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

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. W hen the Boston Red Sox took the field for a belated Opening Day in 2020, there were no fans cheering in the stands, or lined up at the concession stands, or browsing the team shop. The streets around Fenway Park, usually bustling in July, had become a ghost town. That was the norm in Major League Baseball—and countless other sports leagues around the globe—as the Covid-19 pandemic emptied stadiums, canceled games and otherwise decimated teams’ profit-and-loss statements. The Red Sox, who had generated $519 million in revenue in 2019, saw that mark plummet nearly 71%, to $152 million, while the MLB average dipped to $122 million, from $346 million, according to Forbes estimates. The decline didn’t extend to team values, however. MLB franchises appreciated 3% on average from 2020 to 2021, to an estimated $1.9 billion, and climbed another 9% a year later, to $2.1 billion. The Red Sox did even better, jumping 5% and then 13% to land at $3.9 billion in 2022. The team is now worth an estimated $4.8 billion, the third-best mark in baseball. “If you look at 2008 or during Covid in 2020, you had to fasten your seatbelt and know that in the short run you’re going to take a financial hit,” says Tom Werner, the billionaire chairman of Fenway Sports Group, which owns the Red Sox, the NHL’s Pittsburgh Penguins and the Premier League’s Liverpool FC. “But that’s part of being an investor, right? Everything took a financial hit during Covid, and you just have to ride it out and be patient.” That patience is about to be tested again, with investors from all walks facing another year of uncertainty prompted by President Donald Trump’s heavy-handed tariff policies. The S&P 500 index has dropped 4% so far in 2025, and was down 15% before a recent rebound spurred by Trump pausing most of the tariffs. JPMorgan economists say there is a 60% chance the U.S. enters a recession this year while Goldman Sachs figures the odds are close to a coin flip at 45%. Again, though, Werner and his fellow sports owners are better positioned than almost anyone to weather the storm. For decades, team values in the four major North American leagues have tended to remain flat, or even rise a bit, during broader economic downturns. Werner, who may have to grapple with tariffs in his day job as a television producer after Trump threatened this week to target films produced abroad, rejects the notion that sports franchises are “recession proof”—a phrase that has often been attached to the industry. For one thing, at least during the Covid pandemic, owners had to cover skyrocketing operating losses. (The Red Sox, for instance, saw their earnings before interest, taxes, depreciation and amortization dive an estimated $70 million into the red in 2020, from $89 million in the black the year prior.) At the same time, however, team values in the four major leagues have increased roughly 2,000% on average since 1998, when Forbes started valuing sports franchises, more than double the S&P 500’s growth over the same period. Despite the economic turmoil caused by the 9/11 terrorist attacks, teams appreciated 20% from 2000 to 2002. They then inched up 7% from 2007 to 2008 and held steady in 2009, shaking off the volatility of the subprime mortgage crisis. And the trend goes back even further than Forbes’ numbers. The Ross-Arctos Sports Franchise Index—a gauge of team value growth compiled by private investment firm Arctos and the University of Michigan’s Ross School of Business—contains quarterly data from December 1960 to June 2024. Across those 255 entries, the index has declined a total of 39 times, and just 16 since 1976. And over those last 48 years, the index has dropped in consecutive quarters only three times, and never for more than three straight quarters. Arctos also measures sports teams’ compound annual growth at 13% since 1960, significantly better than the S&P 500’s 7% over the same period. Leagues and teams are able to insulate themselves from broader market plunges largely because of their long-term contracts covering media rights, sponsorships and premium seating, which lock in a significant portion of their revenue years in advance. For example, NBA teams on average collected $45 million from luxury suites and other premium seating areas during the 2023-24 season, according to Forbes estimates, representing nearly 12% of their total revenue. National media rights are an even larger slice of the pie—35% in the NBA that season ($132 million per team) and a whopping 60% in the NFL in 2024 ($381 million), with football’s national TV deals extending as far as 2033. Sports teams also benefit from factors not directly tied to their finances, starting with the fact that there are only 124 franchises across the four major leagues. Get a group of billionaires bidding against one another, and emotion might take over. “Over the long term, the scarcity and fun value will always be up and to the right,” Dallas Mavericks minority owner Mark Cuban notes by email. There have occasionally been hiccups. In 2010, the NBA purchased the team now known as the New Orleans Pelicans (then the Hornets) for $318 million when George Shinn, who had owned the franchise since it began play in Charlotte in 1988, was facing money troubles. Coming out of the financial crisis, Shinn had been unable to find a suitable buyer. “What happens with tax policy, interest rates and the markets always impacts valuations,” Cuban says. “If rich people and [private equity] aren’t rich, they don’t buy.” Still, even in a distressed sale, Shinn collected nearly 10 times his initial $32.5 million investment. Meanwhile, the Pelicans, who are now owned by Gayle Benson, have since added another zero to their valuation: Forbes estimates the team is worth $3.05 billion. The main area where market conditions can ding franchises’ balance sheets is game-day operations, such as ticket, concession and merchandise sales. And while the U.S. economy doesn’t look as dire as it did during the bear markets of 2008, 2020 or 2022, Americans are beginning to tighten their pursestrings. Overall personal expenditures grew 1.8% in the first quarter, the slowest rate of growth in two years, as the gross domestic product shrank by 0.3%, the first quarterly decline in three years. Jobless claims are climbing, in part because of cuts implemented by Elon Musk’s Department of Government Efficiency, and the Conference Board’s consumer expectations index—measuring the perception of business conditions, employment prospects and future income over the next six months—is at its lowest level since 2011. Historically, however, that sort of gloom hasn’t stopped families from using some of their savings on trips to their favorite team’s ballpark or arena. “You need a distraction when we are in bad times, economic or otherwise,” says Marc Ganis, president of the consulting firm Sportscorp, who has worked with numerous team owners. “People need a distraction, and the primary distraction we have in our country is sports.” Or as Werner puts it, “obviously you need to have eggs on the table, but people I think are still going to go to their home games, and certainly they’re going to be watching on television.” Werner’s fan base has already shown incredible loyalty in similar circumstances: The Red Sox sold out every home game from 2003 to 2013—820 in a row—even with the financial crisis sandwiched in the middle. The FSG chairman is also quick to call out a more recent example, from the club’s Patriots Day game in April. “It’s one thing if Taylor Swift comes into your market once every two years—you can sell out 100,000 tickets,” Werner says. “The extraordinary thing about the Red Sox is that the game was on at 11 a.m., and 35,000 people figured out a way to get to Fenway Park. That’s really a testament to the relationship that this particular sports team has in New England.” More From Forbes Forbes Baseball’s Most Valuable Teams 2025 By Justin Teitelbaum Forbes How Modern Sports Arenas Make Millions More By Building Fewer Luxury Suites By Brett Knight Forbes The World’s Richest Sports Team Owners 2025 By Justin Birnbaum Forbes Anaheim Ducks Owner Henry Samueli Is Investing $1 Billion In City-Owned Arena By Matt Craig Source: https://www.forbes.com/sites/justinbirnbaum/2025/05/10/as-trumps-tariffs-rock-the-market-sports-team-owners-have-nothing-to-fear/