Report: Apple TV Wants The NFL Sunday Ticket

Having secured the rights to air both Major League Baseball and Major League Soccer games, Apple is reportedly on the hunt for one of the most sought-after assets in professional sports, the NFL Sunday Ticket subscription service.

Barron's reports the satellite TV service DirecTV has had the rights to Sunday Ticket since 1994, but the current arrangement ends after the coming season. Sunday Ticket allows subscribers to watch all out-of-market Sunday afternoon football games.

According to various media reports, the bidding for Sunday Ticket is dominated by companies with online streaming services, including not just Apple, but also Amazon.com, Alphabet, and Disney, the parent of ESPN. Apple didn’t immediately respond to a request for comment.

In a weekend research note, Evercore ISI analyst Amit Daryanani took a look at what winning Sunday Ticket might mean for Apple. There are potentially huge implications for the whole streaming-video sector.

DirecTV is paying about $1.5 billion a year for Sunday Ticket, Daryanani wrote, predicting that the price will go up substantially for whoever wins the rights starting in the 2023 season. The package would likely cost Apple $2.5 billion a year, he said.

Although Apple should be able to boost the number of subscribers to Sunday Ticket well beyond the current 2 million, he said, “there is no real plan for the service to be standalone profitable.” If Apple sticks with the current subscription price of $300 for the season, it would need to quadruple the subscription base to about 8 million in order to break even, assuming that $2.5 billion a year is the right price.

Apple has an obvious structural advantage over DirecTV in that viewers don’t need a satellite dish for Apple TV+, Daryanani said. But the average NFL game in 2021 had 17.1 million viewers, while the number of people who want the ability to watch every out-of-town game is likely a lot lower than that, he said.

“The move to acquire the NFL rights would not necessarily add to the bottom line, but it is a good way for Apple to differentiate the TV+ offering in an increasingly crowded streaming environment,” Daryanani wrote. 

Amazon is paying $1 billion a year for the rights to air Thursday Night Football, while ESPN is paying $2.7 billion a year for Monday Night Football. Other games will continue to air on Comcast CMCSA –2.74% ’s NBC, Paramount’s CBS , and Fox, with each reportedly paying $2 billion a year to the league.

Apple could take a radically different approach, simply rolling Sunday Ticket into the standard Apple TV+ subscription, priced at $4.99 a month. If you assume a four-month season, with football fans dropping the service at the end of that time each year, at that rate Apple would need 125 million additional subscribers to reach breakeven on the cost of the NFL package.

That isn’t realistic. Netflix has about 220 million subscribers, about 73 million of them in the U.S. and Canada. About 112 million people watched the 2022 Super Bowl broadcast on NBC.

But with that strategy, Apple would be betting that paying for Sunday Ticket would vault Apple TV+ to the fore in the intense battle for consumer streaming dollars. The company would become a far more formidable rival for Netflix, Disney, Paramount (PARA), and other streaming services.