The True Value Of Sports Rights Deals

Sports broadcasters and TV operators’ most valuable asset is sports rights. And for the biggest sports rights, the multi-billion-dollar investments represent a statement of intent — they define the true value of their content offering. Although linear television broadcasters have traditionally paid the largest licensing fees for live sports distribution, the tech giants also recognize the opportunity that major sports rights bring to their streaming platforms, and their investments are disrupting the market in a big way.

The recently-announced 10-year deal between Apple and Major League Soccer — worth approximately $2.5 billion — is just the latest example. It strengthens Apple’s existing sports offering – which already includes Friday Night Baseball from Major League Baseball – as it looks to feed the growing appetite for streaming access from sports fans.

In parallel, content owners see the advantage of bringing in new audiences that extend beyond just increased viewership. They can see this across all streaming markets. Research from Digital TV Research shows that OTT media revenues are expected to surpass $210 billion by 2026, nearly double the revenue generated in 2020.

A New Approach To Captivate Viewers

Today’s audiences use a range of screens and platforms to access a wide selection of highlights, clips and features. According to a recent Morning Consult survey,  MLS and the NBA in the U.S. have more diverse and younger audiences than the other leagues. Sports rightsholders should be aware of the need to get their live content on social media and streaming sites quickly in order to keep younger audiences engaged.

One way Apple can use its deal is by creating supplementary on-demand content around the MLS brand, following suit with its MLB Big Inning Show, which brings fans all the best action from around the league with live look-ins, breaking highlights and big moments.

Apple can do something similar with MLS while also sharing some enthralling stories through on-demand content. There are new thriving clubs, such as Atlanta United and New York City, the journeys of rising rookie talents and renowned national-team players and opportunities to showcase the tales of former-MLS superstars, including David Beckham, Thierry Henry and Zlatan Ibrahimovic.

Challenges On The Road Ahead

Unlike MLS’s previous deal with ESPN+, Apple will enable MLS fans to watch any game without regional blackouts. Fans will also be able to tune in from anywhere worldwide, bringing in larger international audiences.

However, this has led to the league eliminating local broadcasters – and this could result in a loss of casual fans. Some MLS teams have great local broadcast coverage, such as MSG Network and Bally Sports South, along with notable commentators like Dave Johnson (DC United), Steve Cangialosi (New York Red Bulls) and Joe Tutino (LA Galaxy), and they are well-loved by local audiences.

It will also be interesting to see the viewership numbers once the deal begins at the start of the 2023 season. Every match on the streaming service will be behind a paywall. While this barrier could deter the casual and emerging fan, audiences can now access any match they want throughout the season. It’s great news for loyal fans, but will this new streaming platform help the trajectory and size of the MLS fanbase long-term?

Time will tell. But Apple and MLS have the principles right. A sports streaming service is about creating connections between the game, its players and its fans. There are immense opportunities for content owners and rights-holders to embrace sports streaming within their content distribution strategies. The big tech companies have found a new battleground in the consumer household.

Ed Giovannini is VP, broadcaster sales, at MediaKind.