More than a decade after Apple disrupted the music industry and Amazon upended retail, the tech giants have set their sights on a new arena.
The National Football League, Major League Baseball, Formula One racing and college conferences hold media rights that Apple and Amazon are trying to get.
According to five people familiar with the process, they are competing to replace DirecTV for the rights to N.F.L. Sunday Ticket. Two people familiar with the offer said that Google had also made a bid for the rights.
For sports leagues and media companies that fear competition from rivals that collect tens of billions of dollars from dominant positions, the tech companies' interest is a thrill. Sports accounted for 95 of the 100 most watched programs.
Bob Iger, the former chief executive and chairman of the Walt Disney Company, said that it was difficult to compete with entities that weren't playing by the same financial rules.
DirecTV did not bid on the N.F.L. Sunday Ticket package, so it is now available to1-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-6556 It has lost as much as $500 million per year on the package, but it has a reliable base of 2 million subscribers.
According to a dozen people in the sports, media and tech industries, Apple is the leader. The sale of N.F.L. media assets, including the NFL Network, RedZone channel and NFL+, has delayed a final deal.
Apple wants to win the package. Tim Cook, Apple's chief executive, has met with league officials and influential team owners like Jerry Jones, who owns the Dallas Cowboys. Apple didn't want to say anything.
Some of these people said that the companies that explored a bid for the rights in the past are still in the running. The N.F.L.'s chief media and business officer said in a statement that the league expects to finalize a deal in the coming months. A number of companies are in a strong position to potentially land Sunday Ticket.
The SportsBusiness Journal has previously reported on the negotiations.
Fans will be able to watch all the games on Sunday regardless of who wins the rights, but they will probably pay a premium to add the service to their Apple, Amazon, or YouTube service. They don't know if that premium will be more or less than the $294 that DirecTV charges.
Apple and Amazon want to be free of cable. MoffettNathanson, an investment firm that tracks the industry, says that traditional pay television has lost 25% of its subscribers in the last three years as people switch to streaming services.
The price of live sports rights is expected to go up. Data from MoffettNathanson shows that Disney, Paramount, and Fox are expected to spend a combined $24.2 billion for rights in 2024, double what they spent a decade earlier.
An opportunity has been created by the fragmenting of a distribution model. The companies would like to sell subscriptions to Apple TV and Amazon Prime. In addition to containing their own exclusive shows and sports, those services also double as portals for additional streaming offerings, which pay Apple and Amazon 15 percent or more of each subscription sold.
According to estimates by the investment bank, Amazon makes more than $3 billion a year from third-party sales. Sports are the most powerful draw in media because they attract more viewers. It is possible that the companies will lose money on Sunday Ticket in order to expose new customers to other parts of their business.
It will be a challenge for Apple and Amazon to convince skeptical sports leagues that they can produce high-quality broadcasts, stream games for millions of concurrent viewers, and maintain sports fans accustomed to flipping between games with a remote.
They are the first to leave the streaming industry. For a long time, many executives agreed with Reed Hastings, who said that his company was not interested in sports or news because they were only watched once.
Profitability remains out of reach for many streaming companies as they reconsider as competition for subscribers increases.
Their interest in sports was on display last Monday during M.L.B.'s Home Run Derby at Dodger Stadium in Los Angeles where executives from Apple, Amazon, Google and Facebook socialized with sports leaders.
Tech's dominance of live sports isn't a sure thing. Many of the most sought after rights are held by broadcasters for a long time. Traditional television still offers the biggest audiences, so the leagues prefer to sell tertiary packages to streamers.
Leagues look to court the broadest possible fan base in order to ensure the long-term viability of their sport.
The death knell of the cable bundle is overstated according to the founder and managing partner of Redbird Capital. It is the best place to find a wide range of sports.
According to Antenna, Apple TV+ has an estimated 16.3 million paid subscribers in the US. Amazon Prime started in 2006 as a faster shipping service and later added on-demand movies. Some customers pay a monthly fee for access to the Prime Video service.
Tech companies want to add sports to their services. Apple agreed to pay more than double Major League Soccer's annual rights payments with a 10-year, $2.5 billion deal for the global rights to 1,000 games. There will be two weekly Friday night M.L.B. games.
Amazon will pay $1 billion a year for N.F.L. games, a 50 percent increase from the previous deal with Fox. The rights to Formula One racing in the United States were renewed for $75 million, a 15-fold increase from the previous contract, after it lost out on more than 100 million dollars a year for the rights.
Apple and Amazon haven't won a marquee rights package in the US. 20 years ago, sports leagues worried that they would lose viewers by moving games to cable. The change began to become standard.
Traditional television companies are trying to prevent Apple and Amazon from taking over their business. In order to encourage people to pay for NBCUniversal, the company shut down NBC Sports Network last year. The National Hockey League and CBS have struck deals to show marquee soccer games.
The media companies were able to reach more than 100 million cable subscribers. The majority of sports programming is on traditional pay-TV channels where they can guarantee larger audiences.
The new competitive landscape will be tested by the National Basketball Association. The agreement with Turner runs through the 25th century. Most sports and media executives think that the league will stick with traditional broadcasters for most of its games, while carving out some small portion of rights for a tech company.
George Pyne is the founder of the sports private equity firm, Bruin Capital, and the former chief operating officer of NASCAR. They can still have a long-term relationship with their network partners, but they can also use new media.
The best opportunities for Apple and Amazon may be overseas where European soccer leagues resell their rights. In Britain and Italy, Amazon won the rights to the top European tournament. Prime Video subscribers can get the rights to France's Ligue 1 for $90 per year.
Daniel Cohen leads global media rights consulting for a sports agency. Television broadcasters could pool their resources to compete with tech giants who are willing to pay billions for rights.
The high-dollar N.F.L. deal is down to a Silicon Valley ego thing. I don't think there's a way to make money. I think there is a way to win.
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