By Dr Esraa Al-Shatti

The economic benefits of hosting the Olympics and major sporting events are well understood, so how does luxury interact with sporting events? One of the leading examples bringing focus to this issue today is the significant investment LVMH has committed to the upcoming 2024 Olympics: A jaw-dropping 150 million euros. This figure is already impressive, even for Bernard Arnault, one of the wealthiest people in the world.

This is a strategic plan, with the expectation that the amount will double, if not triple, under Arnault’s business acumen. LVMH investing 150 million euros in the 2024 Olympics is practically unheard of for the conglomerate.

Historically, LVMH has entered sponsorship activities at the brand level with Hublot for the 2022 World Cup, for example. However, this is its first corporate-wide agreement at this scale. Such sponsorship is bound to further strengthen and enhance the visibility and prestige of the LVMH brand globally, in perfect accord with strategic objectives.

Since the Olympics would have an estimated global viewership of over 4 billion, LVMH could capitalize on such visibility. More exposure would be critical for strengthening its luxury brand image further and on a platform where practically all people of high social standing would be watching.

The sponsorship deal brings about tax benefits since expenses for such a purpose are deducted from the tax base. This financial aspect adds another layer to its strategic advantage as an investment.

So, whereas LVMH in the past has been a great investor in several sectors and brands, this 150 million-euro networking deal for the 2024 Olympics becomes the first of its kind in terms of this scale and scope inside the group. This not only shows the crossing roads of luxury and sports but displays the strategic foresight characteristic of LVMH to be at the top amidst the global groups of luxury.