One of the media angles of the hectic college football realignment story is the weakness of Apple TV+ as a viable option right now and its lack of determination, so far, in the sports space. Let’s take a look.
1️⃣ Apple was not a viable option
The Pac-12 teams did not want to be on an exclusive streaming deal. We first broke the possibility of the Pac-12 and Apple in February. In that story, we wrote that Apple would likely want all the league’s games in a deal. Even then, the thought of having a conference on Saturdays just on a subscription streaming service did not make sense.
Diehards will pay for their teams, but the SEC, Big Ten, Big 12 and ACC are all mostly available on major broadcast and cable networks. The Apple deal felt like a way into obscurity. And it seemed as if some university officials were blindsided by it, which is odd because if John Ourand and I knew to discuss it regularly on our weekly podcast, then they should have had more of a clue that it was coming.
2️⃣ Apple’s Wilpon-like offer
The reason all these leagues want Apple to be involved in sports is because it has so much money. If Apple wanted to make the Pac-12 deal happen, Apple could have. It just had to guarantee more money per team. But Apple has a lot of leverage in deals, because sports is just an add-on business that they may or may not be all that interested in. The company is worth trillions, which is not because of deals with MLB and MLS.
In the end, Apple offered a Wilpon-like deal. Under their former owner, the Mets regularly would be in on free agents but make offers that were just below what it took to close deals. Now, we doubt Apple’s motivations were the same as the Wilpons, who wanted to sell that they were trying for the big names to its teams’ fans. But Apple could have topped the $31.7 million per team that ESPN and Fox are paying the Big 12 universities. If Apple had done that, maybe the Pac-12 would have held together, even if the schools were opposed to all-in streaming.
3️⃣ The offer was just good enough to fail
The Athletic’s Stewart Mandel reported the exact terms as five years with each school being guaranteed $25 million per year. If Apple could reach 1.7 million Pac-12 subscribers, they would match the Big 12’s $31.7 million guaranteed. If they got to five million subs, it would be $50 million per school per year. There was an out after three years.
However, we’ve been told the $25 million was before production costs for football, basketball and the Olympic sports. So, being conservative, that probably would cost around $2.5M to $5M a school per year.
Nonetheless, maybe you could entice yourself into liking such a deal, believing it could work — and it might have. But Colorado, Oregon, Washington, Arizona State and Utah decided to take off instead. Can’t blame them from a financial and visibility standpoint.
4️⃣ The MLS blueprint
Apple TV+ wants global subscriptions. Eddy Cue, a top Apple executive who oversees sports, has said as much publicly. The addition of Lionel Messi may make the 10-year, $2.5 billion agreement with MLS a success. But it is as much of a Messi deal now as an MLS one. Messi is even in on the $100 per season subscription cuts.
But can Apple really do these types of deals with the biggest professional and amateur leagues? It seems very unlikely. The NBA’s media deal is up around the corner, so we will find out.
The truth of the MLS deal and the Pac-12 offer is that, in the end, the networks, specifically ESPN and Fox, did really want them. They liked some of the teams, but not all of them. Fox has now ended up with UCLA, USC, Oregon and Washington in the Big Ten and doesn’t have to worry about the rest of the conference.
Where the Pac-12 really messed up was, after UCLA and USC took off, it allowed the Big 12 to step in front of the line and take ESPN and Fox’s offer of $31.7 million. If it had not, then all this realignment may not have happened.
The Pac-12 wasn’t keen on adding Big 12 schools. The Big 12 still had years on its current contracts, which very well could have come to market later in a different landscape. All this would have probably, at least, been delayed had the Pac-12 moved faster with ESPN and Fox.
6️⃣ Worldwide Leader in distribution
This brings me to what I wrote about last week about ESPN looking for a strategic partner. If Apple wants to sell global sports subscriptions, it needs the best content. If it were to do a deal with ESPN, it would bring in nearly all the major sports. With this linchpin, it could be the home to sports streaming in the future. If it costs $4 billion or $5 billion to get a 10 percent piece of ESPN, that would be much cheaper than trying to acquire all these rights. It is something to watch if Apple is really interested in sports.
7️⃣ If you are serious, you need the NFL
If you are serious about sports, you need to be in bed with the NFL. The fact that Apple did not close the Sunday Ticket deal and allowed it to end up with Google’s YouTube was a bad sign for its aggressiveness into the sports.
A-Rod is likely going exclusive with Fox Sports on baseball, which the Hollywood Reporter wrote about recently. Even so, there was a very good chance ESPN was not going to bring back Alex Rodriguez for the “Kay-Rod” alternative casts. It is not that Michael Kay and A-Rod weren’t successful — it picked up a nice slice of the audience — but with ESPN trying to be more payroll efficient, doling out A-Rod big money is a place where ESPN could cut back. If ESPN wants to continue for cheaper, I could see Roger Clemens being interested. Not sure how he would do over nine innings, but he’s been very engaged as a guest on the programs and ESPN added him to an opening day broadcast. You keep Kay and just switch the name to “K and Kay.” … MLB Network has become the place for the trade deadline on TV, because ESPN doesn’t give baseball full attention on its linear channels. MLB Network’s “MLB Tonight” trade deadline show was the second most watched deadline show in its 15 years, averaging 250,000 viewers over its five hours from 1-6:30 p.m. It peaked at 371,000. MLBN’s most watched deadline show was in 2015 with 264,000 in a much larger cable universe. … Arizona State Athletic Director Ray Anderson, whose university just joined the Big 12, where West Virginia plays, said, “I promise I’m not going to Morgantown.” It was an odd throwaway line when joining a new league. … Christian Pulisic, Weston McKennie and Sergino Dest all in Serie A is a boon for Paramount+ with the Italian league on that service.