LVMH new sponsor of the 2024 Olympic Games in Paris?
Paris – The Paris Olympics are approaching and the organizers still lack a first-class sponsor, a priori LVMH, with whom negotiations are reaching, especially because of the desire of the luxury group to benefit from a wider exposure, AFP learned from sources close to the negotiations.
Almost a year and a half away from the event, there is not much missing for the organizing committee (Cojo) to manage to complete the sponsorship part set at more than 1.2 billion euros, that is, almost a third of its budget (about 4.4 billion euros ), recently revised upwards of 400 million euros – including 127 million for sponsorship.
But this step seems to be higher than expected. With almost 80 percent of the sponsorship budget reached by the end of 2022 according to Cojo, the arrival of a final sponsor, known as a Tier 1 partner (after BPCE, Sanofi, EDF, Orange and Carrefour), is the ticket upon entry is estimated. between 100 and 150 million euros, will relieve a lot of people. The audit committee of Cojo, led by Jacques Lambert, even qualified this summer as “imperative necessity” this coming signature.
“That takes time”
But the candidate tipped for months, world No.1 luxury LVMH, doesn’t appear to be in a hurry. “We are discussing, and that takes time”, agreed to say one of the members of Cojo, “discussions, which is most normal for such a transaction”, according to him. Except that some still point to an abnormal length of these negotiations.
The most awaited of the Olympic world, especially in the current economic climate, the group led by Bernard Arnault, which achieved 64 billion euros in turnover, is in a position of strength. And he’s obviously trying to push his advantage as far as possible.
“They have been talking for several months directly with the IOC. They want to activate their rights outside of France, which is normally not allowed for a local sponsor”, assured AFP a source close to the Olympic movement . “Discussions are suddenly more complicated,” this source continued.
When a sponsor joins an Olympic Organizing Committee, it can only activate its marketing rights, that is, benefit from exposure, at the local level, in the country hosting the event. The IOC already has around fifteen top sponsors, who have the possibility to activate their rights anywhere in the world.
But the world’s number one luxury brand generates more than 90 percent of its turnover overseas. “The French market is not a priority for LVMH”, explained a source close to the economic environment of luxury. “When you are an international group like LVMH, it is difficult to find your interest only in the French market”.
“Strategically, Paris is not the most important for LVMH, they are aiming a little more at Los Angeles in 2028. The American market is something important for them, as well as Asia”, added the source this.
Also go to LA
The prospect of the Olympics on American soil in 2028, in Los Angeles, appears to be a significant opportunity for the French group, as well as the exposure that the Paris Olympics will allow expected of almost four billion viewers.
A double advantage that, according to a political source, may also have given rise to the idea, at LVMH, of combining the IOC’s top sponsors for a long time. “It may be of interest”, studies a source close to economic circles, “they have a way in any case”.
Contacted by AFP, neither the luxury group nor the IOC wanted to comment. The very wide range of LVMH’s activities (fashion, cosmetics, jewelry, wine and spirits, etc.) however constitutes a difficulty in granting exemption from the activation of its marketing rights abroad for the Olympic Games in Paris. The French group could find itself in conflict, or in any case in markets already occupied by “top sponsors” of the IOC such as Omega or Coca-Cola for example.
“What is blocking is not necessarily the concern for rights abroad”, the nuances of a source close to the Olympic mysteries, “LVMH will seek to do something in Paris that is not among the specification of the IOC , and thus it is debatable”. (AFP)