Apple, Lionel Messi and the $2.5bn question: What’s next?
In 2019, during an interview with Sports Illustrated, the Apple senior vice president of services, Eddy Cue, was asked the extent to which he, in his role at the world’s most famous company, considered competing for live sports rights.
“Not a lot, honestly,” Cue said, before adding: “That’s not to say we would never do sports, because who the heck knows. Never is a long time, but I don’t think that’s a problem right now.”
Apple’s hesitancy about investing in live sports centred on various factors. First, Apple is, by market cap, the largest company on the planet and in July it became the first company in history to reach $3trillion. For novel ideas within Apple, this is a blessing and a curse. A blessing, because Apple can essentially afford to trial anything. And a curse, because to turn the needle within a multi-trillion dollar company is not an easy thing to achieve, particularly when live sporting rights do not come cheap.
Second, Apple, a company that does not usually do things by half-measures, was always cautious about the long-standing trend of sporting rights, where deals are usually sold by territory to different partners around the world. For example, the English Premier League lists 40 companies across 97 different countries on its website to which it has sold broadcast deals for the period between 2022 and 2025.
This level of fragmentation appeared to disincentivise Apple, who desire exclusivity where possible. And to buy out the lot does not come cheap. In this last cycle, the Premier League’s domestic and international rights deals added up to £10.05billion ($12.99bn). By comparison, Apple TV+, the company’s streaming platform, spends a reported $6billion annually on content. As such, the idea of one company, and a tech company at that, acquiring global rights of the most popular sporting league would be stunning, hugely disruptive and, despite all the speculation, unlikely.
Yet little by little, Apple shows interest in sport. The origins appear to lie in the launch of Apple TV+ in November 2019, where Apple sought to challenge Netflix and Amazon by offering original shows and movies. Exclusive sports rights followed, as did the triumph of soccer-based comedy Ted Lasso. In March 2022, Apple’s first venture into live sport came when they committed $85m annually over seven years to stream Major League Baseball (MLB). Under the agreement, Apple secured exclusive rights to broadcast two Friday Night Baseball games in the U.S. but also across eight other countries including key Apple markets such as Japan, Canada, Australia, the United Kingdom and Germany. In 2023, Apple confirmed it had expanded its MLB coverage across 60 countries or territories.
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Yet in 2022, an opportunity emerged when Major League Soccer’s (MLS) global and local rights were due for tender at the same time, which enabled the MLS commissioner Don Garber to float the sale of global distribution rights. First over lunch in Mexico, then, after several meetings at Apple Park in Silicon Valley, California, Garber and Apple executive Cue thrashed out a unique deal.
In June last year, MLS announced a broadcast deal with Apple in which the tech company committed a minimum of $2.5billion over the next decade, and, in doing so, MLS became the first major U.S. sports league to go all-in with a tech company. This also stood apart because Apple secured the global rights they crave. Under the previous domestic media rights deal, MLS received between $60million and $65million per year combined from ESPN, Fox and Univision for its domestic television rights, so this all represented a significant uplift. The Apple agreement stated that MLS would organise the production in-house and for the first time, every MLS match would be broadcast by a single platform.
In recent weeks, this relationship became even more unusual. The MLS team Inter Miami found itself competing against the Saudi Premier League, funded by the Saudi Arabian sovereign-backed Public Investment Fund, as it sought to entice Lionel Messi to the U.S.
As negotiations intensified, MLS partners took an interest. Adidas, one of MLS’ corporate sponsors, also became involved, offering Messi a profit-sharing agreement if he headed to the U.S.
Apple, keen to grow the number of subscribers to their MLS Season Pass service, recognised the immediate appeal of Messi signing up to a team in MLS, and as such, they offered Messi a share of revenue generated by new subscribers.
There appeared to be a relationship already in place because last month, Apple previously announced a four-part docuseries charting Messi’s path to World Cup glory in Qatar, made with the assistance of the producers of ‘Welcome to Wrexham’.
Yet Apple’s involvement, as a broadcast partner of the MLS, in a deal to take a player to one team within the league, appears highly unusual. Consider, for example, if it emerged that Sky Sports (the lead domestic broadcaster for the English Premier League) had agreed a revenue sharing agreement with Cristiano Ronaldo when he returned to Manchester United in 2021. Without doubt, the competitive tribalism of English football would likely rear its head and uproar would have ensued.
Ed Desser, a U.S. sports media executive with 40 years experience in the industry and president of Desser Media, tells The Athletic: “It is not at all typical. The comparison to the Premier League is apt. It doesn’t happen. And in fact, in most other sports, these sorts of deals are forbidden by terms of the various collective bargaining agreements. So the teams couldn’t do them even if they wanted to.”
While not all supporters of MLS teams are thrilled about the idea, the teams themselves appear to have taken a long-term view, recognising that Messi’s arrival may grow the sport in a way that benefits the entire league’s ecosystem for many years to come. They believe it will mean higher ticket sales, larger commercial deals, attract more talent and inspire more young Americans to follow soccer.
Yet within the sports media industry, the Apple element has set tongues wagging. Apple declined to respond to all points raised in this report, which leaves their motivations and objectives open to interpretation.
So, what is their intention with the Messi deal? Why sport and why now? Is this a bet on MLS, hoping for a spike in viewing numbers in the lead-up and aftermath of the 2026 World Cup, which will be co-hosted by the U.S., Canada and Mexico? Or is this a testing ground, as Apple weighs more ambitious ventures into truly prized sporting rights, such as the NBA, the NFL and the Premier League?
Messi is a World Cup winner and a seven-time Ballon d’Or recipient. His appeal to any brand is obvious. Consider, for example, that Inter Miami had around one million Instagram followers before news broke of Messi’s impending arrival and within a matter of weeks, this has risen to more than 8.5million, which is more than many NFL, NBA and NHL teams. Only four U.S. sport teams (the Golden State Warriors, Los Angeles Lakers, Cleveland Cavaliers and Chicago Bulls) remain above Miami, the MLS franchise co-owned by David Beckham. The Bulls, on 9.8m Instagram followers, will likely soon be overtaken by Messi’s new team.
The story of Messi’s pull is not a new one. When the Argentine joined Paris Saint-Germain in the summer of 2021, the French club pulled together internal documents tracking the impact. Messi’s debut for PSG against French club Reims secured record Ligue 1 viewership records.
In France, Amazon had the rights for the game, which secured 10.5million viewers domestically. In Spain, just over 6.7million people watched at least one minute of the match on Telecinco, securing an 18.6 percent audience share. Stories emerged of tickets being resold for the game for €6,000 (£5,100; $6,680). The social media impact was once again visible. The club’s social following rose by 19million internationally within ten days of his signature, helping PSG to become the most followed French brand on Instagram ahead of Chanel, Louis Vuitton and Dior. The French league, too, saw a wider benefit. In the wake of the Messi signing, territories that had previously limited investment in Ligue 1 moved to secure deals. This included deals in Belgium, India, Norway, Spain, Sweden, Vietnam and Japan, although the actual valuation of these deals was not released.
It is easy enough to understand why Apple thought it may be beneficial to help get this signing over the line.
Apple is yet to release any details to indicate its success or otherwise in relation to MLS, we do not know the number of MLS Season Pass subscriptions sold, but the initial pricing offer came in at $14.99 per month or $99 per year for regular deals, with discounts available for those who already subscribe to Apple+ TV.
On a service that only otherwise offers a fraction of MLB’s offering, it is a considerable ask for sports fans based in the U.S. who may also subscribe to services such as Fox, ESPN, Peacock or Paramount+, although physical season ticket holders of MLS teams, who attend games, have been given free passes for the service. It is unclear whether this will remain next season.
Pierre Maes, a Belgian sports media dealmaker with vast experience in the rights market, believes “the price is very high.” He adds: “ I don’t think there are people even in Apple headquarters who believe they’re going to sell a lot of subscriptions at this price. This is very expensive for a minor league.”
Those who held MLS rights previously often saw a difference between the anticipated growth of the league and the reality they experienced when they owned the rights. Things have improved since the All-Star Scrabble Championship commanded a higher share of TV viewers than MLS during one of Beckham’s early weekends as a Los Angeles Galaxy player. Yet ESPN averaged less than 350,000 viewers for its 2022 MLS broadcasts and the full-season average in 2021 was 276,000. When Apple came along and blew the previous ESPN deal out of the water, therefore, there was unlikely to be too much sleep lost at Disney (who own ESPN) over the arrangement.
Desser says: “For traditional media companies that face the pressures of falling subscribers and lots of other expenses, it’s hard to justify spending more money on a package that is less likely to move the needle. MLS, with all due respect, is not the NFL or the NBA. These entities are being forced to make economic decisions. And a $250million MLS deal was one of those decisions that they figured they could pass on without causing grievous harm to their overall consumer marketing proposition.”
Maes is a little more brutal, describing MLS as a “third tier” property in a world where platforms increasingly prioritise premium properties. Where Maes is cynical, others see potential. Studies have suggested that 70 per cent of soccer fans in the U.S. are either Millennial or Gen-Z and MLS has the youngest fan base of any men’s pro league in the States, which may be encouraging indicators for streaming platforms.
Messi’s arrival may still be a gamechanger, as Apple can, to a large extent, claim that they are the only place to watch one of the world’s most talented sportsmen whose individual following dwarfs that of most teams. This is not entirely the case, as Messi’s projected debut, in the Leagues Cup on July 25, will be on Univision as well as Season Pass, while Inter Miami’s U.S. Open Cup semi-final against Cincinnati on August 23 will air on CBS Sports. Fox Sports also have a linear TV deal to an average of 34 regular-season games and eight postseason games across MLS in the next three-and-a-half years but these are not exclusive to Fox and will be simulcast. In short, if you are a big Messi fan, you will need Apple.
Messi’s personal Instagram following is 478million, while his former club Barcelona has 122million followers. These are the kind of numbers that persuaded the Saudi Arabian state, for example, to pay up to $25m to Messi to promote its tourism office. Apple’s hope will be that Messi makes MLS more relevant both domestically and internationally, driving up numbers of subscribers to the MLS Season Pass and also to Apple’s TV+ service. While it is highly unusual for leagues to do these deals, it is not unheard of.
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Peter Hutton is the former head of sport at Meta and also an ex-CEO of Eurosport. He was privy to Eurosport’s negotiations to acquire MLS rights in previous cycles. He says: “The concept of ‘bonuses’ being built into rights deals is not unusual. When we acquired MLS rights at Eurosport, we discussed a bonus if Zlatan Ibrahimovic signed, for example.” The bonus would have been worth $250,000 to MLS, but ultimately it was not included in the final agreement.
In recent years, Apple has sought to diversify its revenue streams, although hardware still dominates. In the second fiscal quarter of 2023, Apple reported that iPhone sales accounted for $51.33bn of its overall $94.84bn revenue, which underlines that Apple’s core business still depends on selling the products so many people use every day. In the U.S. alone, Apple hit 50 per cent of all smartphones used in the country by September 2022, but there are still plenty of regions, including swathes of South America, where Android systems dominate the market share. On the most basic level, investment in live sport, and in Messi, may help shift more phones.
Increasingly, Apple also seeks to develop services that both attract and retain customers on Apple’s hardware platforms. This may be the App store, Apple News, Apple Music, Apple Podcasts, or Apple Arcade.
The approach therefore seems twofold and arguably compatible; a streaming platform such as Apple TV+, with shows such as Ted Lasso and live sporting rights, may afford Apple a broader share of their existing customer’s overall spending, when most people will only buy a phone or a laptop every few years, therefore yielding more recurring revenue streams, while also capturing new customers by bringing them into the Apple ecosystem via sport. Apple’s second-quarter results demonstrated that over $20bn of revenue for the period came from “services”. Hutton also sees this as an opportunity for Apple to experiment and promote virtual reality, particularly because Apple are due to release a $3500 Vision Pro headset in 2024, which has been seven years in development, and such experimentation was also part of the discussions when Apple previously held talks over acquiring a portion of NFL rights.
Within the sports media industry, however, the hope is that Apple may be gearing up for something even more dramatic.
Premium sporting rights are an expensive business and, as such, when sports leagues find partners, they tend to be loyal. In recent years, there has been no shortage of breathless coverage, for example, suggesting that the English Premier League may be the subject of major overtures from tech companies such as Apple, Netflix and Amazon.
Yet the domestic rights have largely remained in the hands of more traditional platforms such as Sky Sports, who are owned by Comcast. Amazon does broadcast a small package of 20 live Premier League games each season in the UK and have acquired 17 Champions League games per season from 2024, which will give the company first pick of Tuesday evening fixtures. The aim by Amazon has long been to acquire a small batch of high-demand assets, or marquee rights, that can steer more customers towards its Amazon Prime service.
The Premier League, so far, has remained loyal to Sky, mostly because it is the company that continues to produce the money. Hutton says: “I think leagues are always welcome to new forms of income, but there are challenges. Most tech firms are built on revenue share models and a ‘test and learn’ philosophy that does not sit easily with the sort of long term rights deals that underpin the sports economy’.”
Meta, in any case, appears to be moving away from live sporting rights. Hutton says: “Meta is different in that they are far more a platform company than a content company, encouraging people to use their tools rather than investing in the acquisition of content for a time period.”
Desser adds: “Facebook’s business is basically an ad business. They’ve done a very good job of using everyone’s personal data to figure out how to target them. You don’t necessarily need to spend a lot of money on sports to do that. They tried it out and they figured out that there’s not a huge return on investment there. They’d have to come up with a new economic model and it looks like they’d rather come up with a replacement for Twitter.”
Both Maes and Desser agree that Apple’s MLS investment should be seen, at least partially, as a testing ground for broader ambitions. During the past year, Apple has been linked, often by highly reputable outlets, to bids for NBA rights (which are up for tender this autumn), and have been reported to be considering bids for rights within the English Premier League. Apple also held talks over NFL Sunday Ticket, which eventually went to YouTube TV instead. The French Ligue 1 has emerged as another possibility, because the league’s domestic and international rights packages are up for grabs in September. The last cycle was worth around $650m, but it would still be a considerable shift in strategy by Apple to move beyond U.S. sport. The other problem, of course, is that Apple is notoriously secretive and no league is likely to play down reports linking them with Apple, because it helps create the perception of competitive tension in markets that can sometimes be flat.
Maes says: “It’s difficult to be waterproof to the leaks and to those who try to tell everybody that Apple is ready to buy soccer rights and put Sky in danger in the UK. Of course you can’t really imagine Apple not going further in terms of sport but I think it’s much too soon for them to take bigger risks. Apple has tended to be risk averse. And if you look at the most recent tenders which were the English Football League (EFL) in the UK and the Serie A in Italy, there were also press stories about Apple being interested, and then Apple didn’t show up. Leagues often face an absence of competition in the main markets, or a monopoly or a duopoly. And it’s very difficult for them to bring the prices to a higher level. So they try to stimulate a competition.”
As a testing ground, MLS is pretty cheap, at least by Apple standards. Media rights consultant Desser says we should view the investment as, essentially, a research and development project and in Messi, Apple now has a walking billboard.
Elsewhere, this would have cost much more. The NFL, for example, has deals worth a cumulative $113billion, largely with major TV networks but Amazon also has a $1billion annual commitment as part of this for 15 Thursday Night Football games that it streams digitally. The NBA’s current deals with ESPN and Turner, meanwhile, are worth a combined $2.6billion annually, while the NHL brings in $625m from the same companies. The question, therefore, is when and where Apple may insert themselves into the fight.
Desser says: “It’s likely that they would be part of the discussion because first and foremost, you simply cannot ignore the biggest company in the world. They’re just too enormous. If they put their mind into getting into sports in a much bigger way, they have the ability to outbid every other entertainment company. Relative to Fox, which is a $17billion company or thereabouts, or Disney, which is a $165billion company… so $3trillion just dwarfs all of these other big entertainment companies.
“Having said that, league’s value relationships and stability. And changing partners is not something that they are anxious to do as a general matter. And so I wouldn’t say it’s a foregone conclusion that there’s going to be a deal with Apple. I think it’s less likely than more likely. If the MLS deal is a model, it’s hard to see that as something that the NBA could even consider. But, if Apple decided, we’ll pay you $20billion, well then that’s a whole different decision. I don’t think they’re going to do that, but they could make the offer.”
“What Apple does is they have various projects in the works. They have a news product now and a music product now. At one time, those things were future developments and sports could very well be in that category for them. Sport is the one product, with the possible exception of news, that has a new original product every day. It is proprietary, it is tribal, and it is a very, very powerful form of entertainment.”
(Photos: Getty Images; graphic: Sam Richardson)
