Apple’s NFL Sunday Ticket Interest Draws Skepticism From Analysts

·6 min read

The Information recently reported that Apple has expressed interest in the streaming rights to the NFL’s Sunday Ticket package. Industry observers are generally skeptical that the consumer electronics company is prepared to bid what it will take to win the out-of-market Sunday afternoon games. “Apple has shown no indication to date, outside of a [single] hire (Jim DeLorenzo), that they have serious sports ambitions,” said Phillip Swann (publisher, TVAnswerMan.com). “They also have not shown any real indication they want to be a super major player in streaming.”

But that has not stopped many from thinking about what it would mean if another tech giant were to enter negotiations (various reports have pegged Amazon as a favorite to land the package). “To the extent Apple is serious, it [would be] a huge development for the NFL,” Rich Greenfield (media and technology analyst, LightShed Partners) said. “Having both Amazon and Apple [competing for Sunday Ticket rights], given what is happening to the traditional legacy media companies, [would be] a really big deal for the future of sports rights and the future of NFL rights.” Apple declined to comment for this story.

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Our Take: To be clear, the industry observers we spoke to weren’t surprised to learn Apple engaged the NFL in discussions at Allen & Co.’s recent Sun Valley gathering. “Any company with a significant streaming service is going to show some [level of] interest in the package. They would be crazy not to,” Swann said. But the TV Answer Man was quick to point out that there is a difference between Apple kicking tires and emerging as a serious bidder for the Sunday Ticket package. “Companies talk all the time,” Swann said. “You could run 20 stories a day about [companies] being in talks. All they are doing is due diligence.” For what it’s worth, The Information article states Apple “isn’t seen as a serious contender for the rights.”

The absence of existing sports programming in the Apple TV+ portfolio is the primary reason why Swann doesn’t see the SVOD streaming service as a viable landing spot for the package. “It begs credulity to think the first step [Apple] would take in licensing sports would be Sunday Ticket,” he said. “It is kind of like saying [a player] that just came up to the majors from class-A [minor league ball] is going to hit a grand slam in his first at-bat.” He pointed out that Amazon, Peacock and ESPN+ all acquired some lower-tier sports rights before making their first big splash.

The lack of capital Apple has spent on content acquisition to date also leaves him doubtful. Remember, DirecTV reportedly pays around $1.5 billion/year for the package now. Even if the rights were split among several companies, the price tag is going to be significant—and likely out of their content budget. “[Apple has] never really shown that kind of ambition for streaming. Although they do original programming (see: Ted Lasso), they are not paying for a lot of—or any—catalog programming,” Swann said.

While Apple does not have a sports programming portfolio on par with the competition, Greenfield makes the argument that Sunday Ticket would be a sensible acquisition for the tech giant. He reasons the NFL package would support the company’s ambitions to “drive adoption of Apple TV+” and align nicely with their premium brand. “Apple TV+, in many ways, wants to be HBO-like in terms of content quality. So, attaching the pinnacle of sports content in [NFL games] would be an interesting way to [achieve] that,” he said.

Swann acknowledged that the addition of Sunday Ticket would likely lead to an influx of Apple TV+ subscribers–at least during football season. But he says the lack of sports programming within the portfolio means Apple wouldn’t receive nearly the bang for their buck that their competition would with the same package. “If you’re going to be [spending] to bring all of these sports fans under the tent, you want to give them a reason to stay,” he said. “Fans may sign up and watch on Sundays in the fall. But that’s going to be it. [Apple] isn’t going to enjoy the ripple effects of subscribers banging around their menu.” Churn could also become problematic once the NFL regular season ends.

DirecTV currently holds the broadcast rights to NFL Sunday Ticket (expires in 2022). Few believe the satellite provider will retain them exclusively. “It makes the most sense financially and logistically [to split the rights],” Swann said. “The NFL can reach the most people that way and make the most people happy.”

But while Greenfield and Swann agreed the package is likely be split up, the two had differing opinions on if DirecTV would ultimately be one of the companies selected. “They’ve already pretty much said that they will not [bid],” Greenfield said.

Swann didn’t get that message. “Everybody has written DirecTV off. People think because they are building the company with a private equity firm (TPG), that the [costly] rights are going to be left on the curbside. Well that is not the case. [TPG] is going to want the company to still be valuable in a year or three because they’re going to sell it off, and DirecTV is more valuable with Sunday Ticket than without it. The drop-off [without it] is a far one from where they are now, too,” he said.

Looking at it strictly from the NFL perspective, there would seem to be value in finding a way to keep DirecTV in the fold. “DirecTV has been a good partner for the league as they have been able to serve rural areas where internet is not really accessible,” Swann said. “If [the NFL] doesn’t include a [satellite provider], there is going to be a problem in rural areas or areas with spotty internet service. Some people think there could be [as many as] 40 million homes that don’t have much internet at all. That would be a big chunk of the [Sunday Ticket] audience to lose.”

DirectTV has also helped the league effectively reach bars and restaurants (a lucrative category for Sunday Ticket), a task that would become harder if the service were exclusive to a streaming company.

Swann ultimately believes the package will be split between a TV company, a satellite company (DirecTV) and a streaming partner. He pointed to Comcast and Peacock (a division of NBCUniversal, which is owned by Comcast) as the names to keep an eye on. “Peacock is the sleeping giant in this. They have the money. They have the motivation to build something, and they are constantly adding live sports. That is not a coincidence,” he said. “They are building a live sports powerhouse over there, and [the addition of] Sunday Ticket would be a game changer.”

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