Apple takes first major step toward becoming a sports broadcaster

A new blow for the historical TV channels whose sports remained one of the last square meadows. Following Amazon’s lead with its Prime Video service, Apple shows that it now wants to make its Apple TV+ streaming service a major player in sports rights.

The firm headed by Tim Cook has indeed signed a ten-year contract with the American Major League Soccer (MLS) to broadcast all its games. The amount of the transaction was not communicated, but according to the American press, it would amount to at least 2.5 billion dollars, that is to say 250 million per year. If certain revenue thresholds are exceeded, the MLS and Apple would share the extra profits.

“Huge deal.”

Of course, soccer – that is, European-style soccer – does not have the same audience in the United States as American soccer or baseball. But the ambitious deal signed between the two sides hints at Apple TV+’s intentions in sports, analysts say. “It’s a huge deal,” Rich Greenfield, a leading industry analyst, told Bloomberg TV.

In March, Apple had announced a deal to broadcast two Major League Baseball games on Friday in several countries, including the United States. This time, the alliance goes much further. MLS becomes the first federation to give all its matches to a streaming platform, even if some matches will be co-broadcast by traditional live TV players.

A large part even, according to the specialized website The Athletic, which explains that agreements are expected with the current broadcasters of the MLS: ESPN (Disney Group), Fox and Univision. But until now, a large part of the matches of a sport always went to a traditional pay-TV on an exclusive basis and the complementary lots were ceded to platforms.

All games to one platform

To access matches on the MLS web channel, you’ll need to download the free Apple TV app to your smartphone or TV. Some matches will be free, but most of them – and the most interesting ones – will be available if one has subscribed to Apple TV+, which costs $4.99 per month. Another novelty is that this deal gives Apple the world rights to American soccer, whereas the leagues preferred until now to better value them by selling them country by country.

In Europe, and particularly in France, this new foray by Apple is likely to give pause not only to Amazon, which has become the main broadcaster of the French Ligue 1 championship and the broadcaster of the French Open for the evening matches, but also to Canal+. As well as, of course, all the sports leagues concerned about getting the best value for their rights. One auction in particular is on everyone’s mind: that of the new European Champions League of soccer. It has just been launched by UEFA. Canal+ is currently the holder of the rights in France.

Apple interested in the Champions League?

A much tougher economic environment – including a jump in inflation that’s affecting consumers – as well as soaring interest rates, which are degrading the valuations of tech and media companies, have made streaming players more tense. To recruit and perhaps, more importantly, retain subscribers, they are stepping up rights purchases outside of series and movies – into reality and streaming shows or sports.

Amazon’s and Apple’s advantage is that they don’t have as much direct pressure as a Netflix or Disney+ on the profitability of their video business, because it’s part of a broader offering. Launching in 2019, Apple TV+ has had a niche strategy so far, especially when compared to a Netflix that aims for maximum catalog depth.

Apple’s streaming service, which reportedly generates $2.2 billion in annual revenue according to a Bernstein analyst cited by the “Wall Street Journal,” has played the high end with carefully selected content – like the movie “Coda,” which won it the first Academy Award for best film for a platform, Sofia Coppola’s “On the Rocks” or the series “Morning Show” or “Ted Lasso”. The development of Apple TV+ is seen by analysts as a way to convince owners of Apple devices, such as iPhones, not to switch to another brand. Even though iPhone owners currently have “only” three months of free access to Apple TV+, instead of one week for others.