Apple will pay $2.5 billion to broadcast Major League Football for the next 10 years

CUPERTINO, Calif. (AP) — After first plunging into sports streaming last year, Apple is now indulging itself.

The tech giant kicked off a 10-year partnership with Major League Soccer on Wednesday with the launch of the Season Pass on Apple TV+.

“This is very important to us. It’s one of the main things we’re doing this year and for the next 10 years. We’re now part of a family together,” Apple AAPL,
CEO Tim Cook said during a presentation to MLS players, owners and the media at Apple Park last month.

Apple’s launch follows a transformative year for sports and streaming services. The NFL also embraced streaming last year as Prime Video carried “Friday Night Football” and Major League Baseball partnered with Apple TV and Peacock to broadcast games. The NFL also reached an agreement with Google’s YouTube TV to carry the “Sunday Ticket” package starting next season.

Technology companies and broadcasting outlets also see the value of live sports programming. According to a recent report by Parks Associates, sports broadcast subscription package revenue is expected to increase 73% to $22.6 billion in 2027 after bringing in $13.1 billion last year.

In the age of cord cutting, technology companies, advertisers, and sports leagues are also finding that young viewers continue to migrate toward streaming and binge-watching.

According to tracking data from Amazon, 22% of viewers of “Friday Night Football” on Prime Video were in the coveted 18-34 age range, compared to 14% of viewers who watch NFL games on the linear networks.

The average watch time for Thursday Night games was 85 minutes — 9 minutes longer than games not on Prime.

Apple’s collaboration with MLS makes sense for both parties. Various studies have found that football fans are more likely to watch sports on broadcast equipment or recorded TV.

“This is a deal that captures the direction that things have been going for a while and also drives it forward,” said Daniel Kirschner, co-founder and CEO of Greenfly, a digital media distribution platform that works with more than 30 leagues.

MLS will receive at least $250 million per season from Apple. The league averaged $90 million per season under its previous eight-year agreements with Fox, ESPN, and Univision.

Apple has made previous forays into live sports broadcasting, but this is its first significant involvement with the league. MLB aired two games on Apple TV+ on Friday nights last year, including the game in which St. Louis’ Albert Pujols became the fourth player in baseball history to reach 700 home runs.

This deal could indicate the direction the league’s sports broadcasting and media rights are headed.

Apple and MLS are teaming up for a direct-to-consumer product that allows fans to watch every game without interruption or local restrictions that goes beyond North America. Fans in London, Paris and wherever the Apple TV app is available will also be able to watch the games.

“We looked at sports and recognized that there has never been a better time to be a sports fan, and there has never been a worse time to be a sports fan,” said Eddie Cue, Apple’s senior vice president of Services. “We have an opportunity through this partnership to make the experience a lot better for fans, and help grow the sport and the league in the United States and abroad.”

The MLS handles the production of all of its matches, similar to the way European soccer leagues operate. But other leagues, such as the English Premier League and Bundesliga, then sell their rights to broadcast outlets in each country. In this case, only one outlet – Apple – has global rights.

Even games on Fox in the US, TSN and RDS in Canada, and TelevisaUnivision will be available on the Apple TV+ app.

“I think they were the right league to realize that the long-term value of their rights is best with a broadcast partner or technology partner, as opposed to traditional leagues that still need billions of dollars in payments from traditional networks,” said John Cohen, senior vice president at Frequency Inc., which Offers programs to ad-supported broadcast channels.”I think it’s a good time for both of them to do that.”

While Apple TV+ achieved success as the first streaming service to take home an Oscar for Best Picture with last year’s “CODA” and “Ted Lasso” winning the Emmys for Best Comedy, it hasn’t turned into an entertainment company or studio. Still a diversified company.

“Sports is driving a lot of engagement in terms of media. I think it shows they have a very specific strategy in terms of increasing subscriptions and video services,” Cohen said.

Other leagues will be watching closely as MLS and Apple progress. While the NFL, the National Basketball League and baseball have struck rights deals over the past two years, the NBA is expected to have some broadcast elements when it begins negotiations for its media rights this year.

Cue and Cook acknowledge that there will be growing pains during the first year, especially with MLS working with its own production company. However, everyone is focused on the potential of the project and the way forward.

“People will say we’re the smartest guys in the room or that we were a couple of years early,” said MLS Commissioner Don Garber. “The opportunities are endless, but it is a job that involves many tests.”

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