Los Angeles Dodgers center fielder Cody Bellinger (35) steals second base as St. Louis Cardinals second baseman Tommy Edman (19) takes the late throw at Dodger Stadium in the 2021 National League Wild Card game.
Robert Hanashiro | USA TODAY Sports
Apple is in talks with Major League Baseball to acquire the rights to its weekday package, according to people with knowledge of the deal who asked not to be named because discussions are confidential. An agreement would, for the first time, align the most valuable U.S. tech company with a pro sports media package and give Apple a major content boost for its streaming service, Apple TV+.
MLB’s weekday package allows a network or streaming service to showcase baseball games on Mondays and Wednesdays during the regular season. MLB and Apple declined to comment on a potential deal, which was first reported Monday by the New York Post.
The rights aren’t exclusive, as the games can still be aired on the regional sports networks (RSNs) for the teams that are playing. Still, for Apple it’s an important entry point, said Lee Berke, CEO of LHB Sports, which advises the sports entertainment industry.
Apple is using its almost $3 trillion market cap and $191 billion in cash and equivalents to expand its business well beyond iPhones, computers, watches and the App Store. The company introduced Apple TV+ in 2019 as a $5 per month subscription service that would run across all the big streaming platforms and compete with the likes of Netflix and Amazon for original content.
“When you’re looking to develop a content strategy on any media platform, one of the quickest ways to do it, and expensive by the way, is to add sports,” Berke said.
For MLB, finding new revenue sources in the offseason is critical as the league contends with its ninth labor stoppage in history. MLB owners locked out players in December as the parties feud over how the economics generated by the sport should be shared.
Media rights represent an increasingly lucrative source for the league, but MLB has to get creative in maximizing revenue.
In January 2021, MLB was in the midst of a contract renewal with ESPN, following a deal that paid the league $5.6 billion over eight years and included exclusive games on Sunday nights as well as midweek rights. The games were semi-exclusive, because they were also shown on RSNs.
Octagon analysts used 108 out of 114 games from MLB’s 2018 to 2020 seasons to determine average viewership on the Monday-Wednesday package on ESPN, not including ESPN2 broadcasts. They found average viewership of 761,434 in 2018, dropping to approximately 632,000 in 2019 and 358,947 in 2020.
In May, the two parties agreed to carve out the weekday games, which reportedly cut ESPN’s fee from $700 million per year to a reported $550 million annually. The new deal runs through 2028, and ESPN retains exclusive rights to “Sunday Night Baseball,” the Home Run Derby and MLB playoff wild card games.
While the gap between ESPN’s old deal and the new fee amounts to $150 million a year, industry experts suggested that MLB sought $350 million per year for the weekday rights.
Daniel Cohen, senior vice president of Octagon’s global media rights consulting division, said a traditional media company would be unlikely to meet MLB’s asking price. And Turner Sports will add its own weekday game on Tuesday nights as part of its new $3.2 billion package that pays MLB $470 million per year, up from $325 million.
But Berke said a cash-rich tech company like Apple would “absolutely” pay it.
“Apple has the money to purchase a wide range of sports over and above the MLB package,” Berke said. “But to demonstrate they can do this properly, they have to work their way up the ladder.”
Berke likened Apple’s position to a situation another company faced a century ago.
In the early 1920s, electronics manufacturer RCA created radio sets. The company then purchased radio stations and, in 1926, created the National Broadcasting Co. NBC agreed with MLB to air the first World Series on the radio. (NBCUniversal is now the parent of NBC and CNBC.)
“RCA was trying to sell radio sets, and Apple is trying to sell headsets,” Berke said. “The same principle applies.”
Apple has a whole ecosystem that it can present to consumers, he said.
“You need to get in the game if you’re Apple,” Berke said. “If Apple is looking to increase usage of Apple TV+ but also looking to sell additional hardware – phones, watches, iPads – then sports provides you with a ready-made mass audience.”
The pandemic changed media consumption, making a deal between MLB and Apple more attractive to both parties.
MLB gets younger people, who have become even more glued to their devices for content while stuck at home. And with RSN’s in financial danger as consumers cut the cord, the league needs alternatives to linear TV.
“You’re getting in front of your next generation of fans, which is absolutely critical for every effort you’re doing going forward,” Berke said. “The games need to be there on those screens for new fans to be exposed to it.”
A view of the fans watching from the outfield during the game between the Houston Astros and the Atlanta Braves during the first inning of game six of the 2021 World Series at Minute Maid Park.
Jerome Miron | USA TODAY Sports
After years of simulcasting “Thursday Night” games and building up its technology to handle a large volume of livestreaming, Amazon lured a $1 billion per year NFL package in March 2021. Now the company is trying to get lead NFL analyst Troy Aikman to join its production staff from Fox.
In 2019, Amazon also purchased shares of the YES Network, which airs New York Yankees games, and streams the regular-season contests. It has a deal with the Women’s National Basketball Association around its in-season tournament, an idea the NBA wants to adopt, as well as tennis streaming rights.
“Step by step, they’ve built a very substantial portfolio in sports, not just in the U.S. but worldwide,” said Berke. “It’s a multiyear process to demonstrate that you have the chops in terms of production, sales, distribution on a professional level that’s glitch-free.”
Apple and MLB have some history together, dating back to 2008 when the league debuted its iPhone app. Two years later, Apple asked MLB to help with the launch of the iPad.
Should Apple now land MLB rights and prove it can compete with Amazon in attracting users with live sports, more opportunities could open up.
“If you’re interested in making a bid for the NBA, I think it helps you if you have a track record in sports leading up to it,” said Berke.
(With inputs from CNBC)