MLS Commissioner Don Garber, Apple CEO Tim Cook and Eddie Cue, Apple’s senior vice president of services, celebrate the new partnership.Apple
Apple has been in talks with Major League Soccer almost as soon as the league’s exclusive negotiation windows with ESPN, Fox Sports and Univision ended earlier this summer. But it wasn’t until about six months ago that MLS executives realized the tech giant was really serious about landing one of the most shocking sports rights deals in history.
It was then that Eddie Cue, one of Silicon Valley’s most powerful company executives, stepped onto the scene.
In a company as hierarchical as Apple, the fact that one of the 12 members of the company’s management team joined in the negotiations signaled unmistakably the seriousness of Apple’s proposal.
“Apple really started to stand out and show commitment at a level that was very much in line with our vision for a late winter product,” said New England Revolution investor and operator Jonathan Kraft. “And then everything focused from there.”
The end result came to fruition last week with a groundbreaking 10-year deal that rocked the entire sports media landscape.
Apple has acquired the rights to stream every MLS match on the new service on the Apple TV app starting next season. Apple has pledged to pay the league at least $2.5 billion over the life of the deal. MLS executives expect to be paid even more, provided the league can reach certain signing thresholds.
As part of the deal, select games will also be streamed for free through the Apple TV app, and another list of games will be available to paid Apple TV+ subscribers.
“We’ve never had the opportunity to work with a league that basically said, ‘Every game, all over the world, and what can we do together to grow the sport, to make everything better for the customers?'” Q said.
Negotiations with Apple, a company known for its secrecy, proved to be different from other media rights deals and potentially served as a guide for other leagues looking to do business with the Cupertino, California-based company.
To prevent news of the talks from leaking, MLS limited the number of people who knew how
Apple’s serious talk began.
MLS Commissioner Don Garber knew, of course, as did Deputy Commissioner Gary Stevenson, President and Deputy Commissioner Mark Abbott and Senior Vice President of Media Seth Bacon. A relatively new broadcasting committee, set up last fall, also took part in the negotiations and led the league’s leadership.
This group is dominated by people with deep media and technology backgrounds, many of whom have extensive experience with Apple. The group included Vancouver Whitecaps co-owner Jeff Mallett, who helped build Yahoo into an Internet giant in the late 1990s and early 2000s; Kraft, a member of the NFL’s media committee that closed $110 billion in rights deals last year; Cincinnati FC investor and former HP CEO Meg Whitman; DC United co-owner Stephen Kaplan, co-founder of Oak Tree Capital Management; and Seattle Sounders investor David Nathanson, a longtime Fox Sports executive.
In April, MLS executives had to tell the board of directors about Apple’s interest, which widened the circle of people who knew about it.
Some reports in May suggested that Apple had pulled out of negotiations. Clearly, Apple hasn’t opted out, but its executives have identified several questions – from marketing spending to simulcasting obligations – that still need to be answered.
Years in establishment
MLS set Table for this type of blockbuster a few years ago, when he told his teams that any local broadcast deals they were getting should not run past the end of the 2022 season.
At the time, MLS was not in a good position with local television rights as only a few teams were making money (LA Galaxy, Seattle, Chicago and NYCFC).
The league wanted to make sure all of its local rights would be available at the same time that its national rights deals with ESPN, Fox Sports and Univision (plus its international agreements) expired.
“The league’s foresight to align their local, national and global rights, which have been sold individually in the past, has allowed them to explore partnerships like the one we ended up with,” said Nathanson, former head of business operations for Fox Sports.
“Commissioner and Gary were peeking around the corner seeing the power of streaming,” Kraft said. “So we as a league said, ‘Let’s get in a strategic position to take advantage of the fact that each of our matches is available worldwide.’
Despite large viewership, expansion, and development of new stadiums such as the arrival of Nashville SC, MLS has not made significant progress in increasing television viewership.getty images
When the league began the process of buying its rights last summer, it faced a tepid linear TV market that was more focused on other rights like the NFL and the Premier League.
Mallett said digital players have been most receptive to the idea of an all-inclusive offer from the start.
“Companies that started with the letter ‘A’ came out on top,” he said. “They understood. Global. It’s clear. Single entry. It’s clear. They focused on the stack, on those building blocks, and that allowed them to draw things faster to really get into that strategic mode.”
The process took significantly longer than the league and committee had expected. Garber told the public to expect news in the first quarter of 2022 that came and went unannounced.
While some industry insiders interpreted the delay as a sign of a low market, the owners attributed the delay to a number of factors, including the unique nature of the Apple deal, the company’s newness in space, and the impact of global events on the market. the company’s main activities over the past few months.
The league’s focus will now turn to securing distribution deals that would allow linear TV networks to simulcast some of Apple’s games. It’s unclear when these deals will be finalized, but the owners are confident the league will reach lucrative deals that will make the MLS product available to potential new fans.
“Our value proposition remains valid for the linear Saturday afternoon on ABC,” Mallett said.
Despite the backing of the top three sports broadcasters ESPN, Fox Sports and Univision, while the MLS posted tawdry attendance numbers and expanded seemingly at will, the league failed to make significant television headway. Matches on Disney-owned networks ABC and ESPN averaged a measly 276,000 viewers in 2021, an improvement over the league’s last full season in 2019.
Fox and FS1 averaged only 210,000 viewers, while Spanish-language telecasts on the Univision networks attracted 284,000 viewers.
Garber referred to this media apathy two years ago when describing the league’s business model.
“We’re completely upside down compared to every other league,” he said at a preseason press conference. “Media, as they relate to our income, is frankly the smallest piece of the puzzle. And I believe, no doubt, that this will change in the future.”
Since the Apple deal last week, the media landscape in the league has certainly changed a lot.