Judging Major League Soccer’s New TV Deal With Apple May Take Years

If you look closely, there are echoes of commissioner Don Garber’s previous life as a National Football League executive across his more two decades as Major League Soccer’s top official.

Maybe it’s fitting, then, that the initial media reaction to MLS announcing a new 10-year, reportedly $2.5 billion world-wide TV & streaming deal with Apple was reminiscent of pundits grading a first-round NFL Draft pick: Some praise, some criticism, and a good deal of uncertainty about how it will all play out.

The architecture of this new agreement is considerably different from traditional pacts between sports leagues and TV rights holders, even beyond the fact rights are going to a holder that operates exclusively as a streaming service. And MLS is clearly hoping it will be a trend-setting pact as more streaming providers dive into live sports.

“You think about when Apple got into the music business. Now, they are the music business,” said Gary Stevenson, the league’s deputy commissioner and president of business ventures. “You think about when Apple got in the news business just four years ago. Now, they’re a dominant player in news. This idea of what they can do for us and for our fan base, to create new fans and to develop and engage our existing fans, was just so exciting to us.”

But Replicating the ubiquity of iTunes or Apple News with Major League Soccer content is unlikely. And even a fraction of that distribution could represent a major step forward in terms of MLS’ exposure.

As for grading the financial impact of the new deal, it’s not as easy as simply comparing the new $250 million annual price tag to the previous $90 million annual figure on MLS’ previous national TV deal. There are considerable differences in how rights are distributed and revenues are calculated.

The Rights

Apple receives exclusive, worldwide streaming rights to ever single MLS regular season and postseason match. This includes the rights that were previously distributed to local broadcasters for games that weren’t on national TV, meaning there will be no local blackouts for subscribers but also no local network or cable option.

Some games will also appear in English, Spanish and French on American and Canadian broadcasters, and presumably also on national networks in other countries. The league is still negotiating those deals. If and when that happens, Apple MLS subscribers will still be able to access those games through their subscription, and not require network or cable TV.

As part of the deal, Apple will show some national matches on the Apple TV+ service that is not behind the MLS subscription paywall.

The Revenue

In a figure first reported by Sports Business Journal, Apple will guarantee MLS $250 million annually. But a like for like comparison against the $90-million a year MLS previously earned from U.S. national broadcasters is not a fair one.

Not only does the figure include both local and national rights, it also doesn’t include production costs, which will be shouldered by the league. However, the previous $90-million national MLS deal also included rights to all U.S. men’s and women’s national team home matches. Those were uncoupled and sold separately this winter for the next eight years to Turner and HBO in a deal worth $200-$216 million.

And while MLS is also incurring more expenses in match production, it could also receive a share of subscriptions to Apple’s MLS service if they exceed an undisclosed threshold. And because it will be on Apple to hook subscribers, MLS should receive a far more robust promotional push than it has from previous national TV partners on the English-language side.

The Future Unknowns

Like the drafting of a highly rated player, ultimately the success of this deal depends on future growth that can be projected but not gauranteed.

Garber and others point to the 2026 FIFA World Cup — to be jointly held by the U.S., Canada and Mexico — as an obvious catalyst for that growth.

But tying the growing popularity of soccer overall to the popularity of MLS can be tricky. Current TV ratings peg it as only the third-most-watched soccer league in the U.S. behind the English Premier League and Mexico’s LIGA MX.

Aside from the potential World Cup impact, there are other vital questions whose answers will only come years from now

• Can Apple successfully drive fanbase growth? Some worry removing games from local airwaves and putting them behind a paywall could have the opposite impact. At the same time, the league’s younger and more urban target fanbase meshes with much of Apple’s user demographic. That could perhaps help MLS reach an audience that it wasn’t always finding on ESPN or FOX.
• How much additional revenue can MLS earn in the deal? This is related to the previous question. The revenue from Apple could grow beyond $250 million per season if subscriptions to Apple TV’s MLS service surpass a certain threshold. We don’t know (at least yet) what that figure is, and what portion of subscription fees would be funneled to MLS coffers. (In previous years before a streaming partnership with ESPN+, the league offered all out-of-market games on a platform called MLS LIVEIVE
  for $79.99 annually as of 2017. For Apple to make back all of its $250 million annually solely through subscriptions would take about 3.1 million subscribers at that price.)
• What will national TV networks pay for non-exclusive rights? MLS is still negotiating with ESPN and FOX over a more conventional national TV package for 2023 and beyond. Those non-exlcusive rights might not be very appealing in the short term. But that could change over the length of the deal, particularly if Apple is successful at growing MLS’ fanbase and/or the impact of the 2026 World Cup on MLS is as large as MLS is counting on.
• What will $250 million be worth in 10 years? According to the CPI Calculator provided by the U.S. Bureau of Labor Statistics, $1 in 2014 is the equivalent of $1.23 in 2022 dollars. In other words, the $90 million broadcasters paid MLS in 2022 was worth about $73.2 million when the deal began. But the current year-over-year inflation is far higher, and while a decline is expected in most economic forecasts, it’s not guaranteed. This is the longest rights contract MLS has ever negotiated. And it’s possible the $250 million MLS receives from Apple annually will represent a considerably smaller outlay by the time the deal expires.