Trump’s tariffs will have a far-reaching impact on the sports industry

Trump’s proposed tariffs will have a far-reaching impact on professional sports leagues and the broader sports industry. Traditionally resilient to political shifts, the sector is now on alert, much like automotive and spirits producers.

The United States has already imposed a 25% tariff on steel and aluminum imports, a 20% tariff on certain goods from China, and some levies on Canadian and Mexican products. 

President Trump has also laid plans to reveal a more targeted reciprocal tariff plan, slated to take effect on April 2. 

Yahoo Finance’s Sports Report host Joe Pompliano expects all professional sports leagues and companies to track how these tariffs might shape their bottom lines. While teams and leagues are known for having dependable revenue streams, they are still tied to broader global economic activity.

Golf stands out as one of the most vulnerable segments. Topgolf Callaway Brands, for instance, uses Chinese parts for a portion of its inventory and is forecasting a $5 million hit to its EBITDA this year. 

Though these figures may appear small compared to overall earnings, they represent unexpected pressure in a domain President Trump holds dear. Meanwhile, Topgolf Callaway (ticker: MODG) has seen its shares fall 14% year to date, and Amer (AS) stock is down 3% over the same period.

Sports ticket prices are expected to increase

Fans heading to games might also feel the pinch. Increased concession costs could be on the way, following news that stadiums in February projected a total of $56 million in sales would face increased tariffs on supplies from Canada, Mexico, and China. That accounts for about 0.3% of overall stadium supply-related spending. Many sports spectators, already frustrated by rising ticket prices, may find themselves budgeting even more for basic refreshments.

According to Pompliano, Hockey enthusiasts could be affected next if delayed US tariffs on Canada go forward. A full 25% of the National Hockey League’s revenue is driven by its Canadian teams, all of which rely on the Canadian dollar. 

If Canada’s currency weakens in relation to the US dollar, those franchises’ financial obligations and the league’s agreements with Canadian entities could be negatively impacted. NHL players, who are paid in US dollars, may see changes to how their contracts interact with local finances.

Investors looking into athletic-wear stocks should remain cautious

Sports investors eyeing athletic-wear stocks should be cautious. Nike has spread its manufacturing across multiple regions, minimizing heavy dependence on China. Still, even Nike experiences some difficulty despite being a sports giant.

Nike’s shares fell more than 5% on Friday after the company said it anticipates fourth-quarter gross margins to drop by 400 to 500 basis points, partly because of newly implemented tariffs. These developments suggest that sports once thought to be protected from political and economic turmoil, are anything but immune to the current trade war.

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