The president’s erratic policies arouse the concerns that the economy could go towards a slowdown, but history suggests that the franchise values will continue to climb anyway.
When The Boston Red Sox took the ground For a late opening day in 2020, there were no applauding fans in the stands or aligned in concession stands or traveling the team store. The streets around the Fenway park, generally animated in July, had become a ghost city.
This was the standard in the major baseball league – and countless other sports leagues worldwide – such as the COVVI -19 pandemic stadiums, canceled matches and declarations of profit and loss of the teams. The Red Sox, which had generated $ 519 million in revenue in 2019, saw that Mark fall almost $ 71%to $ 152 million, while the MLB average dropped to $ 122 million, compared to $ 346 million, according to Forbes estimates.
The decline did not extend to the values of the team, however. MLB franchises appreciated 3% on average from 2020 to 2021, at around $ 1.9 billionAnd climbed another 9% a year later, at 2.1 billion dollars. The Red Soxs did even better, jumping 5%, then 13% to land at $ 3.9 billion in 2022. The team is now worth around $ 4.8 billion, The third best brand in baseball.
“If you look in 2008 or during Cavid in 2020, you had to attach your seat belt and know that in the short term, you will take a financial hit,” said Tom WernerThe billionaire president of Fenway Sports Group, owner of the Red Sox, the Pittsburgh Penguins of the NHL and the Liverpool FC of the Premier League. “But that is part of the investor, right? Everything took a financial blow during Covid, and you just have to do it and be patient.”
This patience is about to be tested again, with investors from all walks faced with another year of uncertainty caused by the heavy tariff policies of President Donald Trump. The S&P 500 index has dropped by 4% so far in 2025, and has dropped by 15% before a recent rebound was stimulated by Trump in break most of the prices. JPMorgan economists say that there is 60% chance that the United States is entering a recession this year while Goldman Sachs think that chances are close to a 45% coin.
Again, however, Werner and his colleagues owners of sports are better placed than almost anyone to resist the storm. For decades, the values of the teams in the four main North American leagues tended to remain flat, or even increase a little, during wider economic slowdowns.
Werner, who may have to face prices in his day work as a television producer after Trump threatened this week to target produced films abroadRejects the idea that sports franchises are “proof of recession” – a sentence that has often been attached to industry. On the one hand, at least during the cocovated pandemic, the owners had to cover operational arrow losses. (The Red Sox, for example, saw their profits before interest, taxes, depreciation and damping plunge around $ 70 million in the red in 2020, against 89 million dollars in black the previous year.)
At the same time, however, the values of the team in the four major leagues have increased by around 2,000% on average since 1998, when Forbes I started to assess sports franchises, more than double the growth of the S&P 500 during the same period. Despite the economic disorders caused by terrorist attacks on September 11, the teams appreciated 20% from 2000 to 2002. They then increased from 7% from 2007 to 2008 and held stable in 2009, shaking the volatility of the subprime mortgage crisis.
And the trend goes up even further Forbes’ Numbers. THE Ross-Arctos sports franchise index—A gauge of growth in the value of the team compiled by the private investment company Arctos and the Ross School of Business of the University of Michigan – contains quarterly data from December 1960 to June 2024. In these 255 entries, the index has reduced a total of 39 times, and only 16 since 1976.
And in the past 48 years, the index has not dropped in consecutive quarters only three times, and never more than three consecutive quarters. Arctos also measures annual growth made up of sports teams at 13% since 1960, much better than 7% of the S&P 500 over the same period.
The leagues and teams are able to isolate themselves from larger market dives largely due to their long -term contracts covering media rights, sponsorships and premium seats, which lock an important part of their income from years in advance. For example, NBA teams have collected $ 45 million on average luxury suites and other premium seat rooms during the 2023-24 season, according to Forbes Estimates, representing almost 12% of their total income. National media rights are an even larger tranche of the pie – 35% in the NBA this season (132 million dollars per team) and 60% in the NFL in 2024 ($ 381 million), national football television transactions extending until 2033.
The sports teams also benefit from factors which are not directly linked to their finances, starting with the fact that there are only 124 franchises in the four major leagues. Get A group of billionaires Bidding each other, and emotion could take over. “In the long term, the rarity and fun value will always be up to the right,” said Dallas Mavericks owner, the owner of the minority Mark Cuban Notes by e-mail.
Sometimes there were hiccups. In 2010, the NBA bought the team now known as New Orleans Pelicans (then the Hornets) For $ 318 million When George Shinn, who had owned the franchise since he started playing Charlotte in 1988, faced money problems. Leaving the financial crisis, Shinn had not been able to find an appropriate buyer. “What is happening with tax policy, interest rates and markets always has an impact on assessments,” explains Cuban. “If the rich and (investment capital) are not rich, they do not buy.”
However, even in a sale in distress, Shinn has collected almost 10 times his initial investment of $ 32.5 million. Meanwhile, the Pélicans, who now belong to Gayle Bensonhave since added another zero to their evaluation: Forbes believes that the team is worth $ 3.05 billion.
The main field where market conditions can ding balance sheet franchises are the day of the match, such as sales, concession and goods sales. And although the American economy is not as disastrous as in the 2008, 2020 or 2022 bear markets, the Americans are starting to tighten their prosecution. Overall personal spending increased 1.8% in the first quarter, the slowest growth rate in two years, while gross domestic product decreased by 0.3%, the first quarterly drop in three years. Unemployment complaints are climbing, in part because of the cuts implemented by the Ministry of Elon Musk government efficiency, and the Conference Board consumer expectations index – which measures the perception of commercial conditions, employment prospects and future income in the next six months – has been at its lowest level since 2011.
Historically, however, this kind of gloom did not prevent families from using some of their savings during travel to the stage or arena of their favorite team. “You need a distraction when we are in bad times, economic or other,” explains Marc Ganis, president of the Sportscorp consulting company, who has worked with many team owners. “People need distraction, and the main distraction we have in our country is sport.”
Or as Werner says, “obviously, you must have eggs on the table, but people, I think, will always go to their home games, and they will certainly watch on television.”
Werner’s fans’ database has already shown incredible loyalty in similar circumstances: the Red Sox sold each home match from 2003 to 2013 to 200820 consecutive, even with the financial crisis sandwich in the middle. The president of the FSG is also quick to call a more recent example, of the match of the day of the Patriots of the club in April.
“This is one thing if Taylor Swift enters your market once every two years – you can sell 100,000 tickets,” says Werner. “What is extraordinary about the Red Sox is that the game was underway at 11 am, and 35,000 people found a way to go to Fenway Park. It is really a testimony to the relationship of this particular sports team in New England. ”