Why Apple Is Betting 2.5B on Major League Soccer 🍏⚽️🇺🇸
Plus Serena Williams is back and Usain Bolt just won a football trophy.
Welcome to Athletic Interest.
In this week’s newsletter, we will discover how Apple TV is set to shake up football broadcasting forever. We will also learn why some people want Jurgen Klopp to quit and how one guy has taken Nike’s slogan a little too far!
Anyway, back to Apple TV.
Apple has agreed to pay MLS a minimum of $250 million each year over the next decade. In return, Apple will have the exclusive rights to stream all MLS matches online (potentially across the entire world.)
When you factor in the money coming from traditional linear TV and other international deals, MLS could take home around $300 million each season.
While this number pales in comparison to the global TV income of other major leagues, it still represents a 300% increase from the previous deal.
🏈 NFL - $10bn
🏀 NBA - $2.6bn
⚾️ MLB - $1.75bn
🏁 Nascar - $820mn
⛳️ PGA - $700mn
🏒 NHL - $625mn
🏈 College - $470mn
⚽️ EPL - $450mn
⚽️ MLS - $300mn
⚽️ La-Liga - $175mn
All figures per annum and for U.S. broadcasters only
The extra money is not the only change. Apple will stream every single game with no blackouts. Local broadcasts will be stopped in favour of one central production with the option to have local radio provide the commentary. Apple even plans to stream some MLS games for free on the Apple TV app.
On the face of it, it looks like Apple considers MLS to be an attractive product. The reality is a little bit more complicated.
MLS viewership on traditional TV is stagnating at around 270,000 viewers per match.
That is half of the average for a Premier League match in the U.S.
The NBA records about 10x the viewership of MLS (3m average)
The NFL, the biggest sport in the U.S., averages 17 million per game.
While these other leagues earn far more money from TV, Apple’s 250 million a season deal does seem a little overpriced. In fact, there were reports that MLS was struggling to find a broadcasting partner before Apple swooped in with a big-money offer.
So, why is Apple betting so much money on MLS? The answer involves Lionel Messi, The World Cup, and Drive to Survive.
For many years, U.S. commentators have described football as the sport of the future.
They are not simply referring to the fact that support for MLS, Premier League, and La-Liga has grown, but also to the interesting statistic that U.S. football fans are far younger and more diverse than those of other U.S. sports.
This diversity is attractive to potential advertisers.
While MLS is not enjoying as large a share of this fanbase as the Premier League or La-Liga, Apple clearly feels that future developments could tip support towards MLS and cause a surge in popularity among younger audiences. Apple has locked in 10 years of exclusivity over MLS and such a shift in popularity would make the $2.5 billion deal seem entirely worthwhile.
So, what makes Apple so certain of this shift?
Lionel Messi looks set to join Inter Miami at the end of his current deal with PSG.
The United States, Canada, and Mexico will host the 2026 World Cup - the largest sports event on the planet - and interest in football should experience a bump.
The U.S. national team - which is performing well - features a number of young stars from MLS teams.
Apple will not simply wait for events to turn in their favour. They spend billions each year on original content. This includes their widely successful Ted Lasso football comedy series and numerous documentaries.
A link-up between Ted Lasso and MLS - the show already has an agreement with the Premier League - would be an easy way to build hype. (Roy Kent moving to the MLS as a coach anyone?)
Apple could also consider producing a behind-the-scenes documentary similar to the Drive to Survive series that increased U.S. interest in Formula 1 by 54% in just 12 months.
This strategy of combining live sports with supplementary content might be the future of sports.
Netflix is reportedly looking at bidding $100 million to take on the U.S. TV rights for Formula 1. This would allow them to create an F1 ecosystem where viewers could watch both Drive to Survive and live races all in one place.
If anything, Netlfix probably regrets not purchasing the live tv rights sooner. Its work on drive to survive increased the audience for F1 on ESPN, if Netflix had the rights - which cost around $5 million a year since 2019 - they would have seen a huge increase in subscribers (they certainly need that right now!)
Perhaps Apple noticed the power of the sports documentary, identified MLS as the perfect league to grow, and purchased the rights ahead of time to ensure that it profits from future growth.
European leagues will be looking at this development with a level of intrigue. Domestic rights in the Bundesliga, Premier League, and La-Liga have stagnated or even shrunk. If those leagues plan to grow their revenues through broadcasting they will hope that the likes of Apple, Amazon and Netflix become more interested and provide competition for the traditional broadcasters.
Interestingly, Chelsea has just been purchased by a consortium led by Todd Boehly. Boehly made a lot of money in 2013 when he brokered a deal between Time Warner Cable and the Los Angeles Dodgers to create a dedicated streaming service for the team.
Will fans soon be able to watch Ted Lasso and Jurgen Klopp on the same streaming service? Well, if the MLS gamble pays off, Apple may look across the Atlantic for another opportunity.
Sports Business Bites 🍎
🎾 Serena Williams is going to Wimbledon, and of course, she announced the news by posting a photo of some white Nike trainers on Instagram!
Anyone that has watched our recent video on Serena William and fashion will understand the significance of that reference.
This announcement will have taken a few people by surprise. Williams has not played competitive tennis since picking up an injury at last year’s Wimbledon. Her rank has since dropped to 1,208 and speculation grew of a potential retirement. Despite all of this, it looks like Williams is far from finished. The legendary American will warm up for her Wimbledon wildcard entry by competing in the doubles next week at Eastbourne.
⚡️ Usain Bolt just won an international football tournament…in a team managed by Arsene Wenger and Idris Elba!
The world’s fastest man was part of the World XI that took on an England XI in a charity match for Unicef. Bolt was joined by legendary players such as Cafu, Roberto Carlos, and Joe Cole as well as big-name celebrities like Grimes, Damian Lewis, and Liam Payne. The World XI and England XI were tied at 2-2 after 90 minutes, before Usain Bolt and his international teammates won 4-1 on penalties. By the time the trophy celebrations had begun, the match had earned over $19 million for victims of the wars in Ukraine and Yemen.
💰 Jurgen Klopp has just quit his job! At least that is what Twitter users have been suggesting should happen after Liverpool spent €100 million to sign Darwin Nunez from Benfica. Confused? Well, back in 2016, Klopp was not impressed with Manchester United after they spent €100 million on Paul Pogba (to be honest he wasn’t wrong.)
“The day that spending £100m is football, I'm not in a job anymore, because the game is about playing together,” Klopp told reporters at the time.
While Klopp buying a player for €100 million after making this statement is ironic, you have to keep in mind that he said it six years ago. Football was very different back then. At the time, Pogba’s transfer was the second-highest in history behind Neymar. Since then several players, including Grealish, Lukaku, and Coutinho, have gone for €100 million or more. In many ways, a €100 million transfer today is the equivalent of a €30-50 million transfer in 2016. Looks like Klopp will not need to retire just yet.
👟 What would you do to preserve your favorite pair of sneakers? While most people would simply clean them regularly, one man from Manchester, England has taken some more drastic steps and decided to have his favorite pair of Nike sneakers tattooed on his feet. It took the artist two hours to draw the sneakers freehand and another eight hours to tattoo.
'He's tired of paying for shoes, so he decided he will get his favorite pair of Nikes tattooed on him.’ explained the tattoo artist Dean Gunther. ‘He can see the funny side to it! Definitely a great conversation starter. His wife loves it too.'
Such a bold choice probably took a lot of courage, but in the end, he probably thought ‘Just Do it.’
Neymar only signed for PSG in 2017! In 2016, Pogba was the most expensive transfer ever.