for him by the company. They have the exclusive rights to film him in action on it. Earlier this year, when BMXer Kye Forte dreamed up a mass jump at Alexandra Palace, Red Bull brought 34 of the world’s top riders together to make it happen.

The commercial rewards of all this daredevilry are clear. The brand commands 43 per cent of the US energy-drink market and last year it sold 4.6 billion cans of its neon tonic worldwide. Revenue increased 12 per cent to £3.4 billion – a third of which the company says it ploughs back into marketing.

Does anyone now do a crazy thing on their own, just for the hell of it and to break a record? A Guinness World Records spokesman says they do. “The majority of our record holders do so simply to challenge themselves and for the sheer bloody fun of it.” New Yorker Ashrita Furman, for example, holds over 100: for walking 80 miles with a milk bottle balanced on his head, performing 9,628 sit-ups in an hour and many other improbable achievements. “While his record attempts generate countless publicity he never accepts sponsorship,” the GWR spokesman said.

For feats that require more than a ready supply of milk bottles, however, sponsorship is essential. Scot Leven Brown holds the world record for the longest distance rowed in 24 hours in an ocean rowing boat. He is well used to putting together the sponsorship required to attempt world records in a jaded, information-saturated world.

“When you are pitching an idea to a potential sponsor, you go naturally with what the sponsor wants to do. Another standard Atlantic crossing is not going to be media-worthy. Six hundred people have done this in a rowing boat. You have to be doing something credible – that there is good chance that you will be able to pull off – and unique to your sport.”

Brown and his 14-man crew set a world speed record in 2009, rowing the 3,000 miles from Gran Canaria to Barbados in 33 days, seven hours and 30 minutes. As that record was subsequently broken, he plans to get it back. “We hope to do it in under 30 days. That is the equivalent of the four-minute mile for our sport.”

And that, he says, is the kind of thing sponsors want to hear. “People at the cutting edge of a sport naturally think about higher, faster, bigger, smaller, and these are all selling points. If a bunch of people are just crossing the Atlantic for a blast, well it’s hard to see what’s in that for a sponsor. And you can’t do it without one, unless you are a millionaire.”

But with higher and faster comes another factor: danger. Red Bull has lost five sponsored athletes over the last decade. Shane McConkey plunged to his death while base jumping in 2009. The most recent casualty was Antoine Montant, a French paraglider who died while base jumping in the Alps last October.

Alan Hamilton thinks that Red Bull, with its painstakingly nurtured devil-may-care attitude is the only brand that could get away with a fatality without seriously damaging its reputation. He was involved with the Bass brewery’s sponsorship of Kenneth Kerr’s single-handed crossing of the Atlantic in his rowing boat, Bass Conquerer, in 1979. Kerr disappeared on the return leg of the journey. “Bass said never again,” Hamilton recalls. “They would not touch dangerous sports – motor racing, boxing – after that.”

For Brown, there are avoidable risks and then there is weather. “You have to be very careful,” he says. “If what you do is without risk, it becomes mundane. If it becomes silly, it’s regarded as such.

“Before my first voyage I made a list of all the things that could happen, from hurricanes to sharks. I ran through them all and worked out what I needed to cope with them.”

It is a conversation he has with every potential sponsor. “I always identify the worst case scenario. By talking about it, it reassures the sponsor that you have done everything possible to avoid it. If it does happen, it’s not about prevention, it’s a matter of dealing with it. In a sport like ours, risk is a part of sponsorship.”

These days, Scottish long-distance cyclist Mark Beaumont funds expeditions by turning them into TV shows. At the start of his career, however, he went round with the begging bowl and did not enjoy the experience. “It is relatively easy to get kit sponsors, but you can’t live on kit. Cash sponsors are incredibly hard to get. Before I had a world record and media profile,” he recalls, “I was just another guy asking for money.”

For Beaumont, working with the BBC removes the need to dance to a commercial sponsor’s tune. “When the BBC backs an expedition they want the same thing as I do, to tell the story.”

Could there be a hint that Baumgartner is wearying of the corporate machine? Having landed on his feet in the Roswell desert, after the fastest descent ever made by a human being, he announced he was ready for a quieter life. “I’m retired from the daredevil business,” he told the assembled press pack. “I want to find a nice decent job as a helicopter pilot. I’ll fight fires and rescue people.”

That would provide more than enough adrenaline for most people. For the rest of us there is always Nitro Circus, motocross rider Travis Pastrana’s stunt extravaganza, coming to the UK for the first time in December. Sponsored by Red Bull.