Learn Spanish (Latin America): La federación protege el deporte; por lo tanto, cancela el contrato. - The federation protects the sport; therefore, it cancels the contract.

While both mean 'so' or 'therefore', por lo tanto is more formal and emphasizes a direct logical consequence. It perfectly fits the institutional, legal context of federations and contracts shown in this sentence, whereas así que might sound a bit too casual.

Does por lo tanto trigger the subjunctive or the indicative in the second clause?

It triggers the indicative. Illative connectors like por lo tanto, en consecuencia, and por consiguiente are used to declare a resulting fact or action, not a doubt or emotional reaction. That is why the sentence uses the indicative cancela instead of the subjunctive cancele.

Is the punctuation around por lo tanto mandatory?

In formal written Spanish, yes. When compound connectors like por lo tanto link two independent clauses, they are traditionally preceded by a semicolon (or a period) and followed by a comma.

Why is there no pronoun like ella before cancela to clarify who is canceling the contract?

Spanish naturally omits subject pronouns when the subject is obvious. Because la federación is the subject of the first clause, it automatically carries over to the second. Adding ella here would sound repetitive and unnatural.