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Apple’s MLS deal is a win for cord cutters but may hurt league

Apple's MLS deal

English-language incumbents FOX Sports and ESPN were lukewarm about renewing MLS TV rights. ESPN didn’t place a bid for the streaming rights. Meanwhile, WarnerMedia lost interest after they secured the rights to the US National teams.

In the end, though, MLS found a partner to take its distribution and revenue to the next level.

The pressure was intense. In a competitive market where we saw both the Premier League and LaLiga secure record-breaking deals in the United States last year, MLS had found itself in a very difficult position. With the incumbents showing less gusto than what they did in 2015 when they secured the deal, it was key for MLS to find a new, outside partner.

In Apple, they not only found one in a deal worth $2.5 billion over 10 years, but they secured it with the second most valuable company in the world.

Global rights for Apple’s MLS deal is a concern

Apple TV is, in many ways, the perfect partner for MLS. For Apple, having global rights to every single game on its platform provides the tech giant something that no other league can provide. A complete monopoly over streaming worldwide. But it’s also a forward-thinking move by Apple. The tech giant knows that World Cup 2026 will generate a whole new generation of soccer fans who will consume media on their devices. Also, the carrot at the end of the stick is Lionel Messi, who will likely join a MLS team in the next two years, only further boosting the popularity of the sport, and making the streaming exclusivity even more attractive to Apple.

Considering the future upside and what the value of sports rights will be in ten years, Apple have gotten a deal. Two-hundred and fifty million dollars per year sounds like a lot of money. But by the time MLS makes Las Vegas the 30th franchise, that’s roughly $8.3 million per team. And that doesn’t factor in the production costs that MLS is incurring to bring games to streaming now that the local television contracts are gone.

At the same time, MLS has short-changed itself. Yes, signing Apple to a decade-long contract is a major milestone. Plus don’t forget that the league expects to finalize the linear television contracts in the coming weeks. However, how much appetite will the television networks have when they know that they won’t have exclusivity to the games that air on TV?

More so, Apple signing a global deal means that Major League Soccer is going to have a very difficult time convincing television networks overseas to pay top dollar for the rights to the games. After all, why pay maximum price when viewers worldwide can watch the game via the MLS app in Apple TV?

A win for cord cutters

Major League Soccer’s deal with Apple is a victory for the consumer. It means more access, plus no blackouts, as well as the benefit of whiparound shows and a more consistent schedule. Three years after the Bundesliga signed an exclusive agreement with ESPN+ to stream games, MLS is prioritizing cord cutting as the way to watch the league. For sure, it is a risk for the league, but it’s the right move at a time when the league needed a boost in revenue from a new media rights deal.

However, Apple’s insistence on a global deal gave the tech giant leverage in the negotiations. Apple executives would have known the difficult position MLS found itself in, and the Cupertino-based company took full advantage.

Without the tech giant, the outlook for the new MLS media rights deal would have been dim. With it, the future for cord cutters, the league’s finances and the growth of Apple TV is a win-win-win — even if MLS may ultimately feel shortchanged.

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29 Comments

29 Comments

  1. Ethan

    June 17, 2022 at 12:25 pm

    Can you guys make your mind up. When it was suggested but was still quite a pipe dream that Apple could get MLS rights.

    I’m Apr 14 2022 World Soccer Talk ran a article “Apple TV+ and MLS: A match made in Heaven”.

    But now that MLS got a way larger deal with Apple than many expected a minimum of $250m yr and still retain rights to negotiate a linear package now we have a article it can hurt the league?

    Pick a side of the fence please.

  2. JP

    June 16, 2022 at 11:11 am

    Overall this is a major plus. MLS moving in the direction all sports leagues should be going in the very near future. But, short term, will be difficult gaining the casual fans.
    Same way I felt when when Bundesliga went exclusively to ESPN+. Hardcore fans will follow, just as hardcore MLS fans must be over the moon with this deal, but the casuals who watched their local team OTA or on a RSN are left out. They won’t be going to seek out how to watch now, it’ll be forgotten.

    However, as Apple promotes it they may gain the younger generation who is already on streaming…but how many of these potential fans are already followers of the Euro leagues and will favor those over MLS? The ongoing issues for MLS gaining a major foothold in this country still remain. Soccer is an afterthought in most markets, and fans who do like soccer might gravitate more to leagues overseas where the match times don’t conflict with the 4 major Amercian sports (most of the time).

    Messi joining Miami in the near future will definitely get more eyeballs on MLS, but will they stay? I’m interested in watching Lorenzo Insigne for Toronto soon, but mainly to see how he looks vs MLS competition compared to his subpar final campaign in Serie A. After a few matches sure I’ll lose interest though

    With all that said, they have a better chance of gaining fans with Apple’s promotion than they do/did with the traditional television partners who have other properties they are going to promote more than MLS for very valid financial reasons.

    • Turfit

      June 16, 2022 at 2:41 pm

      I think that this can open the door for USL if USL renew their ESPN+ TV rights and continue their local OTA rights. If USL separate themselves from MLS by changing their calendar and adding pro/rel and other items that have been discussed on the website, they have an opportunity to be the more popular soccer league in US.

      • Mike

        June 16, 2022 at 3:00 pm

        Turfit, you nailed it. This could be an opening for USL to grow exponentially.

    • dave

      June 16, 2022 at 3:12 pm

      @JP, your comment gets at why I think the deal is very good for Apple. I suspect Apple may believe the long-term sports model is a global partner for each major league that handles payment, distribution, marketing, etc. All games available without restrictions in all regions through that partner. Partner helps acquire new fans and makes it easy to follow
      .
      If Apple are considering an eventual major sports play – something marquee like global NBA or full NCAA or etc. – they first need to experiment and become practitioners. If Apple incinerate $2.5 billion on MLS but gain insight on what to do better on bigger deals, that is still a great outcome for Apple. First-mover advantage gained from cost a miniscule fraction of free cash flow
      .
      A risk for MLS is that early experiments in search of game-changing innovation often fail. And while failure of Apple-MLS may still greatly benefit Apple, the same cannot be said for MLS. If the all-in for MLS ends up being, say, $400-$500 million rights revenue offset by $100 million production, that is $10-$15 million net per team per year. Locks them in for a decade far behind NFL, NBA, MLB, NHL, NCAA, EPL, Bundesliga, La Liga, etc.
      .
      In 2015, Don Garber said “I do believe in 10 years’ time or less, people will think of us like Serie A, La Liga, and hopefully the way they think about the Premier League. If we continue to do things right and stay to our plan”. I evaluate MLS’ deal using MLS’ stated aspirations. I cannot imagine La Liga or Serie A agreeing a $250 million per year global rights deal (locked in for 10 years) with sweeteners based on linear simulcasts or excess subscriptions

    • Joes

      June 17, 2022 at 12:41 am

      My dreams have been answered. All mls games in one place..so sick of chasing all over channels and streaming apps!!!

  3. Mercator

    June 16, 2022 at 12:35 am

    I don’t agree with the critiques. How much appetite will linear TV broadcasters have if they don’t get exclusivity? The article starts by saying the broadcasters never had any appetite to begin with. It looks like MLS squeezed a major payday out of a partner other leagues are dying to work with… when MLS really had no leverage because no one else was that interested! How much do overseas partners pay MLS? I only know of Sky, and I don’t think they pay much of anything (international fees aren’t even calculated into the current $90 million, telling you they have basically been worthless or low enough not to merit mention). The very fact we are talking about the value of MLS GLOBAL rights indicates how Apple has singlehandedly made the MLS international rights into a valuable commodity.

    $250 million is just the BASE fee. MLS can make much more if the subscribers reach a certain metric. This is a league that is happy to get 500k viewers for a big game, $250 million with the possibility of upside if they actually drive subscriptions is a great deal, and valuing the rights only at the base fee of $250m is basically admitting MLS cannot or will not actually drive subscriber growth over the 10 years (in which case, $250m is a GREAT deal for MLS). MLS has secured a solid foundation with this deal, and if/when the sports/streaming bubble implodes MLS has secured these revenues for 10 years. Expecting more is unrealistic given the interest in soccer in the US and MLS’ current viewer numbers, and this move might look brilliant if the market collapses (which ever market seems to be doing these days).

    MLS is now linked with probably the number one brand on earth, a brand associated with premier products and quality. They now have a direct link to a billion iPhone users, imagine that push notification! Tim Cook’s tweet about the rights got nearly as many likes as MLS’ own tweet. With everything streaming, MLS will also get an incredible amount of DATA on what fans are watching, what connects, where new markets may be, what isn’t working, etc. ESPN and Fox cannot provide this, they can hand over Nielsen’s best guess on general viewership. Apple can hand them names, email addresses, consumer profiles, watching habits, payment info, etc. This is extremely valuable as MLS works to produce and market its own product.

    The global rights are also brilliant. MLS is now a global league, if Atlanta signs some Polish phenom… Apple can give those games FREE to polish fans, allowing them to follow their favorite player in the MLS from Poland. This works for any country, MLS could easily become one of the most followed leagues in a number of countries with a few key signings and some marketing legwork from Apple. World Cup fans who come to Philly to watch their team in the World Cup…could go home with free access to Union games for a year, allowing them to build a connection with the city they just visited. There are so many options to reach so many fans who ALREADY know US cities, know football, and are happy to follow a player or city they connect with since it is easily available on Apple. Spanish, French, and Portuguese broadcasts cover all the Americas and Africa – it won’t compete with the EPL but it doesn’t have to, its in a completely different time zone and the ONLY league in that time zone fans can really access and connect with.

    Domestically, no blackouts is huge. If you don’t want to spend thousands on cable fees, local fans who want to support their city can watch the NFL or the MLS. That’s it. There is a reason the NFL prioritizes that sort of access for local fans and now MLS is the only other league providing that. It also allows them to compete with all the European leagues which have no blackouts, where you can easily follow a single team without being ripped off by the cable cartel. MLS can produce its own content, tell its own stories, and not allow Alexi Lalas or Women’s baseball to butcher and demean the league. Fans can INVEST in a team and not worry they won’t be able to watch their team next year, or the year after. The league still has flexibility to ensure games are on linear TV, and season ticket holders are given free access which will no doubt drive interest in out-of-market games among that group. People see this as a risk – its not a risk, tell me where cable subscriber numbers will be in 10 years? Staying on linear is a risk, moving to streaming is only getting ahead of the curve.

    • Roberto

      June 16, 2022 at 8:06 am

      Great comment. I do hope that there is still a cable aspect. For now, there must be way more cable viewers then steamers. Your are correct, Mercator, over the next years that will change. But as others have mentioned, it would be a big mistake to just leave the cable and OTA people behind.

      • Michael

        June 16, 2022 at 4:25 pm

        I don’t understand why people think there will be no TV games. Just in the article Chris said they are negotiating the TV deal now. I have read in other articles that there will be 25 – 30 games on TV in English. That is basically the game of the week. There are only 35 or 36 on the air now. Basically no difference. The only difference is that they moved from ESPN+ to Apple TV for more money and more Marketing. As for the “Non-Exclusive” part, I do see that. With La Liga and Bundesliga the company that is broadcasting the game on ABC is the same company that is streaming it. With this arrangements there will be two different companies…competitors in fact.

    • Tucson Sounder

      June 16, 2022 at 12:51 pm

      Wow what a great analysis. I’ve read three other articles on this and have learned more through your comments than any of the articles. Thanks for putting in the time to dissect this deal.

    • Michael

      June 23, 2022 at 11:58 am

      I agree with your assessment. Since you mentioned Serie A and La Liga I wanted to lookup kind of contracts they get in their domestic rights. I know this is apples & organges…but it was worth the look. I couldn’t find the current ones for Serie A but for La Liga, DAZN + Movistar Plus won the Spanish Domestic Broadcast Rights to Spain’s La Liga for 5-Year, $5.6 Billion Deal. This makes since. Soccer is the number one sport in Spain so there are millions more soccer fans there than here…so it make since to have a short term deal there because the demand is never going to be go down you you can play the market every 5 years. In addition since they are more established league they can sign international deals for several foreign countries as well. What I have seen is that the foreign media rights were longer term (just like the MLS), because they are not the main league in those countries. It was more important to have a stable broadcast so that they aren’t as easily replaced. That is what you see with La Liga’s US contract. They signed a 8 year $1.4 billion dollar deal. The contract is longer, because they don’t have the leverage the way they do domestically…so they get as much as they can, and the broadcaster has the leverage to make the deal longer. The equivalent that I can think of in the US is when the ACC signed a 20 year contract in 2016 that will not get them the raise in the market as fast as others….but they will guarantee their place in the scene and make it almost impossible to lose any of their teams to another league. The opposite example of this is the Big Ten conference. They have a much larger fan and Alumni Base creating a much larger demand. They only signed a 6 year contract from 2017 – 2023…and now they are in the midst of a negotiation that will double their revenue from current $500 million per season to $1 Billion per season. Their popularity gave them the leverage to do that. I am sure 5-6 years from now they will be ready for another big payday all over again. The point is whether by self reflection, or by the Market telling them so…MLS is not the big dog lack the leverage to force another big paycheck in the near future…so it was better to take the “ACC” or “La Liga Foreign” route and get a contract for the most money that they can get now. The broadcast in return had the leverage to extend the contract over a longer time so that it is profitable for them. They now have 10 years to Market, Build, Draft, negotiate in an effort to build their demand. The ball is in their court. No more excuses. It could happen. Look at the resurgence of the NHL. It has slipped into a regional sport but they are becoming national again. Their first step was to cater to their existing fanbase. I believe that is what this deal is doing. Take care of home first, because you start worrying about other houses. Remember, 99% of the people that complain about loosing casual fans are people that don’t even watch MLS in the first place.

  4. Leo

    June 15, 2022 at 11:33 pm

    When you put into perspective that the deal includes the international broadcasting rights, it feels like paying $250m/year was a bargain for Apple TV. MLS is going to be around 500games/year. To receive only $250m/year worldwide in 2032 sounds bad business. This risky movement NEEDS to be to increase viewership. I hope they won’t make the harakiri of setting the price more than $5 (I would directly give MLS for free worldwide the first year).

    • Yespage

      June 16, 2022 at 11:54 am

      I doubt they’d get much if anything for foreign broadcast rights. The MLS is not the EPL.

      • Mario Garcia

        June 23, 2022 at 12:14 am

        Worldwide rights are not worthless, Canada rights alone is/was 15 Million. Not likely to be repeated with Apple having the world wide rights.

        As for the comment about Apple handling personal data about the customers, not likely, in fact their publicity critizes heavily google for selling customers data.

        Overall I’m happy with the deal. Some games will be free, service will be available worldwide, not forced to pay for Apple+.

        • dave

          June 23, 2022 at 9:17 am

          @Mario, great point re “As for the comment about Apple handling personal data about the customers, not likely, in fact their publicity critizes heavily google for selling customers data”
          .
          Apple spent years positioning themselves as the privacy and security option. A major ad campaign shows iPhone zapping creeps that track you 24/7/365. Apple have been more hesitant than many about third-party ads, especially targeted ads. If Apple were to share customer data with MLS (or others), it could jeopardize a core of their value proposition. Will be interesting to watch how Apple navigate all this as they move deeper into sports

    • Michael

      June 16, 2022 at 4:29 pm

      It is absolutely great business if you take into account that they were only making $90 a year before this, and FOX and ESPN declined to even bid that this time…they were very smart to take what they could get.

      • Mercator

        June 16, 2022 at 4:50 pm

        It’s even lower than that since the $90 million deal was bundled with the national team rights. Apparently they took about $25 million from that deal, so the whole league is getting about $65 million. And most teams are still PAYING for local broadcast production, so net is closer to $60m I would guess. At 30 teams that only $2 million a year from Broadcast.

        Apple is paying $250 million, and full MLS production is estimated to cost about $60 million a year. Assume no other revenue and that’s $190 million across 30 years, or a bit north of $6 million a team. So the average team is probably tripling their revenue on the base deal alone, before we include anything MLS can get for the linear TV rights, sponsorships, subscriptions, etc.

        That’s not bad business at all when the other broadcast partners didn’t even bid for these rights apparently. Garber pulled one out of his hat – he secured the bag, linked the league with the best partner in sports, increase accessibility for younger consumers, and boomers will still have games on TV. MLS did quite a bit from a poor negotiating position.

        • SteveK

          June 16, 2022 at 6:46 pm

          Just have to say Mercator, again, that you are all over this:

          “That’s not bad business at all when the other broadcast partners didn’t even bid for these rights apparently. Garber pulled one out of his hat – he secured the bag, linked the league with the best partner in sports, increase accessibility for younger consumers, and boomers will still have games on TV. MLS did quite a bit from a poor negotiating position.”

          Did anyone here think MLS would get anywhere near ESPN La Liga money (net) two weeks ago? I certainly did not.

        • raksiam

          June 22, 2022 at 9:51 pm

          How do we know Apple is “the best partner in sports”? Isn’t this pretty much their first foray into sports? Not saying they won’t be, but a lot is going to depend on how they price this product. Is Apple going to try for some premium price? Or will they try to build audience? Obviously ratings are minuscule now on Fox and ESPN. I’d guess that the locals are almost 0. Do we know what the league-wide season ticket total is? MLS is going to give away subscriptions to those people. How many paying customers are they expecting or hoping for? There’s a reason Fox and ESPN had so little interest in MLS games.

  5. Chronos

    June 15, 2022 at 10:35 pm

    Are they gonna blackout home teams? If not, then it might actually help grow the league, since young people are not so big on linear TV. If not, then I don’t see how they expect to get a new generation of fans.

    • Marc

      June 15, 2022 at 11:20 pm

      There are no local blackouts, all of the games in-market, out-of-market, and even the national games that will play on linear tv such as (ESPN and Fox)

      • Chronos

        June 16, 2022 at 5:39 pm

        Thanks for the reply – that’s good news. Heck, I might even watch some Rapids games, especially since I assume the Rockies, Nuggets and Avs games will remain unavailable (RSNs have almost completely eliminated my interest in these leagues).

  6. Dan

    June 15, 2022 at 8:38 pm

    Big win for MLS, actually. The app will be a paid add-on, so there is still a ton of value in a linear TV package. Very few casual fans will pay for the service, so the network TV partners will still have linear TV exclusivity; and that may be enough.

    ESPN and TNT don’t seem to care at all that they are non-exclusive for a large percentage of their NBA and NHL broadcasts, often sharing the stage with the team’s regional sports network. I know, I know… the NBA has a much larger audience. But the point remains; they are willing to be a non-exclusive partner. And I doubt the audience numbers for ESPN’s MLS broadcasts will drop with Apple airing games.

    Moreover, this is a content play for Apple and a chance for the league to grow its brand with storytelling — not just games. I believe that Apple will help create an audience for MLS that did not exist before. Apple does not have full exclusivity either, so MLS can still add broadcasters around the globe.

    The mark of success will be if the next US linear TV deal— the one following the World Cup 2026 — is a lot more enticing to the major networks. I think it will be. But by then, I expect Apple to be a major sports content provider in its own right.

    • Edwin

      June 16, 2022 at 11:17 am

      Great point at the end I do think there is alot of thought shock around this deal with many thinking MLS was headed for a disaster deal with little money.

      The fact that they’ll still have games on ESPN and other networks is a win. People aren’t focused on your last part and are focusing on the Apple 10 year part. MLS still will have a linear deal to renogiate around the 2026 World Cup.

      Don’t see how this is a bad deal. Off top they get a minimum of $250m plus whatever they get from the linear package. Then they get to do the linear deals again hopefully in a stronger position to cash in after the 2026 WC.

  7. Eddie

    June 15, 2022 at 8:30 pm

    Turner sports may drop out of bidding on MLS and which means who is going to get the MLS liner network in 2023 and beyond?

    • Marc

      June 15, 2022 at 11:56 pm

      So far in rumors, it’s just Univision and ESPN. Honestly, I was pulling for Turner Sports to get the rights given how well they work with the NHL this year.

  8. dave

    June 15, 2022 at 7:46 pm

    Thank you to the WST team for the enjoyable content on this topic
    .
    My current thinking aligns with “Apple executives would have known the difficult position MLS found itself in, and the Cupertino-based company took full advantage”. I see the win for Apple – partly this deal as a stand-alone, partly what Apple learns about the business model and whether to someday make an aggressive global play for a marquee asset like NBA
    .
    The benefit to cord-cutters is obvious as is the synergy with a core MLS target audience. Sweeteners (access for season ticket holders, cheaper price or extra free games for Apple TV+ customers, etc.) may push a subset of MLS fans to cord-cutting and/or Apple ecosystem. For another subset of casual fans, streaming-only may dampen already modest interest. TBD what linear looks like and whether it drives synergy and revenue for MLS and Apple
    .
    I am still debating with myself on whether this is good or bad for MLS. It is good that MLS avoided a catastrophic outcome. But with MLS on the hook for production, this could be as low as a net $150-$200 million per year deal or $5-$7 million per team per year. Feels extremely light compared to expectations implicit in many of Garber’s historical comments

    • Edwin

      June 16, 2022 at 11:20 am

      The production bit is overblown when you add in 4-5 yr linear deals. MLS has gotten a great deal Without the linear that wouldn’t be the case saying that as a big MLS fan.

  9. Arthur

    June 15, 2022 at 6:51 pm

    This seems like a win-win. MLS has needed a partner who is motivated to invest in the league. The ten year term gives Apple reason to do so, with time to reap the benefits. If it takes off, MLS will share in some of the revenue.

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