Earlier this month, President Trump unveiled his long-awaited tariff plans. Despite a 90-day pause, economic uncertainty remains. The proposed tariffs—ranging from a 10% baseline to over 100%—would apply not only to all exports from certain countries, but also additionally to specific goods like lumber and steel.[1] While the long-term effects are unclear, it is worth examining how they might impact the world of sports. The sports industry touches many tariff-sensitive areas of the economy: consumer confidence, raw material procurement, sponsorship decisions, and merchandise ordering.
Traditionally, professional sports franchises are relatively insulated from economic volatility,.[2] Anchored by long-term arrangements and a predictable customer base, professional sports teams derive less of their revenue, and therefore value, from short-term economic factors.[3] Additionally, since most teams are privately owned, their market value is not directly dictated by the stock market and can better weather downturns. The exceptions to this rule: the Atlanta Braves, Formula 1, Manchester United, Madison Square Garden Sports, and TKO Group, are all publicly traded and have seen year-to-date performance which reflect the wider market downturn.[4]
Still, tariffs can impact team operations. If consumer discretionary income declines due to rising prices, fans may be less likely to spend at events.[5] For leagues such as MLS or the NHL, where ticket sales and concessions compose a large part of total revenue share, consumers cutting back on these purchases can have drastic impacts on revenue..[6]Leagues such as the NFL are more shielded from this economic shock, as a larger portion of its revenue comes from centralized, long term league negotiated revenue arrangements..[7]
Teams currently planning or building new stadiums face complex construction challenges because of the tariffs. In February, the existing tariff on aluminum and steel was extended. Now, the 25% rate on steel applies to both commodities.[8] With about a quarter of US steel being imported, these new tariffs could significantly raise costs during stadium construction, at the most expensive phase of the construction process.[9] As stadium construction costs trend upward and with several leagues experiencing construction booms,[10] steel price increases could cause construction delays, pauses, or cancellations, all when budgets are most sensitive.[11]
Tariffs could also impact other operational areas. Sponsors in heavily impacted industries could reconsider the value of existing deals, particularly if profits are negatively impacted by any supply chain issues.[12] In licensed merchandise, the dominance of a few global brands—Nike, Addidas, Puma, and Under Armor—whose manufacturing operations are predominately outside the United States, mean that any supply chain cost increases could potentially be passed onto the consumer.[13]
The resiliency of sports teams to withstand economic pressures will be tested as a new global tariff landscape takes shape. Once thought to be isolated from macroeconomic pressures, sports teams now find themselves at an economic inflection point. Consumer confidence, infrastructure planning, sponsorship deals, and merchandising are all critical operational functions, and are all vulnerable to negative economic impacts of tariffs.
[1] See Michael J. Lowell et al., Trump 2.0 Tariff Tracker, Reed Smith (Apr. 14, 2025), https://www.tradecomplianceresourcehub.com/2025/04/18/trump-2-0-tariff-tracker/.
[2] Brendan Coffey, Arctos Tops $11 Billion in Sports Assets, Doesn’t Fear Tariffs, Sportico (Apr. 16, 2025), https://www.sportico.com/business/finance/2025/arctos-tariffs-sports-teams-1234848563/.
[3] Id.
[4] Id.
[5] See Samuel Agini & James Fontanella-Khan, Sports Sector Can Cope with Donald Trump’s Tariffs, Says AC Milan Owner, Financial Times (Apr. 13, 2025), https://www.ft.com/content/b52c48c6-bfe0-4050-bd4b-a6af8233c8f3.
[6] Kurt Badenhausen, How Sports Teams, Leagues and Owners Make Money, Sportico (Feb. 16, 2024), https://www.sportico.com/feature/how-sports-teams-leagues-make-money-1234766931/.
[7] Id.
[8] See Katrina Bishop, Trump’s 25% Tariffs on Steel and Aluminum Imports Take Effect, Europe Retaliates, CNBC (Mar. 21, 2025), https://www.cnbc.com/2025/03/12/trumps-25percent-tariffs-on-steel-and-aluminum-imports-take-effect.html.
[9] Susan Lingeswaran, Deal Focus: How Trump’s Tariffs Could Affect Sport, Sportcal (Apr. 10, 2025), https://www.sportcal.com/sponsorship/deal-focus-how-trumps-tariffs-could-affect-sport/?cf-view.
[10] See Timothy Allaire, Are Stadium Cost Overruns the New Normal in the NFL?, UB Law Sports & Entertainment Forum (Apr. 8, 2025), https://ublawsportsforum.com/2025/04/08/are-stadium-cost-overruns-the-new-normal-in-the-nfl/.
[11] Lingeswaran, supra, note 9.
[12] Id.
[13] See id.
Photo Credit – https://climatetrace.org/news/how-msc-became-the-worlds-largest-container-shipping-company.
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