Sharply higher sports leagues' demands and content owners' right fees may not be a forever thing.
Some TV networks/streamers have built in key business metrics to make sure they get their money's worth, especially for long-term future viability.
Apple TV+'s recent 10-year, $2.5 billion deal with Major League Soccer seems to be one of those.
That deal is pegged to the potential upside of the streamers' subscriber growth.
That kind of makes sense. But remember, this is Major League Soccer -- not the NFL or the NBA.
A new Altman Solon study of 150 global sports executives said 85% are concerned that sports-rights owners (the sports leagues and teams) are not addressing media partners' needs -- needs that would seem to include better profitability, sustainability, for a strong business future.
For years, many TV networks may have overspent on high-priced packages from sports leagues -- the NFL and NBA -- at least in terms of resulting upside.
Narrowly analyzing some sports deals can actually mean operating at a loss.
But the umbrella effect of having a major sports franchise on one’s network or platform is still worth it when, for example, getting advertisers to buy into all its content. The high value of some sports can push consumers on a promotional level to other content.
Ask yourself why Fox Corp. did not want to overspend on “Thursday Night Football,” for example, for another multi-year package -- a deal that landed exclusively with Amazon Prime Video.
Somewhat clear consumer consumption/price equations then make sense in the new streaming world.
The study notes that for major sports leagues such as European football, and major U.S. sports leagues/associations, consumers are ready to spend anywhere from $20 to $25 a month.
Could Apple TV+'s deal with MLS be the start of new thing when it comes to attracting and keeping new consumers -- especially as sports leagues continue to focus on the next generation of young viewers?
But... who is really going to play ball?