President Trump on Wednesday afternoon declared what he called “Liberation Day”: Announcing wide-ranging tariffs that he argued will rebalance the global trade order, and in his words make America rich. Many entertainment executives were surely watching what happened closely, and they aren’t feeling rich. The media business might not be built on imported physical goods, but many of its largest advertisers are, and the ad business is already beginning to feel the pain, multiple sources on the buy side and the sell side tell The Hollywood Reporter. Some major advertising categories, including automotive, consumer packaged goods and food and drinks, are beginning to reexamine their spending as they crunch the numbers to figure out how the looming tariffs — and the possibility of an all-out trade war — will impact their businesses. At the same time, a potential decline in tourism from Canada and Europe has the potential to weaken the travel sector, where airlines and hotels compete for consumer dollars. “It really is a perfect storm of bad news,” one high-level media source says, noting that while current scatter pricing is OK for now, the outlook isn’t looking as hot for the remainder of the year. The tariffs impact every country, with everything from grocery staples and cars to electronics and raw materials set to be impacted when the tariffs go into effect. Stock market futures plummeted after Trump announced the moves. In just the past couple of weeks, the influential advertising analyst Brian Wieser and the media intelligence firm Magna have each lowered their advertising growth forecasts for 2025. Wieser lowered his 2025 outlook to 3.6 percent, down from 4.5 percent in December. Magna lowered its outlook to 4.3 percent down from 4.9 percent previously. Yes, they expect the ad business will grow, but it will mark a sharp downward swing from 2024, and essentially all that growth will be coming from tech giants like Google and Meta. “In December, we wrote about 2025’s uncertainty in the wake of a U.S. federal election that produced what appeared to us as a negative outcome for the advertising industry given the incoming administration’s articulated policy preferences,” Wieser wrote. “By now, nearly three months into the year, what we can see is a certainty of additional negative factors, including volatility around trade policies and a more extreme threat to supply chains and corporate decision-making than we previously expected.” “The current — hopefully temporary — dip in confidence has already dampened the dynamics of the ad market, prompting U.S. to revise our growth forecast for 2025,” wrote Vincent Létang, Magna’s executive VP of global market intelligence. “While total ad spend is still expected to grow in the mid-single digits, digital media ad sales will continue to experience high-single-digit growth. In contrast, most traditional media channels may face stagnating ad revenues this year.” Even tech giants, however, are not immune. MoffettNathanson’s Michael Nathanson wrote in a March 31 note on YouTube that even the king of ad-supported streaming video will likely see its growth moderate. “While the platform’s expanding reach among older demographics enhances its monetization potential, we think the growing supply of impressions across the broader CTV ecosystem could exert downward pressure on ad pricing, offsetting those gains,” Nathanson wrote. “Additionally, a softer macroeconomic environment may put pressure on ad budgets industry-wide. As a result, we now project YouTube’s advertising revenue to grow in the low double digits over the next few years.” For many traditional media companies (like the entertainment giants) however, ad anxiety seems to be all the rage right now, and low double-digit growth would be a dream come true. Despite the gloom and doom from executives and advertising analysts, JPMorgan’s David Karnovsky noted in a March 28 report that there has been “no softness observed so far” in the ad market, with local TV being a notable exception given the heavy reliance on automotive ads. Still, if there is a silver lining for traditional media companies, it is that sports programming — which they are all leaning into heavily — should feel a degree of protection from any chaos, given continued strong demand. Both buy and sell side sources say that demand for live sports continues unabated. “Sports remains robust while streaming video is still managing through the impact of increased supply in the market,” wrote Bank of America analyst Jessica Reif Ehrlich in a March 28 report, adding that in streaming the market is still grappling with Amazon’s decision last year to turn on ads for Prime Video, causing inventory to explode. “For advertising, executives highlighted continued robust demand for sports on linear and streaming, while news also appears to be strong where ratings are higher, with pre-emptions the only constraint on growth,” Karnovsky wrote. “Linear entertainment was described as fine with scatter holding above upfront pricing. In general, dollars appear to be moving from cable entertainment to news/sports for reach and CTV for targeting. The latter has seen depressed CPMs as a result, though this seems to have bottomed.” Still, the timing of the tariffs and downturn couldn’t be worse for entertainment companies, which will begin their upfront conversations with media buyers in the coming weeks. The upfronts are when advertising commit billions of dollars in spending to secure the best rates and best programming. One entertainment advertising executive says they believe this year’s presentations will lean in hard to sports and live events to try and mitigate the broader concerns in the market. They also expect to secure commitments from buyers to spend on some entertainment programming (at least on streaming) in order to guarantee prime inventory on the best sporting events. NBC, for example, will be selling next year’s Super Bowl, winter Olympics and the return of the NBA on NBC. A buy-side source, meanwhile, says that clients are beginning to think about where they will prioritize buys should the economy further deteriorate, or if tariffs impact product offerings. Sports are likely to stick, with entertainment spend likely becoming more focused and targeted. Given the trajectory of the economy (Goldman Sachs raised the 12-month risk of a recession to 35 percent on March 31), some brands may take the risk of moving more of their budgets to the scatter market, where prices and inventory are more fluid. And while it has not come to fruition yet, executives are still crossing their fingers that HHS secretary Robert F. Kennedy Jr.’s long-promised threat to ban pharmaceutical advertising does not become a reality. Karnovsky writes that the executives he spoke to “didn’t sense any concern” on the issue, “with some noting that lobbying pushback on a ban would be intense, and in a worst-case scenario there would be replacement demand (especially for sports).” Of course sports alone cannot carry a media company through an economic downturn, and as the buy side source noted, when times get tough, advertising budgets are the first things to get trimmed. And it is likely to be the less tech-savvy entertainment companies that will feel the pinch first.