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Impending tariffs could have far-reaching effects on professional sports leagues and the sports industry. The sports sector, usually able to insulate itself from political fluctuations, is finding itself in a similar boat as automakers and liquor producers in the face of President Trump’s tariffs.
“I expect all professional sports leagues and sports companies to keep an eye on how tariffs impact their businesses moving forward because while sports leagues and franchises have historically been stable assets with predictable revenue patterns, at the end of the day, their businesses are still impacted by activity in the global economy,” Sports Report host Joe Pompliano explained on the podcast (see video above or listen below).
The US has imposed a 25% tariff on all steel and aluminum imports and some goods from Canada and Mexico, as well as an additional 20% tariff on Chinese imports. President Trump has issued other tariff threats as well, including a significant reciprocal tariff proposal scheduled to take effect on April 2.
Pompliano explained how these measures are impacting various sports industries, with golf especially vulnerable.
“Golf equipment company Topgolf Callaway Brands, which uses parts from China for some of its products, is anticipating a $5 million headwind on its EBITDA this year,” Pompliano shared as an example. “Additionally, Amer Sports, owner of Wilson Sporting Goods, generates 11% of its revenue via goods like balls and rackets from China. So tariffs on Chinese goods equate to $112 million of the company's $5.1 billion in sales.”
Though these sales impacts may seem relatively minor, they represent a surprising hit to an industry and sport Trump holds dear.
Year to date, Topgolf Callaway stock (MODG) is down 12%, while Amer (AS) stock has fallen 3%.
Sports fans who attend live events may also find themselves paying even more at the concession stand, adding to the already inflated prices many pay.
“Stadiums said in February that tariffs on supplies from Canada, Mexico, and China would apply to about $56 million in total sales, about three-tenths of 1%,” Pompliano said.
Read more: What Trump's tariffs mean for the economy and your wallet
Though a large part of Trump's tariffs on Canada were delayed, should they go into effect, hockey fans could see some impact.
“25% of the league's revenue is driven by Canadian teams, and if Canadian tariffs reduce the value of the Canadian dollar compared to the US dollar, the league's Canadian-related businesses could feel some pain,” Pompliano continued, noting that all NHL players are paid in US dollars. “This means a weak Canadian dollar could have a material impact on the league's deals with Canadian entities.”
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