By Mark Seavy 

As much as any IP, contracts and how to potentially revise them to offset tariffs will be central to Licensing Expo this year, according to licensing executives. 

That doesn’t mean showgoers won’t be on the hunt for new IPs and tracking trends. But with so much product production based in China—more than 80% in the case of toys, costumes, inflatables, and other categories—licensees and licensors will be delving deeply into contract details at this week’s event in Las Vegas. 

Much of the attention will be devoted to offsetting the added cost of tariffs, especially those related to China—the imposition of which was recently given a 90-day extension in being cut to 30% (50% if you included the preexisting 20% levy), down from 145%. 

Yet what form contract revisions, if any, might take is far from certain given the fluid nature of the tariffs, licensing executives said. Among the changes being considered are reducing royalties by 1-2% while keeping MGs in place or extending contracts a year to offset a potential decline in unit volume tied to higher retail prices. 

Concept One Accessories isn’t signing new agreements until it’s sure what the tariffs will be, CEO Sam Hafif said. Other licensees, in the case of renewals, are asking to delay final discussions on an agreement until July in hopes of having clarity on where the tariffs will land and what their impact might be. 

“I think the licensors are going to get a lot of feedback that orders aren’t as bad as they were two weeks ago [when there was a proposed 145% tariff], but not where they should be,” said a costume licensee. “They are going to make decisions on whether they share on any royalty relief and my guess is they won’t. There are too many licensees for them logistically to alter all contracts and take a hit when they have a business to run.” 

Yet several licensors we polled were willing to listen to proposed contract changes. Some drew parallels with the pandemic, which forced wholesale changes to contracts to account for lost business. 

“We are being more reactive than proactive with licensees seeking contract changes,” a licensing executive said. “This is very much a moving target with tariffs rates. There are certain categories that have fat margins that could be treated differently than those that are tight. We are probably going to accommodate requests on a case-by-case basis.” 

Although negotiations on new contract terms are fluid, price increases appear a certainty regardless of where the tariffs land, according to licensing executives. Stanley Black & Decker, which has an outbound licensing program for the Craftsman brand, said in releasing earnings it was going to boost prices. And Walmart executives, releasing earnings last week, said that prices are being marked up despite more than 60% of the products it sells here being manufactured in the U.S., something that amounted to $296 billion in goods in 2024, CEO Doug McMillon said. 

“Given the magnitude of the tariffs, even at the reduced levels announced last week, we aren’t able to absorb all the pressure given the reality of narrow retail margins,” McMillon said. “We are going to be at a point where we are going to see more markups than normal, and it is so important to get inventory right in this environment…There is a lot of uncertainty and volatility because it is a dynamic and fluid environment. Quarter to quarter it is hard to predict, and we will see where it comes out.” 

Given the impact of tariffs and the uncertainty that is accompanying them, some licensees said they will narrow their assortment to focus on top sellers and take fewer chances on new properties. The entertainment landscape is focused on sequels in 2026, including Shrek 5 (April 3), Toy Story 5 (June 19), and Super Mario Bros. 2 (April 3), and many licensees are focusing on evergreen properties. 

Streaming services, including Netflix and Amazon Prime, will also have a presence at Licensing Expo, the former conducting a brand summit at the Mandalay Bay Hotel on May 19th. Amazon will continue building out MGM’s properties, which it acquired along with 4,000 films in 2022.  

Video game properties are expected to be in the spotlight this week, given the success of recent series based on games like Fallout and Last of Us, licensing executives said. Riot Games, for example, has taken booth space at Licensing Expo to promote its titles Valorant, League of Legends, and Arcane. And that is in addition to longtime exhibitors Capcom (Street Fighter), Ubisoft (Star Wars Outlaws and Assassins Creed), Sega, Nintendo, and others also being at the show. 

Gaming is also a new avenue for tried-and-true evergreen brands. Hasbro licensee Scopely, for example, recently hit $5 billion in revenue for the Monopoly Go! mobile game and Hasbro has 115 digital game projects in various stages of development.  

“Digital gaming continues to be one of the fastest-growing forms of play, and we’re committed to being a leader in the space,” said Kim Boyd, President of Global Toy Brands and Licensed Consumer Products at Hasbro. “Much like our approach to physical toys and games, we’re leaning into strategic partnerships to help bring our IP to life across platforms, genres, and audiences.”