MLS Scores Fresh — But Costly — Deal With Apple TV

Major League Soccer has reached an exclusive media deal with technology giant Apple to stream its games starting in 2023, the league said on Tuesday.

MLS will show its entire fleet of games on its own branded streaming service that will be distributed through Apple. As part of the deal, select games including MLS Leagues Cup, MLS NEXT Pro and MLS NEXT will be included, and some content will simulcast on linear TV. MLS added that season-ticket holders for any of its teams can subscribe to games for free.

The financial terms of the ten-year agreement were not publicly released, but reports indicate the pact is worth $250 million annually. Asked by Forbes to confirm that figure, MLS commissioner Don Garber didn’t deny the price tag, calling it a “minimum guarantee” instead of a rights fee.

The league’s new “partnership” falls behind other U.S. sports properties and bigger international soccer leagues. The NFL lured a new rights package exceeding $10 billion a year with broadcast, cable and streaming companies in 2021. The NBA and MLB earn roughly $2 billion per season while the NHL makes approximately $625 million per year. NBCUniversal agreed to retain its U.S. rights for the English Premier League in a reported $2.7 billion deal.

MLS, which was initially seeking roughly $300 million annually, has current media agreements with ESPN and Fox Sports that reportedly pay a combined $90 million annually and expire after the season. But those deals include rights to air U.S. national soccer games.

Lee Berke, CEO of LHB Sports, a firm that advises U.S. pro sports leagues on media deals, labeled the new deal an “innovative distribution” but noted that it could actually cost MLS money because it will need to pay for production costs, which he says could run as high as $50,000 per game.

“I think you’re looking at several hundred million dollars of production cost per year,” he says. “From Apple’s standpoint, they obtained global distribution for MLS, and the downside is limited.”

On a media call with reporters on Tuesday, MLS deputy commissioner Gary Stevenson said the league established a production plan over the last few years, including Second Spectrum cameras that capture player data for broadcast integration. Stevenson didn’t elaborate on how much the league would spend, though.

Still, Garber said that the agreement will allow MLS to expand its fan base globally and that its pairing with Apple allows the league improved “accessibility to our content” that “goes way beyond that which was previously offered.”

“We are convinced that this is where our fans are going, and this is where the business is going, and we have an opportunity to go there perhaps before anybody else does,” he told reporters.

Traditional networks can still bid on MLS’s linear rights package, and early speculation suggests ESPN could retain its TV package but at a lower cost as it is receiving less inventory. However, MLS, which doesn’t typically draw a large TV audience, still needs a traditional network to expand and grow fan interest, especially with games no longer available on regional sports networks, or RSNs.

On Tuesday, ESPN told Forbes that MLS games are averaging 292,500 viewers through 14 games in the 2022 season. That’s up from roughly 273,000 viewers for 33 MLS games last season. The league averaged 233,000 viewers on ESPN platforms for its 2020 season, which was impacted by the pandemic.

Garber said the agreement would be an “economic benefit to our teams” as media revenue is a large part of projecting franchise values, but exactly what that benefit will be remains to be seen. Apple doesn’t publicly release viewership metrics, and the cost of production will take a bite out of what flows back to the franchises.

Performance, says Berke, will “be judged on different things. If you see growth in subscriptions, revenue, distribution worldwide—then it’s working.”

He added: “It’s a platform you can build upon. In terms of the finances, you’re taking on a substantial expense (production). So it’s going to take some time to see what your net profitability is going to be from that.”