Sport teams safe bets as valuations buck Trump tariff slump
Valuations of sports clubs have survived “recent market volatility stemming from President Donald Trump’s tariffs”, top analysts have said amid market turmoil as a result of decisions made in the White House.
Sports clubs have seen their valuations remain stable, and in some cases rise, despite huge hits elsewhere, including the manufacturing industry – due to Trump’s sweeping tariffs – and agriculture, following subsequent trade deals.
PitchBook’s “Private Capital in Sports: PE is up to Bat” report states that sports franchises “are experiencing a significant increase in worth, driven primarily by expanded media rights agreements” with women’s sport especially growing with deals including Reddit co-founder Alexis Ohanian’s £20m investment for 10 per cent of Chelsea’s WSL team.
The data suggests that capital will continue to pour into sports-focused funds given how accessible the asset is, and how immune it is to tariffs. That said, secondary effects such as shirt manufacturing and tertiary effects such as national recessions remain concerns.
Trump tariffs not hitting… yet
“We do not see the recent market volatility stemming from tariffs affecting sports teams’ valuations, especially those that are not publicly listed,” Nicolas Moura, senior EMEA private capital analyst at PitchBook, told City PM.
“Sports investing looks at the medium-to-long term with holding periods typically at least five years long and can exceed 10 years. In our recent note on North American sports, we highlighted the fact that the NFL changed its bylaws last year to start accepting up to 10 per cent of PE capital under the condition that the investment is held for at least six years.”
In North America, where Premier League club Manchester United finds itself on the Nasdaq, returns on sports franchises have dwarfed the likes of the S&P 500 average.
US franchises, as well as European football clubs, have seen their average team valuations “outpace” the S&P 500 over the last two decades.
“One could argue that the second-order effect of potential tariffs could impact merchandising divisions at various sports teams by making team jerseys more expensive, for example,” Moura added.
“However, this would be offset by rising valuations thanks to higher broadcasting rights and higher viewership across various sports. We would be more worried about third-order effects of tariffs, which could imply recessions across major economies. However, this remains and if and when.”