Although it's only January, it appears that the most valuable sponsorship deal of the year in the luxury watch sector has already been signed.
Tag Heuer was confirmed as Formula 1's official timekeeper earlier this month as part of a multi-brand deal between the sport's owner Liberty Media and LVMH Group, the $323 billion French luxury conglomerate. euros. First announced in October, the deal would be valued at $1 billion over ten years. It also includes Tag Heuer's parent brands Louis Vuitton and LVMH's wine and spirits division Moët Hennessy.
By becoming the official timekeeper of F1, Tag Heuer takes the place of Rolex, which had held this role for more than ten years. It is estimated that Rolex paid more than $50 million for its rights last year, although this sum has not been confirmed by the brand.
Tag Heuer is expected to cover the majority of the costs. Antoine Pin, the brand's new CEO, who joined the company last September and was not involved in the negotiations, said: “We can't imagine that the Formula 1 organization would agree to invest less than what they had before. This is our biggest investment in communications.”
If the deal exceeds $50 million per year, it would represent a significant gamble for Tag Heuer. LVMH's watches and jewelry division, which also includes Bvlgari, Hublot, Tiffany and Zenith, recorded revenues of 10.9 billion euros in its latest balance sheet at the end of 2023, but does not break down performance by brand. According to estimates from Morgan Stanley, Tag Heuer's revenue fell to 615 million Swiss francs ($675 million) that same year, down from 729 million Swiss francs in 2022.
However, Pin expects high returns. “It’s a huge deal for us,” he says. “This is not only a major opportunity, it means we are part of a league of brands that can afford to buy at this level and take advantage of such an important platform. If we don’t see additional sales from Formula 1, then it’s not right.”
The so-called Billion Swiss Franc Club — an elite group of Swiss watch companies with revenues exceeding that figure — could be one of Tag Heuer's targets, but Pin puts that prospect into perspective. “Reaching one billion Swiss francs is not a goal in itself,” he explains. “It’s a consequence. Of course, it’s a nice target, but what it represents is more important: that Tag Heuer is an essential watch.”
The deal with LVMH comes at a time when global interest in F1 is growing sharply, driven in part by the international success of the Netflix documentary series “Drive to Survive,” which is set to begin its seventh season this spring.
According to a Nielsen Sports report published last month, F1 is now the most followed sporting competition in the world. By 2024, its global television audience will reach 1.5 billion people. Additionally, since 2021, the number of overall fans has increased by 5.7% to 750 million, or approximately 50 million more. Nielsen also found that one in three fans are under the age of 35 and 41% of all fans are women.
As a result, brands are competing to claim high-profile sponsorships. The average size of F1's top ten sponsorship deals increased by 64% between 2019 and 2025, from $23 million to $38 million, according to Nielsen. Likewise, the average value of team sponsorship deals more than doubled during this period.
“Formula 1 has done an outstanding job of strengthening its image and increasing its revenues over the last five years,” says Andy Milnes, head of Nielsen Sports UK and Ireland. Milnes specifies that Tag Heuer's announcement has particular significance. “The deal to become the official timekeeper of F1 takes on an added dimension as it replaces a direct competitor, Rolex – arguably one of the most prestigious brands in the world.”
Formula 1 represents fertile ground for Tag Heuer. It was the first Swiss watch company to enter the sport in the late 1960s and has been associated with it ever since. In recent years, it has sponsored the Oracle Red Bull Racing F1 team, collaborated with F1 world champion Max Verstappen and been the official watch partner of the Monaco Grand Prix — the most prestigious stop on a calendar now composed of 24 races. Pin says these partnerships will remain in place.
A less favorable aspect, according to some analysts, is that this agreement was not reached earlier. “It's a smart strategy from Tag Heuer and LVMH,” says Edoardo Martorelli, executive director of Drive Sports Marketing, a company active in F1 sponsorship. “But it would have been even better if they had signed him three or four years ago, when the value of the sport was 30 to 40 percent lower than it is today.”
-What impact will F1 have on Tag Heuer? In 2013, when Rolex made its surprise entry into F1, some analysts saw it as a defensive measure against the rise of Omega, particularly after its successful sponsorship of the 2012 London Olympics, which sparked renewed interest in its products. However, the gap between the two companies has widened again, with Rolex's revenue now estimated by Morgan Stanley to be almost four times that of Tag Heuer.
“Rolex locked the Formula 1 contract to avoid being trapped and to maintain its leading position in the sector,” explains David Sadigh, CEO of Digital Luxury Group based in Geneva. “The hundred million dollar question is whether this deal will play a similar role for Tag Heuer.”
Sadigh points out that F1 offers luxury brands a unique opportunity. “The only platform that can rival Formula 1 in terms of reach and emotion is the Olympic Games, but that only happens once every four years,” he says. “Football is interesting in some countries, but the demographics are not the same.”
LVMH is already present in football — Hublot sponsors the FIFA World Cup and the English Premier League. It was also reported that it paid 150 million euros to be the premium sponsor of the last Olympic Games in Paris. In addition, its Tiffany jewelry brand produces trophies for the Super Bowl, the NFL's flagship event.
Sadigh also highlights the importance of social media, noting that F1 has three ecosystems that work together: the sport, the teams and the drivers. According to a study by DLG, the 32.3 million fans of the official F1 Instagram are dwarfed by the 79.7 million who follow the ten F1 teams and the 129 million who follow the drivers. Seven-time world champion Lewis Hamilton alone has 38.5 million followers on Instagram.
In recent years, F1 races have also transformed into celebrity parades, featuring the likes of Brad Pitt, Tom Cruise, Shakira and Tag Heuer brand ambassador Patrick Dempsey. “It's all about mixing and matching celebrities to maximize reach on social media,” Sadigh adds.
Formula 1 also provides crucial access to the American and Chinese watch markets, where the sport's popularity has grown rapidly. “Tag Heuer is underexploited in China, where Longines is the prince and Rolex the king,” explains Sadigh. “As for Tudor, it is enjoying great success in the United States, the largest market for Tag Heuer.”
“The agreement with Formula 1 is completely logical because, instead of focusing on the NFL or the NBA, we use the weight and influence of the group [LVMH] to conclude a global partnership. In this way, Tag Heuer will be visible both in mature markets, such as the United States and Europe, and in emerging markets, such as Mexico. We can expect growing interest in Tag Heuer in the years to come.”
Martorelli agrees. “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 points out. “Tag Heuer lacked exposure, but that will change with this deal.”
Will this visibility translate into sales? This week, Tag Heuer introduced additions to its Formula 1 watch collection, with prices starting from £4,100. So this might be out of reach for many new F1 fans. “Some people won't be able to afford Tag Heuer,” admits Pin. “But Formula 1 represents a platform not only to expose Tag Heuer to young consumers, but also to very wealthy customers.”
Pin expects this deal to increase the visibility and appeal of its brand. At its peak in the 1990s, when working with the McLaren team and Brazilian legend Ayrton Senna, Tag Heuer was one of the most desirable brands in the world. “We need this,” Pin insists. “We should get chills when we talk about Tag Heuer.”
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