With The Apple TV+ Agreement Major League Soccer Is Growing, But Still Has A Long Way To Go

Men’s soccer is the most popular team sport around the world. In the United States its acceptance has not been as strong but has been growing in popularity. To help grow the sport the MLS, in June, reached an agreement to stream all its games on AppleAAPL
TV+.

Soccer’s fanbase is younger and more ethnically diverse than other U.S. team sport. A survey released in April from Morning Consult, found soccer’s popularity was highest among younger adults, with 54% of their fanbase under the age of 45. A greater percentage than any other sport surveyed. In addition, soccer (along with the NBA) has the most ethnically diverse fanbase. Over half of all Hispanics (55%) surveyed categorized themselves as a soccer fan. These are popular targets for many advertisers.

Nonetheless, among team sports, soccer’s popularity lags behind the NFL, MLB, NBA, NHL, college football and basketball. MLS is hopeful the Apple TV+ agreement will increase fan interest while providing additional revenue.

Avid Fan Casual Fan Total

NFL 32% 35% 67%

MLB 20% 35% 55%

College football 18% 34% 52%

NBA 16% 30% 46%

College basketball 12% 31% 43%

NHL 10% 28% 38%

Soccer 7% 25% 32%

Golf 7% 23% 30%

Tennis 5% 25% 30%

Source: Morning Consult

The Apple TV+ Agreement: With their current media agreements expiring at the end of this season, MLS has been negotiating a new agreement. Last month, the MLS reached a ten-year $2.5 billion agreement with Apple TV+.

The current MLS agreements which began in 2015 was with Fox, ESPN and Univision. Under that agreement the three media partners shelled out $90 million per annum, with the MLS receiving $65 million each year and the U.S. Soccer Federation the remaining $25 million.

Beginning in 2023 all MLS games will be live streamed on Apple TV+. The Apple agreement is also global, creating a digital center for the younger and more tech savvy soccer fans who are also more likely to stream live sporting events.

As part of the agreement, season ticket holders will get free access to MLS related content. All Apple TV+ subscribers ($4.99 month) will also have access to every MLS game with several matches available for free to anyone with Internet access. MLS games will be accessed on a specific Apple TV+ app. All home games will be “blacked out” on local television requiring a subscription to the Apple TV+ app. The rights fees Apple TV+ is paying could increase depending on MLS subscriptions growth.

The MLS will also adjust its schedule with most games on Saturday and Wednesday nights creating appointment viewing. Also, it’s reported as part of the agreement the MLS will be financially responsible for production costs, an estimated price tag of upwards of $65 million a year. MLS matches join a number of global soccer leagues currently streamed in the U.S. primarily on Paramount+, Peacock and ESPN+.

In the aftermath of the Apple TV+ deal, the MLS is still seeking a linear TV agreement with their media partners. An announcement is expected later this year. Any games on television will be simulstreamed on Apple limiting the value of a new TV contract. Nonetheless, including the TV packages, the MLS media rights agreements could reach $300 million a year.

Media Rights For Sports Are Rising: The MLS deal is the latest in a flurry of agreements media companies are making with sports leagues. All of the negotiated agreements were for a higher annual fee than the MLS/Apple TV+. In 2023, the NFL’s new ten-year agreement with NBC, Fox, CBS, ESPN and AmazonAMZN
will take effect at an annual cost of $10 billion. Amazon’s deal to stream Thursday Night Football will begin this season. Also, this fall NFL is expected to finalize their “Sunday Ticket” agreement with either Apple TV+ or Amazon which will stream out-of-market NFL games. The annual cost is expected to total about $2 billion.

MLB’s new seven-year agreement with Fox, ESPN and Turner Sports began this season at $1.75 billion a year. In addition, MLB games are streamed on Apple TV+ on Friday night and on Peacock Sunday afternoon. The NHL’s seven-year pact with ABC/ESPN and Turner started in 2021-22 at an annual cost of $625 million. The NBA is currently receiving $2.6 billion from ABC/ESPN and Turner in an agreement that runs through 2024-25. The league is reportedly seeking to triple the rights fees in the next round of negotiations expected to begin soon. The new MLS contract is also lower than the current media rights agreements with “March Madness”, NASCSC
AAR
R, PGA (excluding the four majors) and College Football Playoffs to name a few.

Other recent media rights agreements with soccer leagues are also more costly. For example, last November NBCU renewed their agreement with the English PremierPINC
League in the U.S. through 2027-28 at an annual cost of $450 million, nearly triple the previous agreement. (EPL matches average more viewers than MLS games.) In addition, Bloomberg, reports the UEFAEFA
is currently receiving bids for the U.S. rights to its Champions League which is expected to be more than $2 billion over six-years, doubling the current agreement.

The global rights for MLS games on Apple TV+ is also lower than the more established European soccer leagues. According to Front Office Sports, the global rights to the English Premier League is $1.64 billion each season. Germany’s Bundesliga is $1.15 billion per annum. The global media agreement for Spain’s La Liga is $1.04 billion each year. Italy’s Serie A is $970 million and France’s Ligue 1 is $610 million.

MLS Ratings: As more soccer matches are being televised and streamed, the TV audience for regular season MLS games have been relatively flat across all three networks over the past five years.

Average Audience Regular Season MLS Games

(in 000)

ESPN Fox/FS1 Univision/Unimas

2017 261 236 244

2018 241 296 282

2019 246 229 240

2020 233 202 249

2021 276 210 284

Source: Nielsen data From Sports Business Journal

Among the ratings highlights in 2021 was the MLS Cup on ABC which averaged 1.14 million viewers, a slight increase from 1.08 million of 2020 on Fox and 837,000 from the pre-pandemic championship game of 2019. The ratings highlight of the 2021 regular season was on Thanksgiving, a day reserved for the NFL, the MLS game on Fox (Colorado vs. Portland) averaged 1.9 million viewers, the most watched regular season game since 2004. Nonetheless, last May the (UEFA) Champions League Final between Real Madrid and Liverpool averaged 2.8 million viewers on CBS, with a record high audience on Paramount+ for a soccer match.

Value of MLS Franchises: Sportico reports the Los Angeles FC is currently the most valuable MLS franchise at $860 million, a figure higher than 18 NHL franchises. Overall, the average MLS franchise is now valued at $550 million. By comparison, Forbes reports Real Madrid is currently valued at $5.1 billion the highest of any worldwide soccer team. Globally, the value of the top 20 soccer teams is $2.53 billion, a 10% increase from 2021.

The MLS has been expanding. Since 2017 the league has grown from 20 to 28 franchises. St. Louis will be added next season and a 30^th franchise, possibly in Las Vegas, expected soon afterwards. The fee to own an expansion team has been increasing from $70 million for Atlanta in 2017 to $325 million for in Charlotte in 2022. Through 19 weeks of the 2022 average attendance for MLS games is 20,739, an increase from 16, 910 in 2021 and the highest since the pre-pandemic seasons of 2018 and 2019. This season Atlanta leads in home attendance at 48,192.

Changes in 2023: Besides the Apple TV+ streaming deal, the MLS has been active in other activities designed to grow the league and popularize soccer. In March the MLS Next Pro was launched, a youth league with 21 teams, 20 of them affiliated with an MLS squad. In July MLS struck a $270 million agreement with IMG Arena that will provide data, graphics and other insights for MLS fans. The analytics can be used for legalized wagering with information accessible on mlssoccer.com, the MLS app and all MLS club sites. Also, starting next year, every MLS team along with Mexico’s Liga MX teams will compete in a reformatted month-long “Leagues Cup”, to help promote their North American rivalry. Apple TV+ will also stream all MSL Next Pro and League Cup matches. Univision is reportedly interested in televising the “League Cup”.

The World Cup: The 2022 MLS Cup is scheduled for November 5, a few weeks prior to the start of the 2022 FIFA Men’s World Cup from Qatar. Unlike the 2018 World Cup, the U.S. Men’s squad qualified for the tournament which should spark more interest. Looking further ahead, the MLS is expecting when the United States (along with Canada and Mexico) hosts The Men’s FIFA World Cup in 2026 it will help grow the soccer fan base. The MLS was launched in 1996 in the aftermath of the last time the United States hosted The World Cup in 1994.