LVMH is set to become the top sponsor for the Formula One car racing franchise as it continues its push into the sports world. The agreement is expected to begin in 2025, and last for a period of ten years. LVMH announced this on Wednesday. According to two sources familiar with the deal, it is worth less than €100mn per year.
The deal will include several of Bernard Arnault’s top luxury brands, including Louis Vuitton – the world’s largest luxury brand in terms of sales – Moet Hennessy, and Tag Heuer, a watchmaker. Frederic Arnault was the deal’s leader. He is the second-youngest of five children of LVMH billionaire patriarch, and was promoted at the beginning of the year to lead the watchmaking division.
He is a graduate from France’s top engineering college, Ecole Polytechnique. His father was also a graduate. “The opportunity to scale up our commercial arrangements is emblematic for the vision we have of Formula 1 as it continues to grow. . . “We look forward to working together with Bernard and Frederic Arnault over the coming years,” said Greg Maffei.
In order to increase their popularity and audience, luxury groups are increasingly focusing on sports. Luxury has traditionally been associated with sports of elite level, such as tennis and show jumping. However, more and more luxury groups are focusing on mainstream sports such as basketball and football.
The French group has stepped up its involvement in racing after a high-profile sponsorship of the Paris Olympics where Moet Hennessy was served at the bars and Chaumet, LVMH’s jeweller, made medals for the athletes.
The opening ceremony featured a sequence that centered around Louis Vuitton monogrammed trunks. Sponsors were pushed into previously non-advertised areas of the global sporting event.
Earlier this summer, LVMH released a new Louis Vuitton ad featuring tennis stars Roger Federer & Rafael Nadal hiking the Italian Dolomites. This was the new version of a campaign from 2022 featuring footballers Cristiano Cristiano and Lionel Messi.
Formula One has spent years expanding into new markets, and attracting new audiences. Since US-based Liberty Media purchased it for $8bn, in 2017, the racing schedule has expanded to include flashy locations in Miami and Las Vegas. Netflix’s docuseries Drive to Survive also helped increase viewership.
In 2018, the share of female F1 enthusiasts was 32 percent. This has helped to attract sponsors who are focused on women. Charlotte Tilbury Cosmetics launched its first sport sponsorship with the F1 Academy earlier this year.
The five Arnault kids all have roles in the family-controlled LVMH. Except for Jean, all have seats in the board of the group. Frederic, a Tiffany executive, and Alexandre joined their siblings in the board this year.
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