NFL media properties become the focus after MLB streaming deals.

• The tech giant's MLB deal could pave the way for more sports rights, including the upcoming NFL package.
• While streaming outlets are gaining popularity, the company faces intense competition from both legacy media companies and other tech giants.
• Some industry observers say that Amazon is being considered as the front-runner for the NFL's Sunday Ticket package, which could be worth $3 billion.

Apple is new to the sports media rights industry, but it's already making a big impact.

Major League Baseball granted rights to stream games on Friday nights to the company, which plans to broadcast live pregame and postgame shows. The games will be free from local broadcast restrictions and won't require an Apple TV+ subscription, at least for now.

Nearly $600 million was reportedly paid by Apple in a seven-year deal, although the terms were not disclosed.

The tech giant's MLB deal could be the first step in expanding its presence in the sports industry, with a large NFL rights package also available. However, Apple faces intense competition from established media companies and tech giants as more games move to streaming platforms.

According to The Wall Street Journal, MLB is on the brink of striking a deal with Peacock, NBCUniversal's streaming service, to bring MLB games back to the media company for the first time since 1989 when NBC lost MLB rights to CBS Sports.

MLB's deal with Apple was deemed "just right" by longtime media rights advisor Lee Berke.

The sports streaming wars are only just beginning, and the MLB deals are just a small sample of what could be to come. According to Berke, CEO of LHB Sports, the biggest remaining asset on the table is the National Football League's Sunday Ticket property.

The crown jewel: NFL Sunday Ticket

The NFL has one more year of rights to out-of-market games with DirecTV, but Commissioner Roger Goodell has stated that the league is seeking a more direct-to-consumer model for Sunday Ticket. Media pundits suggest that Sunday Ticket is worth up to $2.5 billion annually, which is higher than the $1.5 billion that DirecTV currently pays in its contract.

The senior vice president of Octagon's global media rights consulting division, Dan Cohen, forecasted a $3 billion asking price.

The NFL's plans for Sunday Ticket are uncertain, as the DirectTV deal expires in 2023 and a new deal may not occur until the 2022 season.

Berke proposed that the NFL could split Sunday Ticket among various outlets, similar to how the league divides its alcohol rights. While Anheuser-Busch lost complete control of alcohol rights, they retained beer and hard seltzer. The NFL then added Diageo as a rights holder for hard alcohol, worth $30 million per year.

TPG, a private equity firm, now partially owns DirecTV, which could retain satellite rights for its customers, particularly in rural areas where streaming is still challenging. Additionally, DirecTV would maintain its out-of-home screens in commercial establishments such as airports, bars, and restaurants to safeguard its substantial commercial business, as stated by Berke.

Apple may acquire Sunday Ticket streaming rights and the league's mobile rights, which Verizon relinquished in its renewal last year. According to CNBC, there were discussions in league circles in October about Apple purchasing the rights, although other companies could also be contenders.

In March 2021, the NFL signed a $100 billion media deal that included Amazon as the front-runner to acquire Sunday Ticket, in addition to its existing exclusive rights to "Thursday Night Football" and a Saturday game.

Berke stated that he believes Apple requires more content to expand their Apple TV+ service and increase sales of their hardware and software globally.

The NFL, Amazon and Apple declined to comment.

Apple, with a $2.5 trillion market cap, is utilizing its substantial cash reserves to expand its business beyond iPhones, computers, watches, and the App Store. In 2019, the company launched Apple TV+ as a $5-per-month subscription service that would compete with Netflix and Amazon on the big streaming platforms, featuring original content such as "Ted Lasso" and "The Tragedy of Macbeth."

"No other company, including Amazon, has the dry powder (money) that Apple possesses," Cohen stated. "As a tier-one sports property in a market where Apple TV+ is significant to Apple, I am preparing to align," Cohen added.

According to Evercore, Apple's MLB package is a good start, but baseball games may not significantly impact their streaming service. However, the firm believes that if Apple were to acquire the NFL's rights, it would be a game-changer for their streaming service.

Apple can use its financial might and technical capabilities to secure live sports rights and provide a superior user experience.

What about NFL Media?

Goodell may reveal updates on Sunday Ticket plans during the NFL's upcoming meeting in Florida.

NFL’s media arm is also the subject of deal speculation.

In June 2021, Jerry Jones and Robert Kraft, the owners of the Dallas Cowboys and New England Patriots, respectively, revealed to The Wall Street Journal that the NFL was seeking "investment partners" for NFL Media. This entity manages NFL Network, NFL RedZone, NFL.com, and the NFL's international properties.

Kraft stated that as the communications and digital media landscape evolves, he seeks a partner who can help maximize the reach and potential of the NFL's assets.

The NFL has the potential to achieve its international ambitions with the help of Apple and Amazon, who possess the consumer reach, data, and tech infrastructure to align with the league's vision for growth. However, the market value of the property is uncertain.

Berke pointed to MLB's sale of its MLB Advanced Media property to Disney for over $2 billion in 2017 as an illustration of what could transpire. The deal granted licensing rights to stream MLB games. Disney subsequently transformed BAMTech into its Disney Streaming Services.

In August 2021, Disney acquired a 10% stake in the National Hockey League's streaming tech for $300 million, giving Disney an 85% stake and MLB a 15% stake worth at least $750 million.

The Sports Business Journal reports that MLB's decision to sell the majority of its tech netted team owners approximately $50 million each. If Goldman Sachs, which the NFL has chosen to help find partners, is successful in luring investors for NFL Media, team owners will benefit and team values may increase.

MLS rights still on the market

Commissioner Don Garber stated that there is significant interest in the marketplace for Major League Soccer rights, and he believes a deal could be reached by the conclusion of the first quarter, which is approximately two weeks from now.

In December, CNBC reported that the league is seeking $300 million per year, up from roughly $90 million per season. However, media executives predict that the figure is likely to fall within the $150 million to $200 million range, particularly since MLS lost control of the U.S. national team rights, which it bundled. The national team entered into an exclusive deal with Turner Sports for a reported $25 million per season.

Viewership is the most critical metric in rights deals.

In the first three weeks of the 2022 season, MLS is averaging 298,000 viewers for national games. In the 2021 MLS regular season, the league averaged 276,000 viewers for 31 regular-season games across ESPN channels, including ABC. That’s up from the average 233,000 viewers who consumed 39 MLS games in 2020 on ESPN platforms. Fox said viewership increased 4% across its platforms.

Berke stated that the challenge for them is to increase their television ratings. Although it has not grown significantly, there is potential for growth. MLS needs to find the right media mix to achieve this growth.

The MLS' package will feature a new monthlong championship tournament called the "Leagues Cup," which will start in 2023 and include streaming to local games as well as MLS teams playing against Mexico's Liga MX league clubs.

Garber described the rights as a "one-of-a-kind deal that includes every game, regardless of its national or local origin or global reach."

He stated, 'We're engaging with anyone in this industry, be it a streamer or a traditional media company. I'm excited by the response and aim to conclude a deal soon.'

NASCAR, Big Ten could enter $1 billion club

The NASCAR deals with NBC and Fox are set to expire in 2024, and the organization could potentially see an increase in revenue that exceeds $1 billion annually.

The 2022 Daytona 500, which was held after the Covid pandemic, was a success for NASCAR. The event attracted an average of 8.8 million viewers on Fox, up from the 4.83 million viewers who watched the rain-delayed 2021 Daytona 500. This marked the lowest-viewed Daytona 500 in the history of the race. In comparison, the 2020 event had roughly 7 million viewers.

The 2021 Cup Series saw a rise in national ad spending, with a total of $93.7 million, compared to $80.2 million in 2020, as measured by iSpot.

Cohen expressed optimism about NASCAR, commending Steve Phelps for revitalizing the sport through the addition of dirt tracks, car modifications, and celebrity ownership. Phelps also emphasized NASCAR's commitment to promoting diversity as a key factor in the sport's growth.

Phelps stated in a recent interview with CNBC's "Tech Check" that diversity is crucial to the future of the sport. He emphasized that this is being done intentionally with the fan base, ownership base, and employee base.

The Big Ten of the NCAA could potentially receive a raise in media rights.

Commissioner Kevin Warren will secure the first media rights deal for the powerhouse conference in the last year of a $2.6 billion deal with ESPN, Fox, and CBS, which was negotiated by former Commissioner Jim Delany in 2017.

The Big Ten has top-notch football programs, including Ohio State and the University of Michigan, which attracted an average of 15.8 million viewers for their game in December. Some sports media analysts have proposed that the Big Ten could potentially earn $1 billion annually.

Cohen stated that the Big Ten is set for significant advancements and has more than just Ohio State and Michigan as prominent brands.