LVMH has the football world all tied up
Select language to see a machine translation of this article. The original language of the Article is English and the translation is provided for your convenience.

LVMH has the football world all tied up

With the FIFA World Cup fast approaching, few topics are hotter than football. That interest goes beyond the pitch and the bars where the game is watched and into the business media, as the sponsorship battle between Nike and Adidas plays out. However, there is another name in football sponsorship that cannot be ignored: luxury titan LVMH. Between its TAG Heuer and Hublot brands, the company has become watchmaker of choice for the beautiful game.

LVMH’s share price has risen by 25% so far this year

graph 1306 lvmh

SOURCE: Yahoo Finance

It’s no secret why LVMH and other luxury brands would court the football world. According to FIFA (the world governing body), 3.2 billion television viewers watched the last world cup (2014), and a billion of them watched the final. Football (or “soccer” as it’s known in many countries) is the world’s most popular sport by an enormous margin – it has 3.5 billion fans around the globe. The next most popular (cricket) has 2.5 billion.

The World Cup is the biggest football event of the year, and rakes in revenues that any company would be foolish to pass on sharing. In 2014 (Brazil) it bought in €4.9 billion; in 2010 (South Africa) it bought in €4.2 billion. Soon, we’ll see how much it can bring in this year (Russia). Nor is the World Cup everything –worldwide, football is €400 billion industry. That’s comparable with the economies of some developed nations.

Jean-Claude Biver, the president of LVMH’s watch segment and CEO of TAG Heuer, has his own opinion on why football is worth paying attention to. Following a sponsorship deal with the French League, he told French magazine Paris Match: “Football spans every generation, every social class. It’s a fabulous medium for the values we share with this sport: passion, team spirit, emotion and determination.”

Between TAG Heuer and Hublot, Biver says that LVMH “had the game covered”. He’s not wrong: the brands can be seen everywhere – on legends (Pelé and Maradona) on rising stars (Hummels and Shinji) on world-class coaches (Mourinho and Lippi), and more. It’s inked sponsorship deals with major professional leagues (England, France, Germany, China, and more), and even made “the official FIFA timepiece.”

Having effectively crowded almost every other big watchmaker out of the space, LVMH is in the perfect position to win a World Cup all of its own.

Disclosure

Dominion holds LVMH in its Global Trends Luxury Fund.


If you would you like to receive the Newsfeeds daily, please click here to sign up now!

Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
5.0/5 rating 1 vote

Disclaimer
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.