By John Gruber
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Matt Tamanini, writing for The Streamable:
According to one industry insider, Apple might have already secured the most sought-after rights package in all of broadcasting and is just waiting for the most opportune time to announce it. In a Q&A article for Puck News, the entertainment news outlet’s founding partner Matthew Belloni said that while his sources are telling him that Apple is in the driver’s seat to secure the NFL Sunday Ticket rights beginning in the fall of 2023, others are saying that the deal is already done.
“One source told me this weekend that the deal is actually done,” Belloni wrote, “and is being kept quiet at Apple’s request, which I haven’t confirmed and don’t know for a fact; Apple isn’t commenting.”
If this is in fact true, it would line up with how Apple likes to dole out information. Despite reports abounding for months, Apple CEO Tim Cook chose to hold the announcement of Major League Baseball coming to Apple TV+ for one of their previously scheduled keynote presentations.
I know nothing about these negotiations between Apple and the NFL, but I do think it’s true that if Apple has already secured these rights, they’d prefer to keep the deal under wraps until a time of their own choosing to announce them. But it doesn’t seem feasible to keep the deal under wraps until the NFL’s 2023 seasons starts next year. Even if Apple and the NFL keep their mouths shut, the media industry is gossipy as hell, and word would likely leak from other parties, like Amazon and Disney. Let alone DirecTV, which is going to have to tell their longtime subscribers eventually.
NFL Sunday Ticket, as currently offered from DirecTV, is by anyone’s standards expensive:
The streamer’s baseball package only includes two games per week, while the NFL package would allow fans to watch all out-of-market games. Currently on DIRECTV, the Sunday Ticket’s To Go plan costs $73.49 per month during the season or $293.96 for the season while their Max Plan — which also includes NFL RedZone and DIRECTV’s Fantasy Zone — runs $99 per month and $395.99 for the season.
If Apple wanted to make one of those options available to all subscribers, it would undoubtedly require an increase in their monthly subscription fee, or the more likely option is that they would keep the monthly fee at the low $4.99 level and make Sunday Ticket available for an add-on price. The question then becomes, how much does the streamer charge for the a la carte option?
I don’t know about the “undoubtedly” there. It seems unlikely, I agree, that Apple would pay $2 billion per year for Sunday Ticket rights and then just include those games as part of the standard TV+ subscription, for all users. I think it’s even less likely that Apple would raise the prices for all TV+ users, whether they’re interested in NFL football or not. (TV+ is a worldwide service, for one thing, and in some countries, “football” is a different sport.) But it doesn’t seem impossible to me that Apple would just include Sunday Ticket for all TV+ subscribers, without raising the price. The question is, why does Apple want to stream NFL games? To make money directly from those games, or to get as many people as possible to try TV+ and eventually subscribe?
Some quick back-of-the-envelope math. At $5/month an Apple TV+ subscriber pays Apple $60/year. $2 billion divided by $60 comes to about 33 million — that’s how many new TV+ subscribers Apple would need to add, based on Sunday Ticket alone, to break even on the deal. (For the sake of argument, let’s just say that family plan and Apple One bundle subscribers are paying about $5/month for TV+ content too, as part of their subscription tiers. It also seems possible that the rights for Sunday Ticket might sell for more like $2.5 billion. Half a billion dollars here, half a billion dollars there — it adds up.)
According to the NFL, regular season games last year averaged 17 million total viewers. It’s worth noting, though, that average viewership is driven primary by in-market games, not out-of-market games. Most NFL fans watch one game on Sundays: their local team, via local TV. The games broadcast on your local TV channels are geo-excluded from Sunday Ticket — to watch them, you need to either watch on traditional TV or via a streaming service that includes your local TV channels. “All the Sunday afternoon games except for your favorite team” is not a selling point for most NFL fans.
The top-rated national broadcast, NBC’s Sunday Night Football, averaged 18.5 million viewers per week last year. But Sunday Ticket doesn’t include the Thursday, Sunday, and Monday night national games, which the NFL sells the rights to separately. I’m just including Sunday Night Football’s viewership for context.
So can Apple feasibly get 30+ million new TV+ subscribers just by offering access to NFL Sunday Ticket with a standard TV+ subscription? That doesn’t seem possible. But that doesn’t mean they wouldn’t do it anyway, just to drive TV+ subscriptions by some number of millions of additional subscribers, and by raising awareness of TV+ in general.
If Apple does get the rights to Sunday Ticket, and they do choose to charge subscribers a premium for access to it, I think there’s a good chance that they’ll charge substantially less than DirecTV’s rates — that Apple will still try to make it more of a mass-market play for regular NFL fans, not just for superfans and gambling junkies.
I am reminded of Fox obtaining the broadcast rights for NFL games back in 1993. A few years ago The Ringer put together a good oral history of that deal. Fox spent a then-record $1.6 billion for the rights to the NFC games that had theretofore been broadcast on CBS, and they hired away all of CBS’s broadcasting talent, including John Madden. The point wasn’t just to put the best NFL games on Fox, the point was to put Fox itself on the map, to establish Fox as a peer to the big three traditional networks.
To me, that should be the point of Apple securing the rights to Sunday Ticket. Not just to get NFL games on Apple TV+, but to further cement TV+ as a top-shelf streaming service.