Thread by @SportsProNick

So @Apple and @MLS joined forces in what could be one of the most intriguing + disruptive media deals the sports industry has seen. 10 years $2.5bn guaranteed. But there's more to it than just the $bn price tag.
It's a long one, but here's a thread on it:
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What is it?

•10 Year global, exclusive streaming rights deal
•Every Match will be available live (previously regional blackouts)
•Mainly english only with some spanish and french in certain markets

•Served on Apple TV app as a special MLS dedicated subscription product (not just part of Apple+) (app within an app - Important - will cover why shortly
•Some matches will be free in AppleTV+, but most will be via the new paid subscription service

•It will also include original programming, highlights and wider news coverage
•Any linear deals would be non-exclusive with the Apple platform

Let's look at the financials:
•Previous rights cycle for US rights generated $90m annually but included some National matches, and Linear rights
•This deal $250m global per annum (streaming only)
•$250m number is a minimum guarantee - not a rights fee.

•MLS has been guaranteed an income annually, which will increase once the subscription platform surpasses certain targets.
•Does not include any linear. Does not include the USSF rights for internationals.
ESPN is in talks w/ MLS about a potential linear deal. (per reports)

•Production costs will now sit with the MLS. Cannot be understated that doing all this internally is a big project.
Equally not unprecedented for a major league to do this (e.g. Premier League and The Bundesliga do it). Means a hefty chunk of their income will go to production

How did we get here:
•The MLS made a decision a number of years ago that it would set itself up for this possibility, lining up its media rights to all expire at the same time, including the regional deals that existed in local markets

•This strategy by the MLS was likely a catalyst for them to pull the trigger on going in on sport.
•This is a unique position for a major sports property as rights are typically extremely fragmented with their rights and rights cycles, aiding discoverability and revenues...

... but crippling the top tier fans experience of the sport. The MLB for example has 8 different broadcast partners in the US alone, as well as it’s MLB Streaming rights, RSN partnerships and more.

Why did they do it?
•For the MLS: they get one of the most powerful tech companies backing their growth. They get someone who has a direct relationship with consumers that knows everything about them - better than the user does itself.

•For both parties it could be a case of circumstance – MLS didn’t get the finances they were after from the incumbents, and Apple would have loved the opportunity to pull of a deal that is void of the usual restrictions that exist with the fragmented rights market.

•For Apple: making a major move in sports has been long expected after Amazon Sports head Jim DeLorenzo joined 2 years ago.
Worth noting Jim likely led on the ATP + Amazon deal in 2019 - a global, exclusive streaming deal for a major set of rights from the tennis property

•Their recent MLB deal was seen as a ‘toe-dip’, and now they're set up to continue spending on rights that 'matter', including the much talked about NFL 'Sunday Ticket' package.
•More importantly NBA rights are up soon, and could be a huge carrot for Apple given the scale

•Apple has shown a history of being patient rather than needing to be first movers.
•Important to note though the spend on these rights will be less than 9% of their spend on original content in 2023 per @AmpereAnalysis

•For Apple, it provides an opportunity to test all its strategic and technological capabilities so that they're able to create a case to any rights holder they'd like to partner with.
•This relationship is completely unique to anything we've seen, at least at this scale.

What's the risk?
•Apple has 5.6% of total SVOD Market share (per just watch)
•Will discoverability be an issue? AppleTV is a fairly closed platform, meaning the work of major broadcasters to create awareness will be missing.

•At a time where MLS is on the rise, is this move a risk to its growth, whilst other Soccer leagues like LaLiga and EPL cash in on the support of major players like ESPN and NBC to amplify their product?
•or is the uniqueness of this deal the home run they believe it to be?

•And of course financially this is a drop in the ocean for Apple.

What makes it so special?
•It's Apple's first big move in sports and marks them as a serious player from here on for sports rights

•They will have major sports knocking on their door to discuss how they can partner.
•Apple TV could act as a super aggregator of sports D2C platforms (i.e. F1TV or GamePass) , or JV style partnerships as in the case with the MLS due to how they'll present the product

•It could reset the way media rights deals are done, given it’s part minimum guarantee, part shared upside. Not a straight up fee. It's more of a licensing deal if you compare it the traditional deal formats

•Apple is building out their sports ecosystem. They recently launched a new set of features dedicated to improving access to sports news, highlights and content. This will be a big driver for them to push users of this new product to things like the MLS app.

•Given they own the phone, they can use this in ways unseen by other traditional broadcast partners. This is perhaps the most exciting part.
sportspromedia.com/categories/bro…

•Apple can push subs + content as hard as they like. And costs to market the product will be negligible due to it being their own platform
Overall this deal, isn’t the one with the biggest price tag, but it just might disrupt the entire way this industry looks at broadcasting

If you want to hear more about this, then listen in to our weekly #StreamTimePod, where we discuss all things streaming in sports, including this deal in a recent episode:
Apple: podcasts.apple.com/us/podcast/str…
Spotify: open.spotify.com/show/6V4AOXgDQ…
Others: podfollow.com/streamtime-pod…

And check out this great breakdown and explainer by @MickeyCaskill who gives his take on it: sportspromedia.com/analysis/mls-a…