Tuesday, June 14, 2022

MLS’s $2.5 Billion Streaming Deal With Apple Is Not So Great For The League via @forbes

Sharing this from Forbes Magazine, today:



MLS’s $2.5 Billion Streaming Deal With Apple Is Not So Great For The League

Mike Ozanian Forbes Staff

Traffic cop at the intersection of money and sports

Jun 14, 2022,01:59pm EDT

Major League Soccer and AppleAAPL +0.6% have come to terms on a 10-year agreement to stream its games beginning with the 2023 season that guarantees MLS far less revenue than it was expecting and carries far more risk for the league.

Apple is guaranteeing MLS $250 million a year, according to Sports Business Journal. That’s 2.8 times what the league gets in total from Fox, ESPN and Univision. A nice bump, to be sure, but not that long ago MLS was looking for $300 million a year.

As part of the deal, MLS will have to forego local media rights. That needs to be subtracted in order to give a fair assessment of the deal. Assume each of the 28 MLS teams currently gets an average $3 million for local rights, so slice $84 million a year from the Apple tie-in. That makes it worth less than $170 million a year.

To top it off, season-ticket holders to MLS games will get a free subscription to MLS content on Apple, and MLS will bear the cost to produce the games.

Sure, MLS is still negotiating with linear TV networks, including ESPN and Fox, according to SBJ. However, those games wouldn’t be exclusive to the broadcasters. They would simulcast with Apple, and therefore not command much money.

As one media-rights consultant told Forbes, “MLS could not get any established media company to pay a fee above $250 million, so MLS had to accept an upside risk that other Tier 1 leagues and sports have not had to accept to achieve the rights-fee goals. It also places MLS content behind another streaming paywall, Apple+, which only represents 1% of all video minutes consumed across all platforms.”

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