The MLS Playoffs have started and it reached a record amount of eyeballs on screens across the world.

But a lot of us wouldn’t know about that because the games happened on Apple TV. And not a lot of people watch Apple TV (see graph below).

Sports are a huge driver of eyeballs. It crosses all demographics, which is why a lot of networks pay up for them for 2 reasons:

1. So networks can drive eyeballs to their original programming.

2. In a world of algorithms and spoon-fed recommendations, the need for collective viewing is only gonna get bigger(we think).

We’re going to talk about both of these things through the MLS/Apple TV deal.

Let’s hit the sponsor get started:

The MLS and Apple TV Deal

First, let’s break the deal down.

2 years ago, the MLS became the first sport exclusively streaming behind Apple TV, and it’s been a marriage made in perfect circumstances.

1. For the MLS, it was a no brainer since it was being reported that NBC, CBS, AND FOX weren’t showing a lot of interests in signing on/ or retaining media rights. Apple is guaranteeing the MLS a minimum of 250 million dollars a year for the next decade, which is almost TRIPLE what Fox, ESPN, and NBC were paying.
   

2. For Apple, the deal makes sense because it allowed them to buy an avid fan base in hopes of turning it into a dedicated user base of its streaming service (sports as driver for original programming).

The effect of exclusive media rights held by a streamer

Since they signed this deal, the sport has been put behind a paywall, that means less random exposure to a match being played on a network (need for collective viewing across all ages).

But this might not matter in the end because if you have a subscription base, that’s a core audience that probably watches more matches and is more engaged. But guys, Messi is on Inter Miami. They’re in the playoffs, the highest level of football competition in this country.

And it…doesn’t feel like a big deal to American audiences! And don’t give us that ‘because Americans don’t watch football’ crap. Because it’s just not true anymore (see below). Attendance is up, ratings are up. People are watching this sport.

Streamers don’t know how to sell live television…yet

But there’s another drawback lurking in the shadows that we don’t think enough about: Apple, Amazon and Netflix do not yet know how to sell live television. There’s no Monday Night Countdown, or the NBA on TNT for MLS. Half of sports is narrative, and if you don’t have great narrators, viewers aren’t tuning in. 

But again, it’s so much money compared to the last deal, that you may just say, whatever.

None of this is investment advice, btw.

Have a great week!

Ahmed and Peter