After years of conversation, Apple recently gave the sports industry a clear signal of its interest in the space by hiring Amazon Video’s former head of sports, Jim DeLorenzo, to “head up sports for its Apple TV unit,” according to Recode’s Peter Kafka. Or maybe it wasn’t so clear.
“They hired Jim because they are ready and want to get going,” one rights dealmaker said.
A top consultant, though, wasn’t so sure, saying they don’t expect any major deal from Apple in the next year.
“It says they want to dabble,” one media advisor said.
“I don’t see them dabbling,” a different experienced advisor said.
Only Apple could seemingly hire a point person to develop and execute its sports strategy without his industry peers knowing just what he’s been hired to do. Reading Apple’s tea leaves has become an industry in itself for the tech world; the same is now true behind the sports scenes.
Approaching a $2 trillion market cap, Apple has the theoretical means to do just about anything it wants regarding sports content. Its nearly $200 billion in available cash alone would be, on paper, more than enough to purchase every NFL team—twice. And yet, nearly 500 days since Apple CEO Tim Cook announced the company’s Apple TV+ streaming service, he has not yet landed exclusive rights to any sports action. Hence the intrigue.
Add in Apple’s penchant for corporate secrecy and its reputation for market-altering launches, and you can see why it stands as one of the biggest X-factors heading into a critical rights cycle.
Does Apple want to go big with live sports? Does it want to stick its toe in the water? Does it see a way to serve sports fans without having to sign the big checks required for exclusive games? Does it even have a plan? Some answers finally appear to be on the horizon.
Going back to 2018, an Apple executive expressed some level of interest in acquiring rights to The Match, the head-to-head match play contest between golfers Tiger Woods and Phil Mickelson, but the company decided it was not yet ready to wade into live rights. By that point, Apple was already growing its sports-specific interface for the Apple TV platform and app, delivering notifications for key moments and providing links to games airing on other apps, like ESPN’s. Now comes its best chance yet to acquire rights for itself.
After a relatively fallow period, a panoply of live rights are opening up, starting with the crown jewel, NFL games. Every expectation is that the lion’s share of action will remain on traditional broadcast channels, especially as those businesses now rely on football. But Apple could still get its foot in the door through a simulcast deal like Amazon has had with Thursday Night Football; a limited-game contract possibly built around international games; or a unique retooling of Sunday Ticket, which belongs to AT&T until 2022.
The NFL is already engaging suitors as it plans its partnerships for the next decade, though COVID-19 has thrown the timing of potential deal agreements into question.
Beyond the NFL, rights to MLB, NHL and English Premier League games are expected to be locked up in the next year or so, with a slew of college rights set to free up thereafter. Companies left empty-handed could be forced to wait a decade before those combinations of opportunities come around again.
Apple has recently been tied to speculation about the Pac-12, in particular, with Sports Business Daily reporting in April that executives had expressed interest in the conference’s primary package. But two sources doubted that the West Coast league could provide the type of introduction to live sports Apple is looking for, questioning its international appeal, specifically.
A survey from HarrisX and MoffettNathanson found Apple TV+ usage sat at 7% among streaming households in June, with the report suggesting Apple “reconsider their strategies and options at this point.” Meanwhile, data from subscription analytics firm Antenna shows that 80 percent of the service’s users have come via the one-year free trial offered with new devices.
Apple has not released subscriber numbers. Instead, on its quarterly earnings call last week, Cook pointed to the 95 awards nominations TV+ programming has netted since launching last November.
In its latest bid for selective, mainstream appeal, the company paid $70 million for Tom Hanks’ Greyhound, and set an opening-weekend viewership record in July, according to Deadline. Perhaps more importantly, 30 percent of the viewers were new users. That said, according to Antenna’s data, the signups Apple drew over Greyhound’s opening weekend were less than 60 percent of what CBS All-Access garnered during a late January weekend of playoff football, once again showing the NFL’s appeal.
No tech company has truly found monumental success streaming live sports yet, though.
Amazon’s sports tact has matched its general interest in experimentation and data-driven efforts to this point, with its biggest swing in the US—an exclusive NFL contest—due this fall. Facebook and YouTube meanwhile have targeted sports content in their all-out war for user-generated content. For its part, Netflix has focused on sports documentaries, finding hits like Last Chance U and F1: Drive to Survive.
The so-called FAANGs’ ability to nab live rights is limited by the infrastructure investments required to produce and distribute live games. They also now have to contend with a number of digital businesses being built by traditional broadcasters, such as ESPN+, Peacock, CBS All-Access and HBO Max. With those new services to support, their parent companies are likely to be less willing to share rights with a tech competitor.
If Apple finds itself unable or unwilling to get into the live rights race, it could still become more active in the sports space through its podcast platform, one source suggested. It could also partner with leagues to offer out-of-market games through its TV storefront and go the Netflix route with documentary content to boot. In July, Apple TV+ dropped Greatness Code, a short-form documentary series featuring Tom Brady, LeBron James, Katie Ledecky, Alex Morgan, and others.
“There is a last-mover advantage sometimes,” one sports media consultant said. “You can learn from the missteps that others have made. You can learn from Quibi, and from PlayStation Vue and B/R Live.”
On top of all the other questions surrounding Apple’s sports ambitions—the whats, the whens, and the how bigs—there’s one more as Apple’s stock continues hitting new highs.
“The real question boils down to, Do they even need sports?” one source said. “It seems like Apple is doing pretty well without it.”