Apple’s MLS deal confirms the direction of travel is clearly D2C
Last month, Apple and Major League Soccer (MLS) announced a ten-year, US$2.5 billion global broadcast partnership in a deal that has raised eyebrows in the sports media industry for a number of reasons.
Firstly, it’s arguably the most significant ‘big tech’ sports deal to-date. Netflix has remained focused on documentary formats, Facebook has positioned itself as a marketing and distribution partner, and Google has yet to move past being a tech services and advertising partner to sport. Only Amazon has invested in multiple live sport rights, but these have been opportunistic rather than part of a dedicated global strategy.
Secondly, the partnership - worth a guaranteed $250m per year to the MLS - once again proves the value of live sports content, where rights valuations continue to buck the wider macro economic financial trends. The previous nationally-based agreements with ESPN/ABC, Fox and Univision were worth in the region of $90m per season, so have seen a vast increase year-on-year as a result of this deal.
Finally, the length and scope of the partnership: 10 years and on a global basis at a time when many rights holders are still intent to sell multiple rights packages over a shorter time frame in an attempt to generate bigger fees by using the competition to drive up the price and the collective marketing spend.
The MLS is growing in popularity, but is by no means a premium property. It’s not so long ago that they were distributing rights in non-US markets for free. The fact that one of the world's most recognisable brands has chosen to partner with them now is noteworthy, but this is a model Joymo has already been supporting in recent months to help provide rights holders of all shapes and sizes with direct distribution at scale.
In April, we announced a 10-year agreement to become the Official Broadcast Partner of British Weight Lifting and to live stream their elite level events, live and on-demand, worldwide for the next decade. We followed this with a five-year deal with Basketball Ireland to stream over 650 National League games-a-season via the basketballireland.tv online platform that we are building and managing for the organisation.
We at Joymo continue to target long-term partnerships with sports rights holders of all shapes and sizes who share our vision and ambition for what D2C streaming can achieve in terms of reach, fan engagement, data integration and monetisation potential.
We exist to empower sport content owners to take greater ownership of their IP, reward fans with more live events and better-quality coverage and create additional commercial opportunities that can make a fundamental difference to the way their sport is promoted.
It is our belief that global streaming platforms will prove to be a viable alternative to the domestic and global pay-TV relationships that have been the pillar of the sports economy for the past 40 years. And not just at the top end, where the money has flowed freely for rights during this period. D2C streaming has the potential to revolutionise the way rights holders approach content production and distribution at all levels of the pyramid.
As I outlined last month, there has long been a perception that developing owned and operated services is expensive and resource-heavy, but, with Joymo, you can start streaming and selling digital passes, tomorrow. We provide a cost-effective platform and the technical expertise that allows all rights holders to focus on content delivery, marketing and maximising revenues around the live stream.
Apple’s partnership with the MLS is just the latest example of why rights holders should embrace a direct-to-consumer strategy sooner rather than later. The direction of travel is clear, highlighted again by Nielsen’s recent analysis which documented that OTT subscriptions grew by 61% between 2019 and 2021.
And whilst live content is often the driver for launching a streaming platform, it is also an enabler to start telling broader stories about your sport, its teams and competitors. The F1-focused Drive to Survive series has become the poster child for behind-the-scenes sport content available to a global streaming audience.
It has been credited with increasing the F1 audience substantially in the US and that has had a direct impact on the media rights value in the market, where ESPN are reported to be increasing their annual rights fee from just $5m-a-season for the last three years, to a whopping $75-90m for the three year cycle from 2023-25.
As a rights holder, investing in a D2C strategy should be high on your list of priorities. The numbers are starting to add up and those who make the move and take ownership of their IP are set to prosper in the long-term.