Sunday Ticket: How Apple dropped the ball

From "Why an Apple-NFL Sunday Ticket marriage didn’t come together" posted Wednesday in The Athletic:

The NFL longed to be in business with arguably the globe’s most important company and spent much of the past year trying to make that happen. And the deal seemed like a natural for Apple, which is trying to grow Apple TV Plus...

But several weeks ago the media talks broke down. Why?

There are some obvious answers. Apple reportedly wanted to pay less than the NFL sought so it could offer the product at lower prices than incumbent DirecTV, but the NFL’s contracts with Fox and CBS disallowed that (lower Sunday Ticket prices could drive viewers away from the Sunday afternoon network windows). DirecTV’s Sunday Ticket offerings start at around $300 for a season.

“The other tech companies are far more advanced in where they are with their business model for media, for broadcasting,” said a person close to the NFL. “Apple is very far along in media with music but the other firms that are, you know, Amazon is much further along. Google and YouTube are much further along. Apple is really behind.”

Apple and the NFL also could not agree on whether the company would get the right to distribute Sunday Ticket on as yet non-existent platforms. Apple is heavily investing in virtual reality and augmented reality, nascent platforms in which sports are so far largely not viewed. As a result, Apple wanted what is dubbed known and unknown rights, individuals familiar with the NFL and Apple said. In other words, there is no known virtual reality market for Sunday Ticket, but there might be one day.

Imagine a virtual reality device offering fans a Sunday Ticket experience where it is as if they are viewing from the 50-yard line seats, said Tom Richardson, senior vice president of Mercury Intermedia and an adjunct professor at Columbia University’s sports management program. Such a platform might seem a long way off, but Richardson said it could be coming in the next 24 months...

Richardson in the 1990s worked for the NFL and NHL, and recalled similar situations arising in the emerging new digital world when companies asked if the media rights getting negotiated were good to be shown on “everything.” And, like now, the answer was no.

“The league doesn’t like to compromise and Apple as a two-and-a-half-trillion-dollar company, whatever they are now, they obviously kind of have their own way of doing business.”

My take: In other words, Eddy Cue fumbled it. And as we know, Google got the deal.

24 Comments

  1. Robert Varipapa said:
    Fail to see the allure of American football.

    Maybe they should go for professional wrestling? Don’t they have more viewers (not me)?

    7
    December 24, 2022
  2. Neal Guttenberg said:
    I don’t watch much NFL football anymore and in the college game, I am watching less because of all the changes occurring because of NIL money as well as the transfer portal. So for me, it is probably ok that Apple didn’t overspend on this package. Cue is easy to blame because he has fumbled the ball quite a few times. We will have to see if he deserves the blame or not.

    The allure of sports on virtual reality is interesting. Does the present contract include AR/VR rights as a carve out? If Apple introduces the AR/VR hardware next year, is it something that they can buy into the contract to provide AR/VR services, or maybe, even better, be paid to provide those services if there is the software to take advantage of it in certain sports?

    5
    December 24, 2022
  3. There’s an element of online gaming intertwined with professional sports now. Every friend into NFL under the age of 60 has fantasy football team(s), bets on NCAA Finals and places every imaginable type of wager on all types of sports, including Australian rules football. It’s rampant.
    New Jersey started earlier so online gambling using apps is more widespread. Financially devastating to most individuals though those that network and follow individual athletes do win big at times.
    A little like investing, huh? Same exact crowd started Robinhood or Schwab accounts in early 2020, bet on meme stocks, crypto, and now NFC running backs.
    Apple will likely be in a position to offer the best (only?) fully-immersive AR experience for any live event be it sports, music or travel. The NFL will be back in the picture as soon as Cupertino announces their new helmet/headgear, the latest in AR wearables.
    Neuroscientists exploring a bloodstream with nanobot cameras need a decent viewer too. I’m sticking with AAPL.

    6
    December 24, 2022
  4. Greg Lippert said:
    Saying no is just as important as saying yes

    14
    December 24, 2022
  5. Gregg Thurman said:
    In other words, Eddy Cue fumbled it.

    I’m getting tired of this meme. Cue gets way to much credit when a negotiation isn’t successful. He is not a loose cannon, out doing what HE thinks is best for Apple. Cue operates at the direction of Tim Cook and the Executive Committee.

    In every case that a negotiation failed, it was because APPLE LEADERSHIP said NO.

    7
    December 24, 2022
    • S Lawton said:
      Gregg, Eddie Cue is Apple Leadership. Are you suggesting Tim Cook is a micro manager who requires every decision go through him?

      0
      December 24, 2022
      • Gregg Thurman said:
        No. I’m Saying, not suggesting, that negotiations at this level are discussed among leadership. In those discussions leadership will formulate a plan on how they’ will use the asset, and how much they will pay and under what terms. Cue will be a part of those discussions and he will report back to leadership on the sellers position, how Apple tweak its offer.

        Negotiations continue as long as there is progress being made. When progress ceases and the divide is to great negotiations cease, but only after conferring with leadership.

        Failure to get Sunday ticket at the price and terms Apple leadership was willing to abide by is not a failure on anybody’s part. It just means the buyer and seller couldn’t agree on price and terms.

        Apple and Google weren’t the only bidders. There were other bidders, who also said No. You only hear about Apple saying no, because Apple stories generate eyeballs, whereas the other firms do not.

        9
        December 24, 2022
        • S Lawton said:
          “You only hear about Apple saying no, because Apple stories generate eyeballs, whereas the other firms do not.'”
          YouTube, Disney and Amazon don’t generate eyeballs? News too me. Maybe we don’t read the same publications.

          1
          December 24, 2022
          • Gregg Thurman said:
            I can guarantee we don’t.

            3
            December 25, 2022
  6. Robert Paul Leitao said:
    Apple didn’t drop the ball. It punted the ball and let it roll out of bounds on the opponent’s financial 1-yard line. That opponent has a lot of field to cover to break even on the possession while Apple positions to recover the eventual fumble. Apple will invest in content, but not on disadvantageous terms and conditions.

    13
    December 24, 2022
    • John Konopka said:
      Totally agree. This was not a make-or-break decision for Apple. Better to walk away from the deal than get saddled with something that will be a problem.

      5
      December 24, 2022
    • S Lawton said:
      Robert,
      “Apple will invest in content, but not on disadvantageous terms and conditions.”
      It’s important to remember that the same goes for media. They also will not agree to terms and conditions disadvantageous to them It took Eddie a decade before Eddie could get them to yes.

      2
      December 24, 2022
      • Robert Paul Leitao said:
        S Lawton: Although it’s been many years since I left the entertainment/media sector, the culture has been very much one of control. Apple strikes fear of a loss of control and, if Apple succeeds on a grand scale through innovative approaches, even if it works out in the financial interests of the content owners, show business is uncomfortable being “shown up” by the tech giant. There’s a lot to wade through in negotiations and that does take time, even years. Apple isn’t a starry-eyed enterprise willing to dig deep into its pockets while falling to the allure of glamour, fame and, in the case of sports programming, the mass appeal of brawn and grunts.

        1
        December 24, 2022
        • S Lawton said:
          Robert,
          “Apple strikes fear of a loss of control “. Theres a reason for that. Apple wants total control. They’ve shown that with book publishers and newspaper and magazine media. Video are all interconnected with these companies and dont want to follow. Thats why it took years and finally some flexability on Apple’s part to finally be able to make deals. That and a whole packet of money.

          1
          December 24, 2022
  7. Romie Lucas said:
    Forgive me if this seems naive, but it sounds like this wasn’t a good deal for Apple based on existing contracts/complications (etc.) and so they decided not to do it. Everyone expected them to do this deal and it didn’t happen-like when so many were saying they should buy Netflix. We have little insight into the financial details of this deal. But as usual, this has to be labeled a failure. Perhaps the real failure would have been to cave and do a deal that wasn’t good for them just to have the brand association. Maybe next week someone will write a story about how Apple failed in a bid to put on the Olympics but decided not to because nobody ever makes money doing so. Heaven forbid the narrative about Apple should change.

    14
    December 24, 2022
    • Gregg Thurman said:
      Up voted you Romie.

      3
      December 24, 2022
  8. Michael Goldfeder said:
    The NFL wants to have its cake and eat it too. Then have someone else pay for the privilege to watch them devour it from an overpriced seat in a luxury box that only Elon Musk, Warren Buffett, and perhaps a Kardashian could afford. Kudos to Apple and Eddie Cue for telling the NFL that since the iPhone is the preferred phone of choice by more than a billion people, the cache of being the official smart phone of the NFL is of no collateral benefit like it is to the beer industry, soft drink industry, snack industry, chicken wings industry, football jersey industry, or the gambling industry. Apple is wise to move on and the NFL will be knocking on the door of Apple once their AR glasses are released.

    As Robert said: “Apple will invest in content, but not on disadvantageous terms and conditions.”

    8
    December 24, 2022
    • S Lawton said:
      Michael,
      “the NFL will be knocking on the door of Apple once their AR glasses are released”
      And when will that be?

      0
      December 24, 2022
      • Michael Goldfeder said:
        @S Lawton: As soon as Eddie Munster or Ming-Chi Kuo tell us.

        Since it is the holiday season, and I certainly don’t want Santa to put me onto the “naughty” list at this late date, then for the sake of Rudolph and the rest of the reindeer, I’ll use their regular introductions of: Mark Gurman or Ming-Chi Kuo.

        3
        December 24, 2022
  9. David Emery said:
    NFL spins this as “Apple failure.” I’m not convinced. Feels more like “Apple insufficiently desperate to meet NFL’s terms.”

    10
    December 24, 2022
  10. Gregg Thurman said:
    Feels more like “Apple insufficiently desperate to meet NFL’s terms.”

    Exactly. Do we all agree that Apple has the cash to beat Google’s $$ bid? If that’s true, and I believe it is, then the sticking point is the terms. Who knows, Apple’s monetary bid may have been higher than Google’s and the NFL went with the bid that offered terms more to the NFL’s liking.

    4
    December 25, 2022
  11. Daniel Epstein said:
    Consider what it takes for Apple to takeover a company of the size of Beats, a rare instance and what the rate of return they expect. The NFL Sunday ticket price does not seem to have the rate of return Apple would like to spend that much money. These kinds of negotiations are often unsuccessful for most of the bidders. Prestige buys in Media don’t usually have the profit margin Apple likes. I don’t think Apple wanted the NFL package for the board to go to the games. If they really wanted it anywhere the price that You Tube got it for.

    0
    December 25, 2022
    • Michael Goldfeder said:
      @David: Thank you for posting that link.

      “They’re not making money on this — this is a loss leader,” Michael Pachter, managing director of equity research at Wedbush, told Yahoo Finance Live..”

      A $2 Billion Loss Leader has to be a record!

      0
      December 26, 2022

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