Apple Is Paying Over $100 Million For Live Sports

Huddle Up is a daily letter that breaks down the business and money behind sports.

Join more than 54,000 professional athletes, business executives, and casual sports fans that receive it directly in their inbox each morning — it’s free.

The newsletter is presented by…

The Philadelphia 76ers host the Brooklyn Nets tomorrow, and the best way to get in on the action and win major cash prizes is through Underdog Fantasy’s Pick'Em game.

Will James Harden go off against his former team? Will Kevin Durant outscore him? Go to UnderdogFantasy.com and pick Over or Under on Harden and Durant's points lines, and you can triple your money if both picks hit.

But here’s the best part — sign up with the code “HUDDLEUP” and Underdog will DOUBLE your initial deposit with up to $100 in bonus cash.

Hey Friends,

Apple is *finally* getting into live sports, with CEO Tim Cook announcing a multi-year exclusive streaming rights deal with Major League Baseball yesterday.

Here’s what we know so far:

• Apple will stream 2 games (doubleheader) each Friday night

• These games will only be available on AppleTV+

• In addition to a pre-and-post-game show each Friday night, Apple will also have “MLB Big Inning,” a live show featuring highlights and look-ins airing every weeknight during the regular season — this was part of MLB.tv last season and will continue to live there in addition to AppleTV+.

As for price, the New York Post is reporting that the deal cost Apple between $100 million to $150 million, and a subscription to AppleTV+ is currently $5/month.

Now I would be remiss not to mention the irony in Rob Manfred and Major League Baseball signing exclusive 9-figure streaming deals with tech giants despite not currently having a collective bargaining agreement with the players’ union in place.

But that’s neither here nor there — the streaming deal with Apple is done & it’s still very likely that we have a 2022 MLB season, albeit a slightly shortened one at that.

But I think it’s interesting that we are finally starting to see more streaming deals.

The signs have been evident for a while. The total number of US households paying for traditional cable TV has declined from 100 million in 2014 to 70 million today.

That’s a 30% drop in just a few years, and when you look at the numbers compared to the growth we’ve seen in the total number of US households, roughly only 54% of households have pay-TV today, compared to 82% in 2014.

And the pandemic dramatically accelerated this shift, with several

But the dichotomy in this situation is that live sports are the only thing holding the cable bundle together — for example, live sports accounted for 94 of the top 100 most-watched U.S. TV broadcasts of 2021.

The Macy’s Thanksgiving Day Parade, Oprah’s sit-down with Meghan and Harry, and a few events around the Presidental election cracked the Top 100, but the truth is that nothing else on pay-TV even comes close to a premier sporting event.

And for additional context on just how important live sports are to the cable bundle, here are the viewership numbers for cable news last month (Fox, MSNBC, CNN, etc.).

The top news program averaged less than 3.7 million viewers per day, while the NFL averaged more than 17 million viewers per game last season — that’s 4.6x more.

This divide between live sports and everything else is setting up an interesting battle.

The traditional networks are being forced to increase their annual bids to maintain the most valuable piece of their business, and streaming services like Amazon Prime, AppleTV+, Disney+, ESPN+, Peacock, and others have simultaneously found product-market fit and are driving prices higher by increasing the demand.

Remember, if supply stays constant and demand increases, the price goes up.

This has been a remarkable development over the last few years, and the overarching theme has become completely obvious to anyone tangentially connected to the industry — consumer habits have changed & streaming is here to stay.

There are still a lot of questions to be answered: How much bigger will these streaming deals get? How quickly does that happen? How long do traditional pay-TV providers hold on? At what point do we start to see carnage?

I think most people probably have an opinion on how this will play out, but more than anything, time will be the most significant determining factor in seeing what happens next — my guess is that we are still in the first inning though.

Sure, Amazon is spending $1 billion annually on exclusive rights to Thursday Night Football, and Apple just shelled out over $100 million for exclusive rights to a couple of MLB games per week, but this is the starting point for these tech behemoths, not the finish line.

Apple and Amazon bring in $365 billion and $470 billion in annual revenue, respectively, meaning these deals are virtually insignificant to their balance sheet.

Of course, you don’t just spend a billion dollars because you can, but that’s my point; watching what happens when these companies go all-in will be fun.

I hope everyone has a great day, and we’ll talk tomorrow.

Your feedback helps me improve Huddle Up. How did you like today’s post?

Loved | Great | Good | Meh | Bad

The Joe Pomp Show: My convo with Cincinnati Bengals CB Chidobe Awuzie is live!

We discuss:

• The free-agent process

• Playing in the Super Bowl

• What he spent his first million dollars on

• Investing in private businesses

• Crypto, NFTs, and more

Listen, subscribe, share, and enjoy!