Trump’s economic policy impedes media industry progress

A version of this article first appeared in the CNBC Sport newsletter with Alex Sherman, which brings you the biggest news and exclusive interviews from the worlds of sports business and media. Sign up to receive future editions, straight to your inbox. Everyone is trying to assess how President Donald Trump ‘s tariff policies will or could affect their lives and industries. In the sports world, the resulting economic uncertainty will likely do more harm than the tariffs themselves. I asked WNBA Commissioner Cathy Engelbert (this week’s “On The Record” guest) if market turbulence in recent weeks has affected ticket sales for the upcoming season that begins May 16. “Not this season, for sure, because most of our arenas are already sold out,” Engelbert told me. “So I’m not worried this year, but certainly as we go forward, if we were to enter into a deep recession of some sort, then you start to look again at scenario plans and contingency plans around that.” As the private equity firm Arctos Partners said last week in a note to clients, sports are fairly well protected from recessions because “the underlying business model of sports benefits from exceptional stability due to long-term, contracted revenues across media rights, sponsorship and ticketing and enjoys sticky, largely domestic demand.” A recession typically goes hand-in-hand with a dip in advertising spending. Logically, companies such as automakers or toymakers that might see demand fall as tariffs raise prices could pull back on advertising to save money. Still, several big media companies told me that they haven’t seen any significant effect on ad spend yet heading into next month’s industry-wide upfront presentations. Sports, in particular, will probably be the last events to lose advertising tonnage. Fans watch games live and can’t skip ads. Sports and league executives expressed confidence that scripted entertainment would feel more of the pain if companies retrench. Alex Weprin of The Hollywood Reporter wrote a good piece about this yesterday . Some sports may also benefit from decreased travel – a phenomenon United Airlines said this week is already happening. Consumers could attend local sporting events for entertainment instead of going on pricier vacations. Last month’s consumer confidence reading hit a 12-year low. But one place where the sports world may feel the effects is in media consolidation – or lack thereof. Legacy media companies including Warner Bros. Discovery, Paramount Global and Comcast want to change their asset mix. Comcast is moving forward with spinning out most of its cable networks, including CNBC. Paramount Global is trying to merge with Skydance Media. No company’s CEO has been more vocal about the need for a light regulatory touch on mergers and acquisitions than Warner Bros. Discovery boss David Zaslav . “We just need an opportunity for deregulation, so companies can consolidate and do what we need to be even better,” Zaslav told reporters at Allen & Co.’s annual Sun Valley conference last year. Consolidation is a big deal for the sports world. All three of Warner Bros. Discovery, Comcast and Paramount own major sports rights, including some of the biggest packages of rights for the National Football League, the National Basketball Association, the National Collegiate Athletic Association, the National Hockey League and Major League Baseball. Zaslav hoped a Trump victory would bring the deregulation he wanted. Not only has that not happened yet (Paramount’s deal with Skydance is still awaiting approval from the Federal Communications Commission, prompting the first of potentially two 90-day extensions), but wild market swings have made any type of consolidation virtually impossible. While Trump claims to love the art of the deal, the administration’s economic policies have ironically stymied Zaslav’s dealmaking plans. Paramount Global would love to close its agreement with Skydance, fix Paramount Pictures by adding to its movie slate, and then merge with another studio, according to people familiar with the matter. Warner would be near or at the top of that list, the people said. But if Zaslav doesn’t want to wait, I’m told he may still pivot and split his company into two – a low-debt entity housing his streaming service Max, the studio, the gaming division and the company’s content library, and a second company with WBD’s cable networks and free over-the-air European assets, which would house news and sports. No decisions have been made on this front yet, but WBD has hired bankers to work on options which include a potential split, according to people familiar with the matter. The Financial Times first reported this idea almost a year ago – quickly following up that Zaslav had decided a breakup wasn’t a good idea. Still, I’m told WBD hasn’t ruled it out if the board thinks it’s the easiest way to facilitate asset reallocation because other deals aren’t on the table. Warner Bros. Discovery has already internally split its legacy linear assets from the streaming and studio business, making a move far easier. The NBA was concerned WBD might not have the balance sheet heft to pay $2 billion a year (or more) for league rights for the next 11 years when it struck its most recent TV deal last year. If Zaslav were to split the company, the non-streaming entity that owns sports rights – including MLB, NHL, French Open, March Madness, NASCAR, and more – will be even smaller. If that’s the direction Zaslav goes, it’ll take about ten seconds for pundits to start predicting what types of combinations could come next – likely starting with Comcast’s SpinCo and RemainCo (which will still house NBCUniversal and Peacock). Breaking up the company doesn’t require regulatory approval or glorified bribes to the Trump administration, as Michael Wolff reported earlier this week . Neither does forming new cross-company streaming bundles – another possibility once Paramount has more clarity on its future. A recession is probably worse news for the fourth or fifth-most popular streaming service (see: Max, Paramount+, Peacock) than it is for a company like Netflix – which, by the way, reports quarterly earnings this afternoon. I’ll be listening to the Netflix conference call for any insights into how that company is viewing Trump’s policies. Warner Bros. Discovery has already paused non-critical business travel, first reported by Oliver Darcy ‘s Status newsletter. I can add a little more detail – I’m also told the company has temporarily frozen non-critical hiring and is being cautious about other expenditures, such as how many employees to send to Cannes Lions, the industry’s annual advertising extravaganza in Southern France — a location where Zaslav himself threw a big party just two years ago. A Warner Bros. Discovery spokesperson declined to comment. On the record With WNBA Commissioner Cathy Engelbert and Ally Financial Chief Marketing Officer Andrea Brimmer … To no one’s surprise, the Dallas Wings selected UConn star Paige Bueckers first overall in Monday’s WNBA draft. And like her predecessor as the No. 1 pick, Indiana Fever guard Caitlin Clark , Bueckers takes an already established brand with her to the pros. I spoke with WNBA Commissioner Engelbert and Ally Financial Chief Marketing Officer Andrea Brimmer about how college stars can bring a continuous stream of attention to the longest-running U.S. professional women’s sports league. Ally announced last week it has become the official banking partner of the WNBA, which began play in 1997, while also striking a branding deal with Bueckers. “We need to continue to storytell, to market around these players, and also our broadcast partners and our corporate partners – I mean, there is not a sporting event today that you don’t see an ad spot with WNBA players in it, because our corporate partners and our media partners have stepped up to elevate the visibility of these players and really market around them,” Engelbert said. Bueckers has 2.3 million Instagram followers – “more social media followers than any athlete that played in March Madness, either male or female,” said Brimmer. Engelbert told me the WNBA is in “huge growth mode,” noting that when she first joined the league as commissioner in 2019 after a career working at Deloitte, “less than 1% of all corporate partnership dollars went to women’s sports, and less than 5% of all media coverage went to women’s sports.” The next step for the WNBA will be to raise player salaries, which can happen as league revenue rises through partnerships like the one with Ally, Engelbert said. “The leagues cannot sustain without brand investment, and that rolls down in terms of player salary,” Engelbert told me. “And so it is requisite for more and more brands to step up and support. Still, today, you see less than 6% of the Fortune 500 fully investing in women’s sports. Companies need to do better.” Watch the entire interview – it’s a good one – here, or listen to it here and follow the CNBC Sport podcast if you prefer the audio version. CNBC Sport highlight reel The best of CNBC Sport from the past week: CNBC’s annual MLB valuations are out. This year’s most valuable team? The New York Yankees, clocking in at $8 billion. The least valuable is the Miami Marlins, at a measly $1.2 billion. The average team is worth $2.62 billion. Find out where CNBC’s Michael Ozanian ranked your favorite team here . Ozanian also spoke with New York Yankees President Randy Levine , who took a valuation victory lap. Levine told Ozanian that when former Yankees owner George Steinbrenner hired him in 2000, Steinbrenner told Levine that he had a great baseball team, but he wanted to build a sports and entertainment company. You can watch the entire interview here . CNBC’s Lillian Rizzo took a look at why MLB is attracting more private-equity ownership interest. A smart examination of how tariffs are affecting the golf industry here with Foray Golf CEO Megan Lamothe , whose company manufactures women’s golf products. “The last ten days, we’ve been on the edge of our seats,” Lamothe told CNBC’s Kelly Evans . “We’re just trying to figure out what to do … We just can’t absorb this margin. It just can’t happen. We’re giving the product away.” Passing on costs to the consumer can happen over time, but not overnight, explained Lamothe, who said she’s already been on the phone with her lawyer about assessing the go-forward viability of the company. Enjoyed this one from CNBC’s Russell Leung about how the NBA, MLB and the English Premier League are trialing devices to make it easier for blind and low-vision people to follow along at sporting events. The big number: $78,831 That will be Bueckers’ salary in her first year playing for the Wings. To put that in some context, Los Angeles Dodgers superstar Shohei Ohtani signed a 10-year, $700 million contract in 2023. That works out to about $191,780 per day – or nearly 2.5x Bueckers’ annual salary. Also noteworthy: Bueckers signed a three-year deal this week to play in Unrivaled, the 3-on-3 women’s basketball league that plays in the WNBA offseason. She’ll reportedly earn more money in one year for that deal than she will for all four years of her WNBA rookie contract. Quote of the week “Let’s be honest—these bats aren’t great for the game. They’re giving one team an extreme advantage.” This quote isn’t from this week – it’s from way back on March 30, four days into the MLB season. The quote, from a Deadspin article , refers to the torpedo bats many players on the New York Yankees are using. You may remember, a bunch of Yankees hit home runs during opening weekend, and then people went nuts. Checking in a couple weeks later … The Yankees are now 11-7. Here are some stats for the Yankees using the torpedo bats: • Jazz Chisholm : Batting average: .167 (six homers) • Anthony Volpe : Batting average: .219 (four homers) • Paul Goldschmidt : Batting average .348 (one homer) • Austin Wells : Batting average: .182 (three homers) • Cody Bellinger : Batting average: .182 (one homer) • Trent Grisham: Batting average: .308 (four homers) This doesn’t exactly scream “EXTREME ADVANTAGE!” It’s true that the Yankees are still leading the AL in runs scored. But it’s two players not using the torpedo bats – Aaron Judge (.409, seven homers) and Ben Rice (.273, five homers) – who lead the team in total bases. I don’t mean to pick on Deadspin – this sentiment was fairly widespread. I had about 15 different quotes to choose from here. But maybe remember this the next time you’re about to fire up a hot take after FOUR GAMES. Around the league End-of-regular season NBA TV ratings are out, and ABC, ESPN and TNT (the NBA’s TV partners) averaged 1.53 million viewers – down 2% from last season’s four-year high. This is the last year TNT will broadcast live games. Starting next season, the NBA’s TV partners will be ESPN/ABC, NBC and Amazon Prime Video. The No. 1 selling NBA jersey this season ? Luka Doncic . Great work, Dallas Mavericks. Kudos on a job … done . A belated congratulations to Rory McIlory for winning, and then losing, and then winning, and then losing, and then winning The Masters. He earned $4.2 million for his victory . CBS also went home a winner , with its most-watched final round of the tournament since 2018, averaging 12.7 million viewers. (Incidentally, I was shocked the 2019 Masters final round – won by Tiger Woods – didn’t have a higher TV rating, but then I remember that round was moved up to an unusually early start time due to the threat of inclement weather). More golf news: a co-ed, mixed-team event will debut at the Summer Olympic Games in L.A. in 2028. NBC Sports has more details on how the event will work.

David Zaslav attends the world premiere of “The Flash”, in Hollywood, Los Angeles, California, U.S., June 12, 2023.

Mike Blake | Reuters

A version of this article first appeared in the CNBC Sport newsletter with Alex Sherman, which brings you the biggest news and exclusive interviews from the worlds of sports business and media. Sign up to receive future editions, straight to your inbox.

Everyone is trying to assess how President Donald Trump‘s tariff policies will or could affect their lives and industries. In the sports world, the resulting economic uncertainty will likely do more harm than the tariffs themselves.

I asked WNBA Commissioner Cathy Engelbert (this week’s “On The Record” guest) if market turbulence in recent weeks has affected ticket sales for the upcoming season that begins May 16.

“Not this season, for sure, because most of our arenas are already sold out,” Engelbert told me. “So I’m not worried this year, but certainly as we go forward, if we were to enter into a deep recession of some sort, then you start to look again at scenario plans and contingency plans around that.”

As the private equity firm Arctos Partners said last week in a note to clients, sports are fairly well protected from recessions because “the underlying business model of sports benefits from exceptional stability due to long-term, contracted revenues across media rights, sponsorship and ticketing and enjoys sticky, largely domestic demand.”

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A recession typically goes hand-in-hand with a dip in advertising spending. Logically, companies such as automakers or toymakers that might see demand fall as tariffs raise prices could pull back on advertising to save money. Still, several big media companies told me that they haven’t seen any significant effect on ad spend yet heading into next month’s industry-wide upfront presentations.

Sports, in particular, will probably be the last events to lose advertising tonnage. Fans watch games live and can’t skip ads. Sports and league executives expressed confidence that scripted entertainment would feel more of the pain if companies retrench. Alex Weprin of The Hollywood Reporter wrote a good piece about this yesterday.

Some sports may also benefit from decreased travel – a phenomenon United Airlines said this week is already happening. Consumers could attend local sporting events for entertainment instead of going on pricier vacations. Last month’s consumer confidence reading hit a 12-year low.

But one place where the sports world may feel the effects is in media consolidation – or lack thereof. Legacy media companies including Warner Bros. Discovery, Paramount Global and Comcast want to change their asset mix. Comcast is moving forward with spinning out most of its cable networks, including CNBC. Paramount Global is trying to merge with Skydance Media.

No company’s CEO has been more vocal about the need for a light regulatory touch on mergers and acquisitions than Warner Bros. Discovery boss David Zaslav.

“We just need an opportunity for deregulation, so companies can consolidate and do what we need to be even better,” Zaslav told reporters at Allen & Co.’s annual Sun Valley conference last year.

Consolidation is a big deal for the sports world. All three of Warner Bros. Discovery, Comcast and Paramount own major sports rights, including some of the biggest packages of rights for the National Football League, the National Basketball Association, the National Collegiate Athletic Association, the National Hockey League and Major League Baseball.

Zaslav hoped a Trump victory would bring the deregulation he wanted. Not only has that not happened yet (Paramount’s deal with Skydance is still awaiting approval from the Federal Communications Commission, prompting the first of potentially two 90-day extensions), but wild market swings have made any type of consolidation virtually impossible.

While Trump claims to love the art of the deal, the administration’s economic policies have ironically stymied Zaslav’s dealmaking plans.

Paramount Global would love to close its agreement with Skydance, fix Paramount Pictures by adding to its movie slate, and then merge with another studio, according to people familiar with the matter. Warner would be near or at the top of that list, the people said.

But if Zaslav doesn’t want to wait, I’m told he may still pivot and split his company into two – a low-debt entity housing his streaming service Max, the studio, the gaming division and the company’s content library, and a second company with WBD’s cable networks and free over-the-air European assets, which would house news and sports.

No decisions have been made on this front yet, but WBD has hired bankers to work on options which include a potential split, according to people familiar with the matter. The Financial Times first reported this idea almost a year ago – quickly following up that Zaslav had decided a breakup wasn’t a good idea. Still, I’m told WBD hasn’t ruled it out if the board thinks it’s the easiest way to facilitate asset reallocation because other deals aren’t on the table. Warner Bros. Discovery has already internally split its legacy linear assets from the streaming and studio business, making a move far easier.

The NBA was concerned WBD might not have the balance sheet heft to pay $2 billion a year (or more) for league rights for the next 11 years when it struck its most recent TV deal last year. If Zaslav were to split the company, the non-streaming entity that owns sports rights – including MLB, NHL, French Open, March Madness, NASCAR, and more – will be even smaller.

If that’s the direction Zaslav goes, it’ll take about ten seconds for pundits to start predicting what types of combinations could come next – likely starting with Comcast’s SpinCo and RemainCo (which will still house NBCUniversal and Peacock).

Breaking up the company doesn’t require regulatory approval or glorified bribes to the Trump administration, as Michael Wolff reported earlier this week. Neither does forming new cross-company streaming bundles – another possibility once Paramount has more clarity on its future. A recession is probably worse news for the fourth or fifth-most popular streaming service (see: Max, Paramount+, Peacock) than it is for a company like Netflix – which, by the way, reports quarterly earnings this afternoon. I’ll be listening to the Netflix conference call for any insights into how that company is viewing Trump’s policies.

Warner Bros. Discovery has already paused non-critical business travel, first reported by Oliver Darcy‘s Status newsletter. I can add a little more detail – I’m also told the company has temporarily frozen non-critical hiring and is being cautious about other expenditures, such as how many employees to send to Cannes Lions, the industry’s annual advertising extravaganza in Southern France — a location where Zaslav himself threw a big party just two years ago.

A Warner Bros. Discovery spokesperson declined to comment.