Apple is looking to become a major player in the sports streaming arena, having already bought the rights to air MLB and MLS games. Now, the tech giant is among companies looking to secure rights to the NFL Sunday Ticket subscription service, which is one of the biggest packages in sports at the moment.
DirecTV currently owns the rights to Sunday Ticket – that has been the case since 1994. However, the deal is set to end after the 2022/23 season and it’s reported that the satellite TV service is unwilling to pay the NFL what they’re looking to earn from the service throughout the duration of a future deal.
Sunday Ticket allows subscribers to watch all out-of-market football games on Sunday afternoons.
“It’s called the NFL Sunday Ticket package, and they call it an out-of-market package,” Sports Business Journal’s John Ourand explained to npr.org last month. “Let’s say you’re a football fan of the Minnesota Vikings and you happen to live in Tampa, Florida. This enables you to pay around $300, $400 and you’re guaranteed to see every single Minnesota Vikings game regardless of what’s shown on your regular broadcast channel.
“This is a package that DirecTV has held since it launched back in 1994. And the NFL and even DirecTV executives really credit this package for helping DirecTV become as big of a satellite distributor as it is by bringing a lot of young, well-heeled sports fans that really wanted all of this content. And now that relationship is coming to an end. DirecTV has said that it doesn’t want to pay as much as the NFL wants it to pay, which is about $2 billion a year.”
Apple is keen on getting rights to the service, with DirecTV having tried to get out of the contract two years ago as they stopped making money off of it. But the former stands to benefit a whole lot should they secure it, though it could prove a difficult road.
It’s been reported that the iPhone manufacturers are facing competition from Amazon, Google, and Disney, so it will be interesting to see who wins the bidding war. Apple has already struck it big with the NFL as they will be the Super Bowl’s halftime sponsors next February. The game will be played at the State Farm Stadium in Glendale, Arizona, and Arizona betting apps are sure to be ablaze with activity in the lead-up to the game.
Should Apple score another win by landing Sunday Ticket, it’s not a given that they will rake in huge profits. DirecTV is currently paying around $1.5 billion a year and the new rights owners will have to pay at least north of $2 million. The company would be able to boost the current subscription base of 2 million but would need to bring in an additional 6 million users just to break even if they are to keep the current $300 price.
“The NFL is going to these new companies, and they’re promising, look what we did with DirecTV back in 1994,” Ourand adds. “If you’re trying to build out a video, we can help you build a video. So a service like Apple TV, which is trying to get more into sports, you know, they can take a look at this and say like, OK, we’re not going to make money off of this as a package unto itself, but we are going to increase the number of people that subscribe to our service. They’re going to start to watch other things. They’re going to start to stay within that service a lot more and watch entertainment programming or, you know, other sports programming. And then they have you hooked.”
Of course, Apple has a huge advantage over DirecTV in that users do not need a satellite dish for Apple TV+. And, while the average NFL fixture garnered 17.1 million views on average, the number of off-market viewers is a lot lower.
Amazon is paying the NFL $1 billion a year for Thursday Night Football and ESPN is paying $2.7 million a year for Monday Night Football. The likes of FOX, NBC, Paramount’s CBS, and Comcast are all understood to be paying $2 billion for other games and will continue to do so.
Apple could simply add Sunday Ticket to its current subscription, which costs $4.99 monthly. While this would certainly boost the number of subscribers, they would need to bring in an additional 125 million users to break even. That would be quite risky.
They’d probably still be able to attract mass signups by doubling or even tripling the price of their current service if they’re going to offer out-of-market football on a Sunday, however.