As Trump’s Tariffs Rock The Market, Sports Team Owners Have Nothing To Fear

Forbes

The president’s erratic policies are raising concerns the economy might be headed for a downturn, but history suggests that franchise values will continue to climb regardless.  Read the full story on Forbes: https://www.forbes.com/sites/justinbirnbaum/2025/05/10/as-trumps-tariffs-rock-the-market-sports-team-owners-have-nothing-to-fear/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Today on Forbes, as Trump's tariffs rock the market, sports team owners have nothing

00:05to fear.

00:08When the Boston Red Sox took the field for a belated opening day in 2020, there were

00:12no fans cheering in the stands, or lined up at the concession stands, or browsing the

00:17team's shop.

00:19The streets around Fenway Park, usually bustling in July, had become a ghost town.

00:25That was the norm in Major League Baseball and countless other sports leagues around

00:29the globe, as the COVID-19 pandemic emptied stadiums, canceled games, and otherwise decimated

00:35teams' profit and loss statements.

00:38The Red Sox, who had generated $519 million in revenue in 2019, saw that mark plummet nearly

00:4571 percent to $152 million, while the MLB average dipped to $122 million from $346 million, according

00:55to Forbes estimates.

00:57The decline didn't extend to team values, however.

01:01MLB franchises appreciated 3 percent on average from 2020 to 2021, to an estimated $1.9 billion,

01:09and climbed another 9 percent a year later, to $2.1 billion.

01:14The Red Sox did even better, jumping 5 percent, and then 13 percent, to land at $3.9 billion

01:20in 2022.

01:23The team is now worth an estimated $4.8 billion, the third-best mark in baseball.

01:29Tom Werner, the billionaire chairman of Fenway Sports Group, which owns the Red Sox, the NHL's

01:34Pittsburgh Penguins, and the Premier League's Liverpool FC, says, quote,

01:38That patience is about to be tested again, with investors from all walks facing another year

01:44of uncertainty prompted by President Donald Trump's heavy-handed tariff policies.

01:48As of early May, the S&P 500 index had dropped 4 percent so far in 2025, and was down 15 percent,

01:53before a recent rebound spurred by Trump pausing most of the tariffs.

01:56JPMorgan economists say there is a 60 percent chance the U.S. enters a recession with net

01:58even better, and the boomer-parrant, and the other inflation does not impact the inflation

02:01caster's explain the risk of the future and the country's number one.

02:02It was very severe, but this is a huge fact that if the customer could be unhealthy with

02:04a Brent, the S&P 500 index, the US economy is determined by an economic economic economic economic

02:06economy.

02:07As of early May, the S&P 500 index had dropped 4 percent so far in 2025, and was down 15 percent

02:12of years ago, and was down 15 percent before a recent rebound spurred by Trump pausing most

02:20of the tariffs.

02:21is a 60% chance the U.S. enters a recession this year, while Goldman Sachs figures the odds are

02:26close to a coin flip at 45%. Again, though, Werner and his fellow sports owners are better

02:33positioned than almost anyone to weather the storm. For decades, team values in the four major

02:39North American leagues have tended to remain flat or even rise a bit during broader economic

02:45downturns. Team values in the four major leagues have increased roughly 2,000% on average since

02:521998, when Forbes started valuing sports franchises, more than double the S&P 500's growth over

02:58the same period. Despite the economic turmoil caused by the 9-11 terrorist attacks, teams

03:04appreciated 20% from 2000 to 2002. They then inched up 7% from 2007 to 2008 and held steady

03:13in 2009, shaking off the volatility of the subprime mortgage crisis. And the trend goes back even

03:20further than Forbes' numbers. The Ross Arctos Sports Franchise Index, a gauge of team value

03:26growth compiled by private investment firm Arctos and the University of Michigan's Ross School

03:31of Business, contains quarterly data from December 1960 to June 2024. Across those 255 entries, the

03:40index has declined a total of 39 times, and just 16 since 1976. Leagues and teams are able to insulate

03:49themselves from broader market plunges largely because of their long-term contracts covering

03:55media rights, sponsorships, and premium seating, which lock in a significant portion of their revenue

04:00years in advance. For example, NBA teams on average collected $45 million from luxury suites and other

04:08premium seating areas during the 2023-24 season, according to Forbes estimates, representing nearly

04:1512% of their total revenue. National media rights are an even larger slice of the pie, 35% in the NBA

04:22that season, $132 million per team, and a whopping 60% in the NFL in 2024, at $381 million, with football's

04:32national TV deals extending as far as 2033. Sports teams also benefit from factors not directly tied

04:40to their finances, starting with the fact that there are only 124 franchises across the four major

04:46leagues. Get a group of billionaires bidding against one another, and emotion might take over. In an email,

04:53Dallas Mavericks minority owner Mark Cuban notes, quote,

04:56Over the long-term, the scarcity and fun value will always be up and to the right.

05:03For full coverage, check out Justin Birnbaum and Hank Tucker's piece on Forbes.com.

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