To tariff or not to tariff, that has been the question on both sides of the pond recently. President Donald Trump’s sweeping tariff plan is stuck in the courts but the rest of the world is reeling from the uncertainty.
That is, except for sports.
City AM reported this week that sports valuations are steady amid market turmoil elsewhere, and changes to tariff plans this week has only strengthened that position.
“If consumers cut back on spending, which they’re starting to do, what impact will that have on ticket sales, merchandising and media rights. It is too soon to tell,” David Sunkin of major US firm Sheppard Mullin told City AM this week.
“But we are not seeing any slowdown in sports deal making, those deals will continue at the same velocity.
“Certainly you’re not going to see values go down. I still think you’re going to see above market returns, and the tariffs are to be determined. We’ll see what sticks and what doesn’t stick.”
Sport shrugging off tariff volatility
Lale Akoner, global market analyst for eToro, adds that sports franchises “have largely shrugged off market volatility, and for a good reason”, insisting “revenues flow from media rights, sponsorships and live events, which are sheltered from tariff skirmishes that affect goods-based industries”.
A number of market sectors have been hit by tariff turmoil, despite the current pause in place. The United Kingdom is set to sign a deal with the United States that will cut a number of the proposed tariffs out of the picture, but that deal is not signed yet and end-point tariffs could still be higher than they were in the pre-Trump era.
Akoner therefore says “resilience is not immunity” citing that a potential recession somewhere as a result of the tariffs could end up hitting sport.
“Debt adds another pressure point with many clubs, especially private-equity-owned, sitting on hefty leverage, leaving margins hostage to borrowing costs. If interest-rate cuts arrive in late-2025, cheaper financing could soften the blow and restart deal flow just as demand risks rise,” she added.
“Legal and policy clouds also loom. While tariffs rarely touch sports, globally oriented franchises still face exposure. Scarcity, too, is tier-dependent. Top-league franchises deserve their premium, but lower-tier clubs lack pricing power and feel demand shocks first.”
Hello tax man
But something else Trump is doing, which has been criticised by Elon Musk, amongst others, is his Big Beautiful Bill on tax. It includes some sports specific legislation that could impact the wealthy families that have long owned major franchises in the States, potentially pushing them towards Europe.
“It’s funny, there seems to be a lot of attention not so much on the tariff impact but on what Trump calls the Big Beautiful Bill,” Sunkin adds. “Because there’s some sports-directed legislation with respect to the tax treatment of intangible assets [in there] so there’s been a lot of conversation about what that will do to sports deal making and valuations.
“[The bill is] reducing the value of the intangibles that can be depreciated from 100 per cent – you can depreciate and intangibles make up the lion’s share of a team’s value. You’re talking IP, media rights, goodwill and player contracts.
“Historically, you’re able to write that off 100 per cent over 15 years primarily. And Trump is saying for sports teams, he wants that to come to 50 per cent. I think people will look at that because it provides tremendous tax benefits for wealthy families that own these teams.”
And there’s something that sport has that steel, aluminium and agriculture struggles to garner, an inherent love.
Concludes Sunkin: “There’s that adage that when times are tough, people need escapes, and sports, historically, has always provided that. It’s very expensive to go see live sports, but it’s been very expensive for a long time, and the games and people will still sit around and watch and listen and stream. I would be surprised if tariffs and tax had a marked impact.”
