F1 chord: tag heuer on the way to the luxury watchmaker

Although it is only January, it would already seem that the most precious sponsorship contract in the world of luxury watches this year is on the verge of being finalized.

TAG Heuer was appointed as the official timemaker of Formula 1 earlier this month, as part of a multi-march agreement between Liberty Media, owner of the sport, and the LVMH group, parent company of Tag Heuer, evaluated at 323 billion euros. Announced for the first time in October, this contract is estimated at around 1 billion dollars over the next ten years. It also includes the sisters of Tag Heuer, Louis Vuitton, as well as Moët Hennessy, the LVMH wines and spirits sector.

By becoming official timer of F1, Tag Heuer recovers the crown which previously belonged to Rolex for more than a decade. It is estimated that Rolex spent more than $ 50 million for these rights last year, a sum that the company did not officially confirm.

Tag Heuer should therefore bear the majority of the costs of the operation. “We cannot imagine that the organization of Formula 1 accepts less investment than it received before,” says Antoine Pin, the new director general of Tag Heuer, in office since September and who did not participated in negotiations. “This is our biggest investment in communication. »»

If the contract is worth more than $ 50 million a year, it represents an important bet for Tag Heuer. The LVMH Watches and Jewelry Division, which also includes BVLGARI, Hublot, Tiffany and Zenith, recorded income of 10.9 billion euros during its last financial publication, but does not detail the performance by brand. According to estimates by Morgan Stanley, TAG Heuer's revenues fell to 615 million CHFs ($ 675 million) last year, compared to 729 million CHF in 2022.

However, Pin expects strong benefits. “This is a major issue for us,” he says. “It is not only an important opportunity, it is also a significant declaration: it means that we are part of the big brands league capable of making such an investment and taking advantage of a platform of this magnitude. If we cannot increase sales thanks to Formula 1, this would mean that there is a problem. »»

The club of the billion Swiss francs, a limited group of Swiss watch companies making revenues higher than this threshold, could be the objective of Tag Heuer, but Pin is prudent on this subject. “Achieving a billion Swiss francs is not an objective in itself,” he said. “This is a consequence. Of course, this is a beautiful target, but what it means and what it represents is more important: namely that Tag Heuer is an essential watch. »»

The agreement with LVMH comes at a time when world interest in F1 is increasing, partly thanks to the international success of the documentary on Netflix, Drive to Survivewhose seventh season is scheduled for spring.

According to a report published last month by Nielsen Sports, F1 is now the most followed sports series in the world. In 2024, she recorded a 1.5 billion global television audience, according to this report. Since 2021, the number of fans has increased by 5.7 % to 750 million, which represents an increase of around 50 million. Nielsen also found that a out of three fan under 35 and that 41 % of all fans are women.

Consequently, brands are in competition to obtain prestigious sponsorship contracts. The average size of the 10 main F1 sponsorship contracts has increased by 64 % since 2019, from 23 million to 38 million dollars for the 2025 season, according to Nielsen. The average value of team sponsorship contracts also more than doubled during the same period.

“Formula 1 has done exceptional work by building its image and generating income in the past five years,” said Andy Milnes, Nielsen Sports manager for the United Kingdom and Ireland. Milnes specifies that Tag Heuer's announcement is of particular importance. “Becoming the official timemaker of F1 represents an additional magnitude because it replaces a direct competitor, Rolex-perhaps one of the most prestigious brands in the world. »»

Formula 1 represents a fertile land for Tag Heuer. The brand was the first Swiss watch company to enter the world of F1 in the late 1960s and has been associated there since. In recent years, she has sponsored the Oracle Red Bull Racing team, collaborated with the world champion of F1 Max Verstappen, and has been an official partner of the Monaco race – the most prestigious stage of a calendar that now counts 24 races. Pin says these partnerships will remain in place.

However, analysts point out that one of its drawbacks lies in the fact that this agreement was not concluded earlier. “It is a judicious movement on the part of Tag Heuer and LVMH,” says Edoardo Martorelli, executive director of Drive Sports Marketing, who works in the field of F1 and assesses about 300 the number of brands involved in the sponsorship of F1. “But it would have been even better if they had signed three or four years earlier, when the value of the sport was 30 to 40 % of today. »»

What will be the impact of F1 for Tag Heuer? In 2013, when Rolex did what was perceived as a surprise entry into F1, analysts suggested that it was a defensive movement in the face of Omega boom after the success of its sponsorship of the games Olympics in London in 2012, which had aroused renewed interest in its products. However, the gap between the two companies has since dug, Rolex's revenues being estimated by Morgan Stanley as being almost four times higher than those of his nearest watch rival.

“Rolex has locked his agreement with F1 to avoid being trapped and ensuring the leader in his category,” explains David Sadigh, Managing Director of the Digital Marketing Agency based in Geneva, Digital Luxury Group (DLG ). “The question of $ 100 million is whether this agreement will do something similar for Tag Heuer. »»

Sadigh stresses that F1 offers luxury brands a unique opportunity. “The only platform that can compete with Formula 1 in terms of audience and emotion is the Olympic Games, but they only take place once every four years,” he said. “Football is quite interesting in some countries, but demography is not the same. »»

LVMH is already active in football, Hublot sponsoring the FIFA World Cup and the English Premier League. He would also have spent 150 million euros to be the premium sponsor of the Paris Olympic Games last year. In addition, his company Tiffany produces trophies for the flagship event of the NFL Super Bowl.

Sadigh also evokes the impact of social networks, noting that F1 has three ecosystems that work in synergy: sport, teams and pilots. According to DLG research, the 32.3 million subscribers of the official Instagram account of the F1 are overshadowed by the 79.7 million following the ten F1 teams and the 129 million following the pilots. The seven -time world champion Lewis Hamilton alone has 38.5 million subscribers on Instagram.

In recent years, F1 races have become podiums for celebrities, including Brad Pitt, Tom Cruise, Shakira and the ambassador of the Tag Heuer, Patrick Dempsey. “Everything is a matter of mixing and association, and it is a question of trying to attract celebrities that will maximize the scope on social networks,” explains Sadigh.

Formula 1 also offers a path to key watchmakers in the United States and China, where the popularity of sport has grown considerably. “Tag Heuer is under-exploited in China, where Longines is the prince against King Rolex,” adds Sadigh. “And Tudor was a real success in the United States, which is the largest market in Tag Heuer. »»

“The agreement with Formula 1 has a lot of sense, because instead of opting for the NFL or the NBA, you use the weight and influence of the group [LVMH] To sign a global contract. Thus, Tag Heuer will be visible in mature markets such as the United States and Europe as well as in emerging markets such as Mexico. We can expect a good traction for Tag Heuer in the years to come. »»

Martorelli shares this opinion. “As a sponsor of an F1 team, unless you are the main partner, all the media value you generate is based on the content you produce,” he said. “Tag has lacked exhibition, but it will change now. »»

Will this exhibition result in sales? This week, Tag Heuer launched additions to his collection of Formula 1 watches, with prices starting at 4,100 pounds Sterling. This could make the brand inaccessible for many young F1 fans. “Some will not be able to afford Tag Heuer,” admits Pin. “But Formula 1 is a platform to expose not only TAG Heuer to youth, but also to a rather wealthy clientele. »»

Pin hopes that this agreement will increase the visibility and the desire of its brand. At her peak in the 1990s, when she collaborated with the McLaren team and the Brazilian legend Ayrton Senna, Tag Heuer was one of the most desired brands in the world. “We need it,” said Pin. “You should have chills when you talk about Tag Heuer. »»