Why an Apple-NFL Sunday Ticket marriage didn’t come together?

Why not nfl take a bite of the apple?

The NFL looks set to land another mega media deal this week with the league close to selling the rights to Sunday Ticket to Google’s YouTube and YouTube TV, moving the package of games out of the market into the streaming universe.

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NFL close to deal with YouTube for rights to Sunday Ticket

But for some time it seemed that it would be Apple that would bring the popular Sunday Ticket fully into the digital universe (current DirecTV allowed broadcasting in areas where their satellite dishes were not feasible). The NFL longed to be in business with arguably the most important company in the world and spent much of last year trying to make that happen. And the deal seemed natural for Apple, which is trying to grow Apple TV Plus.

Earlier this year, the NFL secured a sponsorship from Apple for the Super Bowl halftime show, but talks with the media broke down several weeks ago. Why?

There are some obvious answers. Apple reportedly wanted to pay less than the NFL was seeking so it could offer the product at lower prices than DirecTV, but the NFL’s contracts with Fox and CBS didn’t allow it (Sunday Ticket’s lower prices could steer viewers away from Sunday afternoon network windows). DirecTV’s Sunday Ticket deals start at around $300 per season.

Seahawks catcher DK Metcalf at an NFL Sunday Ticket event in 2020. This will be the last season of the package on DirecTV, which has carried it since 1994. (Peter Barreras / Associated Press)

Furthermore, Google’s media strategy is stronger than Apple’s, with YouTube TV being a growing multi-channel digital platform, and YouTube itself with 2.5 billion monthly users.

“The other tech companies are much more advanced in terms of their business model for media, for broadcast,” said a person close to the NFL. “Apple is very advanced in the media with music, but the other companies that are, you know, Amazon is much more advanced. Google and YouTube are much more advanced. Apple is really behind.”

Apple and the NFL also couldn’t agree on whether the company would get the right to distribute Sunday Ticket on platforms that don’t yet exist. Apple is investing heavily in virtual reality and augmented reality, nascent platforms where sports are hitherto largely unseen. As a result, Apple wanted what are known as known and unknown rights, people familiar with the NFL and Apple said. In other words, there is no known VR marketplace for Sunday Ticket, but it could one day.

Imagine a virtual reality headset that gives fans a Sunday Ticket experience where it’s like they’re watching from the 50-yard line seats, said Tom Richardson, a senior vice president at Mercury Intermediate and an adjunct professor in the sports management program. from Columbia University. Such a platform may seem a long way off, but Richardson said it could arrive in the next 24 months.

“It’s a well-known fact that Apple is poised to succeed in AR and VR,” Richardson said. “And it’s been widely reported for the last two years, ’23 could be a big year. So I suspect that as when they’re looking at multi-year deals… they’re looking at what could be a very different technology environment, a consumer electronics environment by the end of the decade at this point, certainly some potentially very large growth. in the world of immersive media experiences.

Richardson in the 1990s worked for the NFL and NHL, and recalled similar situations that arose in the newly emerging digital world when companies asked if the media rights being traded were good for showing on “everything.” And, as now, the answer was no.

“The league doesn’t like to compromise and Apple, as a $2.5 billion company, whatever it is now, obviously has its own way of doing business.”

Apple’s agreement with Major League Soccer to broadcast all of its games is believed to have open language in their agreement. MLS He did not respond for comment.

Why would the NFL disagree with “unknown” language in the contract? For one thing, it has never done business that way, giving away rights beyond those specifically outlined. But you can also view future AR and VR platforms as new media categories that deserve separate treatment.

It couldn’t be determined where Google’s pending settlement on this issue will come down, but given that it was such a big deadlock between the NFL and Apple, it’s hard to see the league budging. Google has its own AR and VR efforts.

apple too asked about broader rights that were available.

Patrick Crakes, a former Fox Sports executive, said Apple and the NFL were never on the same page. “So (Apple) kept learning things, like, ‘Well, we want to do a five-year tenure.’ ‘No, you have to serve a 10-year term.’ ‘We want rights all over the world.’ ‘No, you can’t have those.’ We need some exclusivity. ‘No.'”

Sunday Ticket’s value has also declined for fans over the years, as more games previously aired only locally, making the away-from-home package valuable to fans outside of their home team’s market, it had decreased with more domestic windows.

“When Sunday Ticket came out (in 1994), there were clearly big games you were going to miss every week,” Crakes said. “Okay, now we have, you know, three or four national windows later in the year. You have games on Saturday, you have games on Christmas. I mean, there are all these games everywhere and you have flexible scheduling that makes sure the biggest and best games will end up, you know, certainly Sunday Night Football, next year we start hosting it with Monday Night Football.”

Nearly 30 years ago, when DirecTV launched Sunday Ticket, there were no Thursday Night Football games sucking up games from the Sunday afternoon quiz roster, or the NFL Network with its handful of exclusive games. Those TNF games are now streamed by Amazon, which did a late push for Sunday Ticket.

The NFL was seeking much more than the average annual payment of $1.5 billion received from DirecTV, a number many pundits shrugged off because the satellite operator lost money on the lower number. But a report Wednesday in SportsBusiness Journal says the NFL will get $2.5 billion (it’s unclear if that includes the bar and restaurant market, which could be cut out of a deal).

It would not be the first time that the NFL surprises the experts. When the league bought the TNF package, it was taking in about $650 million a year, and current Fox and other traditional players weren’t bidding. Amazon picked it up for $1.1 billion a year, proving the power of NFL content.

One thing is clear: Apple, which nearly created the personal computer market and then the smartphone business, will be fine and find other ways to grow its Apple TV Plus without the glittering lure of the NFL.

“Apple is Apple,” said Richardson, who in the 1980s wrote for what he described as an Apple magazine. “And they always seem to figure it out.”

(Top photo: Scott Olson/Getty Images)

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