News recently broke that Apple is one of the companies interested in acquiring the rights for NFL Sunday Ticket, the package allowing subscribers to watch all out-of-market games that AT&T’s DirecTV is no longer interested in carrying.
This would be a mistake, even for a service like Apple TV+ that’s desperate for mainstream audiences.
An NFL package would represent quite the boost, on paper, for Apple to gain audiences and subscriptions. But the approach for Sunday Ticket should be tempered. Currently the package costs DirecTV $1.5 billion a year, and VIP+ estimates the NFL would be asking for an increase of at least an additional half a billion dollars annually.
Spending $2 billion a year for a package that only hardcore fans would subscribe to is a big pill to swallow even for deep-pocketed Apple, which has always been a very disciplined buyer, although the company can afford not to be. The way around this would be for the acquiring service to follow VIP+’s prior suggestion and offer it at a severely discounted rate —it currently costs $294 per season — making up the difference with advanced advertising.
If Apple was unwilling to subsidize this cost, then asking fans to shell out for Apple TV+ (currently $4.99 a month) plus an additional $300-$400 for Sunday Ticket may not fly, especially as the Apple TV app is available only on newer smart TVs and connected devices, and not everyone will have a device carrying it.
Instead of Sunday Ticket, Apple should ask the NFL about the digital rights package Verizon held until it sold Yahoo Sports to Apollo Global Management.
Unlike other NFL rights, this package, which includes coverage of all televised regular-season games on phones, tablets and computers, is underpriced at $500 million. VIP+ estimates the new package will double in value, to $1 billion, but this would still be a steal when compared with the increases seen for the television packages.
True, Apple TV+ subscribers wouldn't be able to watch games on TV like all the other programming on the app, but just having the NFL on phones and tablets makes it worth it. If Apple wanted to make the package exclusive to Apple TV+ on phones and tablets, much as the original package in 2013-17 was only for Verizon subscribers, a premium could be added to the price. The NFL is not against a package restricting access to the public, they just make you pay more for the privilege.
This occurred in 2006 when ESPN paid double the prior rights when taking Monday Night Football to cable TV — all other packages then either saw no increase (Sunday Night Football) or a much more modest increase of 25% (AFC package) or 30% (NFC package).
Apple has more than enough cash on hand should CEO Tim Cook want to go all in on Sunday Ticket, but it doesn’t have a great path to profitability. Far better to leave that to a service like ESPN+, which is looking to become the sports version of Amazon Channels, with out-of-market packages for the MLS and NHL on the books as well as being the PPV distributor for UFC and Top Rank Boxing.
If Apple really wants an NFL package to gain mainstream attention for Apple TV+, then it makes sense to intercept any plays in progress on the digital rights. It will have stiff competition, with Amazon in particular a company that should be trying to snatch these up, but it would be a much better fit than Sunday Ticket.
A digital rights package would also fit with the original ethos of Apple TV+, which was to provide Apple users with value-added subscriptions like Apple One. Given Apple’s high domestic iPhone market share and the fact that the digital rights package has a wide reach being free, there would be a very large number of potential viewers, unlike with the expensive Sunday Ticket.