Why didn’t the NFL get a bite at Apple?
It looks like the NFL is poised to strike another massive media deal this week with the league poised to sell Sunday ticket rights to Google’s YouTube and YouTube TV, moving its bundle of games out of the market and into the streaming world.
NFL close to deal with YouTube for rights to Sunday tickets
But it appeared for some time that Apple would be the one to take the popular Sunday Ticket entirely into the digital universe (the current DirecTV allowed streaming in areas where its satellite dishes were useless). The NFL has longed to work with the most important company in the world and has arguably spent much of the past year trying to make it happen. The deal seemed like a natural for Apple trying to develop Apple TV Plus.
The NFL earlier this year secured sponsorship for the Super Bowl halftime show from Apple, but several weeks ago, media talks broke down. Why?
There are some obvious answers. Apple reportedly wanted to pay less than the NFL sought so it could offer the product at lower prices than current DirecTV, but the NFL’s contracts with Fox and CBS did not allow for that (low Sunday ticket prices could drive viewers away from the network’s afternoon windows). Sunday). DirecTV’s Sunday Ticket shows start at around $300 for a season.
Also, Google’s media strategy is more aggressive than Apple’s, with YouTube TV being a growing multi-channel digital platform, and YouTube itself with 2.5 billion monthly users.
“Other tech companies are much more forward with their media and broadcast business model,” said a person close to the NFL. “Apple is so far in the media with music, but other companies, you know, Amazon are so far ahead. Google and YouTube are so far ahead. Apple is really behind.”
Apple and the NFL also couldn’t agree on whether the company would get the right to distribute Sunday Ticket on platforms that don’t yet exist. Apple is investing heavily in virtual reality and augmented reality, two emerging platforms where sports are largely unseen yet. As a result, Apple wanted what were called known and unknown rights, people familiar with the NFL and Apple said. In other words, there is no known VR market for Sunday Ticket, but there might be one day.
Imagine a virtual reality device that offers fans a Sunday Ticket experience where it’s as if they’re watching from the seats at the 50-yard line, said Tom Richardson, senior vice president for Mercury Intermedia and assistant professor in the Sports Management Program at Columbia University. Such a platform may seem a long way off, but Richardson said it could come in the next 24 months.
“It’s a well-known fact that Apple is about to get big in AR and VR,” said Richardson. And it’s been widely reported over the past two years, ’23 could be a breakout year. So I guess, like if they’re looking at multi-year deals … you’re looking at what could be a very different technology environment, a consumer electronics environment by the end of the decade at this point, no doubt some growth potentially very significant growth in The world of immersive media experiences.
Richardson worked in the 1990s with the NFL and American Football League, and recalled similar situations arose in the emerging new digital world when companies asked if negotiated media rights were good to offer on “everything”. And as now, the answer was no.
“The league doesn’t like to compromise and Apple as a two and a half trillion dollar company, whatever it is now, they clearly have their own way of doing business.”
Apple’s deal with Major League Soccer to stream all of its games is believed to have open language in its deal. MLS did not respond to comment.
Why wouldn’t the NFL agree to the “unknown” language in the contract? First, you have never done business in this way, giving away rights beyond those specifically specified. But also you might look at future AR and VR platforms as new media categories that deserve separate deals.
It’s not possible to say where Google’s pending deal on this issue will land, but given that it’s been such a blockade between the NFL and Apple, it’s hard to see the league giving ground. Google has its own AR and VR efforts.
Apple also inquired about broader rights than were available.
Former Fox Sports CEO Patrick Krakes said Apple and the NFL never got along. So (Apple) just kept learning things, right, like, ‘Well, we want to complete a five-year period. “No, you have to serve 10 years.” “We want universal rights.” “No, you can’t have those.” “We need some exclusivity.” “No.”
Sunday Ticket’s value to fans has also declined over the years as more games have only been broadcast domestically – thus making the away package valuable to fans outside of their home teams’ market – has declined with more national windows.
“When Sunday Ticket came out (in 1994), it was obvious that there were important games you were going to miss every week,” said Krakis. “Well, we now have, you know, three to four national windows later in the year. You have games on Saturday, you have games on Christmas. I mean, there are all these games all over the place and you have a flexible schedule that ensures that the biggest and best games come out.” And, you know, definitely Sunday Night Football, next year we’re going to start having it with Monday Night Football.”
In the nearly 30 years when DirecTV started Sunday Ticket, there wasn’t a Thursday Night Football game off the Sunday afternoon slate, or an NFL Network with a handful of exclusives. These TNF games are now being streamed by Amazon, which recently pushed out Sunday Ticket.
The NFL was seeking more than the $1.5 billion average annual payment DirecTV received, a figure many experts have cited because the satellite carrier lost money on the lower figure. But a report published Wednesday in the SportsBusiness Journal said the NFL was awarded $2.5 billion (it’s unclear if that includes the bar and restaurant market, which could be separated from the deal).
This wouldn’t be the first time the NFL has surprised experts. When the league shopped the TNF package, it was getting about $650 million a year, and current Fox and other traditional players weren’t bidding. Amazon raises it for $1.1 billion annually, proving the power of NFL content.
One thing is clear: Apple, which created the home computer market and then the smartphone industry, will be fine and find other ways to grow its Apple TV Plus without the NFL’s flashy appeal.
“Apple is Apple,” said Richardson, writing in the 1980s for what he described as Apple magazine. “And it always seems like they figure it out.”
(Top photo: Scott Olson/Getty Images)
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