Sports asset management company Arctos surpasses $11 billion in value, undeterred by potential tariffs.
In the face of the recent tariffs announced on April 2, which are expected to represent a fiscal contraction of approximately 2% of national income, sports franchises in the United States are generally shielded from direct tariff volatility and trade wars.
This resilience is rooted in the nature of their business model, which focuses on intellectual property and media, combined with adaptive supply chain and pricing strategies to manage tariff-induced cost pressures on physical merchandise.
One key factor is the media and broadcasting rights, which are largely insulated from tariffs since they involve digital content distribution rather than physical imports or exports.
Long-term investment strategies in sports, media, and entertainment assets also provide risk-adjusted returns with low correlation to trade policy volatility or broader economic cycles.
Strategic merchandise supply chain management is another crucial element. Though tariffs can impact the cost of importing sports equipment and apparel, franchises and associated companies mitigate this by adjusting pricing or shifting sourcing, slowly passing costs to consumers.
Regulatory and policy engagement, such as executive actions supporting college sports and other leagues, also help protect the broader sports ecosystem from indirect repercussions of trade tensions.
Arctos Partners, a leading institutional investor in North American sports, has been at the forefront of this trend. The firm, which has ownership stakes in at least 15 teams in the four largest American sports leagues, has a thriving investment strategy in buying minority stakes in sports teams.
As of entering 2025, Arctos had $11.3 billion in sports-related funds. This growth is likely due to new fundraising, as the firm reported $3.58 billion in assets for Arctos Sports Partners Fund I as of March 31, up from $3.21 billion two years ago.
Moreover, the long-term nature of media rights, sponsorships, and stadium naming deals gives the sports industry plenty of financial cushion to ride out short-term turmoil. For instance, the NFL's media deals run through 2033, and the NHL's Canadian broadcasting rights were just inked through 2038 with Rogers Corp.
However, not all sports franchises are immune to the effects of tariffs. Canadian franchises, for example, face the problem of exchange rates affecting business, especially if the U.S. dollar strengthens.
Despite these challenges, the sports industry remains a resilient sector, capable of weathering economic storms. Even during past economic downturns, such as the dotcom bust, mortgage crisis, and the pandemic, sports team values have sustained their values.
In a notable example, the Boston Celtics are under agreement to sell for $6.1 billion, the most ever paid for a sports franchise. This underscores the enduring appeal and financial strength of sports franchises, even in the face of economic uncertainty.
In conclusion, while tariffs may pose challenges to certain sectors, sports franchises are well-positioned to navigate these challenges thanks to their unique business model and adaptive strategies.
- People investing in sports, media, and entertainment assets often see risk-adjusted returns with low correlation to trade policy volatility or broader economic cycles.
- Arctos Partners, a leading institutional investor, has reported growth in its sports-related funds, with over $11.3 billion as of entering 2025.
- Strategic merchandise supply chain management helps sports franchises mitigate the impact of tariffs on the cost of importing sports equipment and apparel.
- Long-term media rights, sponsorships, and stadium naming deals give sports industries substantial financial cushion to withstand short-term economic challenges.
