Big tech companies compete for sport broadcast rights
By: Leela Xie
After dominating the online worlds of music and retail for more than a decade, Apple and Amazon have set their sights on negotiating for media rights held by the National Football League, Major League Baseball, Formula One racing, and college conferences to increase viewership of their streaming-subscription services.
Their objective is to replace DirecTV, an American multichannel video programming distributor, for rights to the National Football League Sunday Ticket. The NFL (National Football League) Sunday Ticket package shows out-of-market Sunday NFL games that are not shown on local television.
The development of digital titans is both thrilling and worrying for sports organizations, as they fear competition from corporations that produce tens of billions of dollars from strong positions in other sectors. Last year, sports accounted for 95 of the top 100 most-watched television shows.
“It’s hard when you’re competing with entities that aren’t playing by the same financial rules,” said Bob Iger, former chief executive, and chairperson of the Walt Disney Company, which owns ESPN.
Apple has prioritized securing the NFL Sunday Ticket package, sending its chief executive to meet with league executives and prominent team owners. Amazon, ESPN+, and YouTube are still interested.
Fans will still be able to watch all the games on Sunday, regardless of who gets the rights, but they will most likely have to pay a fee to add the service to their Apple, Amazon, ESPN+, or YouTube subscription, according to some of the dozen people interviewed. It is unclear if that surcharge would be more or lower than the $294 annual fee charged by DirecTV, they noted.
Apple started its $4.99 streaming service, Apple TV+, in 2019 and has an estimated 16.3 million paid subscribers in the United States, according to Antenna, an analytics firm for video on demand services. Amazon claims more than 200 million subscribers to Amazon Prime, which began in 2006 as primarily a faster shipping service and later added on-demand movies. Today, some customers pay $8.99 a month for access to Prime Video only.
Tech companies are willing to pay a premium to integrate sports in their offerings. Last year, Apple agreed to a 10-year, 2.5-billion-dollar contract for global rights to 1,000 games, as well as a new package of two weekly Friday night Major League Baseball games.
Amazon agreed to pay $1 billion per year for Thursday night National Football League games and more than $100 million per year for Formula One racing rights in the United States, according to SportsBusiness Journal. Despite their efforts and disruptive potential, Apple and Amazon have been unable to obtain a significant rights package in the United States.
The challenge for Apple and Amazon will be persuading sports leagues that they can produce high-quality broadcasts, stream games to millions of concurrent viewers, and keep sports fans who are accustomed to switching between games with a remote rather than surfing to a new app.