Olympics and concerts: the economic impact on big brands and financial companies

The summer of big concerts has just begun, the Olympics and Paralympics in Paris are only a few weeks away, and the European Football Cup will brighten our evenings in front of the big screens. This concentration of events will bring thousands of tourists around the world, making the organisers of sports events and stadium concerts happy. Added to this are the big European brands that will link their brands to these events with an important return in terms of image. Doing the maths on how much these events will weigh on the budgets of brands and financial companies is the investment firm Walter Scott of the BNY Investments group (85.9 billion dollars AUM), which has put on the podium the French luxury giant LVMH, which as premium sponsor "will control through all its brands almost all the advertising space during the Paris Olympics and Paralympics" and Amadeus IT "the travel management platform central to the operation of the tourism industry globally," write the analysts.

It is estimated that the Paris Olympics and Paralympics will be attended by 11 million viewers who will arrive in the French capital to watch the sporting events between July and August, 1.7 million of whom will reach the French capital from abroad. In addition to this, the global television audience is expected to reach peaks of 4 billion viewers. As premium sponsor, LVMH has secured control of almost all advertising space in Paris during July along with the group's brands: the jewellery house Chaumet, for example, will be responsible for the medals for the winners of the Olympic competitions; the wine house Moet Hennessey will be in charge of the drinks offered during the receptions; the make-up giant Sephora will be in charge of the Olympic torch. Finally, the luxury clothing brand Berluti, also part of the LVMH group, will sign the uniforms for the opening ceremony of the Olympic and Paralympic Games for the French teams.

Another sports brand par excellence is the German multinational Adidas. Although it is not an official Olympic sponsor, it nevertheless presented 41 new sports shoes for as many disciplines with a precise objective: to expand the number of sports to be represented in order to return to the group's sporting roots, as announced by the new CEO Bjørn Gulden when presenting the company's strategic plan. The market believes this and the share price has gained 23.8 per cent in one year.

Events such as the Olympics are not only an investment opportunity for sports-related brands: it is estimated that experiential sports tourism is worth around 10% of global tourism expenditure with projections showing this sector growing strongly. Benefiting from this trend is Spain's Amadeus IT, the travel management platform that airlines around the world rely on for ticketing. Its Air IT Solutions division allows airlines to outsource the management of airline ticket booking in addition to other functions, and in one year saw a 22% increase in turnover mainly due to the recovery of air travel after the pandemic. In line with the growth in air traffic was the Air Distribution division, which increased turnover by 24 per cent and booking volume by 14 per cent.

In addition to sports tourism, another area that Walter Scott's analysts expect to grow strongly is the music tourism market, i.e. attendance at large-scale concerts and the induced activity as fans spend not only on purchasing concert tickets but also on travel and especially on accommodation. Rewriting the history of stadium concerts is the American singer Taylor Swift for whom the term Swiftonomics was coined as a measure of the impact on the economy of her concerts that move thousands of fans from all over the world. So much so that the Washington-based American University has set up from next academic year a microeconomics course to analyse the economic phenomenon of her 'Eras Tour' concerts coming to Milan on 13 and 14 July.