Leipzig tried to sign the 19-year-old striker from their fellow Red Bull-owned club but could not afford to compete with their domestic rivals
Leipzig were among the contenders to sign the 19-year-old striker from Red Bull Salzburg, but he opted to join Dortmund in January.
Nagelsmann had talks with the Norway international before he made the move, but was unable to convince him to snub the advances of Lucien Favre’s side.
Haaland has maintained his incredible form since moving to Germany and made history again on Tuesday when he scored both of Dortmund’s goals in the 2-1 win over Paris Saint-Germain in the Champions League.
Leipzig did manage to beat several top European sides to the January signing of Dani Olmo from Dinamo Zagreb, however, and they are sitting just one point behind Bayern in the Bundesliga.
But Nagelsmann feels their failure to lure teen sensation Haaland shows they still have a lot of ground to make up.
“We couldn’t keep up [with other clubs],” the RB Leipzig boss told Goal & DAZN of the club’s interest.
“I totally respect and accept that we cannot overturn our salary structure for a player. At Hoffenheim I experienced that in an even much more extreme way.
“We have to grow healthily, that’s the crucial point. The example of Dani Olmo shows that we can make some transfers that other clubs cannot do.
“But financially, we’re still miles away from Bayern and Dortmund. In the next step, we have to reach the Champions League with conviction every year.
“And above all, we must not make the mistake that other clubs have made more often in the past. That is, living above your means for a year and then falling the next year – then everything collapses.
“Bayern and Dortmund are global players, but we are a very young club. Of course, we cannot keep up with clubs that have been on the market for decades.”
Leipzig are looking to progress to the quarter-finals of the Champions League by beating Tottenham in their last-16 tie.
The two sides meet in the first leg on Wednesday night and the 32-year-old expects a tight match.
“We will try to put our style on the field against Tottenham. We will not stay back and hope for the best,” he said. “We don’t see ourselves as worse than Tottenham.
“Spurs may have a slight advantage in terms of individual player quality, but they haven’t made the most stable impression this season either.
“We have a chance to progress. Our boys will be eager to reach the quarter-finals.
“I don’t think there is an outright favorite. It is a 50:50 duel that will depend on the daily form twice. It will also be important for us that we do not consider the first leg in isolation.
“Of course, the first leg result has a big impact on the second leg, but we have to think carefully about how we want to tackle both games beforehand.”