Important points
A version of this article first appeared in the CNBC Sports Newsletter with Alex Sherman. This newsletter brings you the biggest news and exclusive interviews from the world of sports business and media. Sign up to receive future editions directly to your inbox. Apple’s head of television isn’t a fan of the modern sports viewing experience. “We’ve gone backwards,” Eddie Cue, Apple’s senior vice president of services, said Wednesday during a panel discussion at Motorsports Network’s Autosport Business Exchange New York. “It used to be that you could buy one subscription, a cable subscription, and get pretty much everything. Now there are so many different subscriptions that I think we need to fix that.” In a way, Apple is part of the problem. The company is about to announce a $140 million annual media rights deal with F1 for U.S. broadcast rights, said the people, who spoke on condition of anonymity before the announcement. These rights acquisitions will add to Apple’s growing sports portfolio, which also includes Major League Soccer and MLB’s Friday Night Baseball. Apple TV costs $12.99 per month. Consumers who want to watch a variety of sports now have access to sports, which is a positive development from 10 or 20 years ago, Cue said. But to watch sports, he joked, you’d have to sign up for “1,200 subscriptions.” Mr Kew said the solution was to “enable more bundling” and strengthen partnerships between media partners. “For example, if I’m in the league and I have two partners, it should be very easy for me to get in between them and do everything and do picture-in-picture, but I can’t do that. So I think there’s definitely a solution to some of these things. It’s more difficult, but that’s why we’re all here,” Cue said. F1 deal looming Apple’s interest in F1 follows the blockbuster movie it produced and starring Brad Pitt that was released in theaters this summer. Cue told the panel that the film is the highest-grossing sports movie in history. He said the company wanted to buy more sports rights and change the way it broadcasts, and was not deterred by the impending F1 rights deal. “We love F1,” Cue said. Recent F1 races have averaged about 1.4 million viewers on Disney-owned ESPN. “The truth is, it’s not huge yet. If you compare it from a sporting point of view, it’s quite small. So this sport has great potential,” Kew said. “And when you look at it, you realize it’s a global sport.” Rethinking the user experience Apple has an unusual sports strategy compared to other media companies. Cue said the company has historically deliberately avoided making sports rights bids unless it could buy the entire rights portfolio. When the deal is announced, Apple will become the exclusive rights holder to F1 in the United States, according to people familiar with the matter. This is the same as in MLS. Apple TV’s season pass gives users access to all MLS matches. Apple’s MLB package doesn’t fit this formula, but Cue called it a “test” of the company’s sports strategy. He said the commissioner’s insistence on selling games to multiple media companies does not change Apple’s vision of owning the entire sports league experience for its customers. That’s why Apple has distanced itself from the National Football League and the National Basketball Association, even though Cue is a huge Golden State Warriors fan. “We’re not going to compromise,” Cue said. “We don’t have to do sports the way they are. There are plenty of people who do, so the world doesn’t need us to do it that way.” Cue said it was imperative the league and television partners worked together to modernize the sports viewing experience for children, who have more entertainment options at their disposal than ever before. “I think some of these issues need to be fixed if we want people to watch the games and if we want all sports to grow,” he said. For those skeptical of Apple’s long-term commitment to sports, Cue said the company’s long-term horizon is probably longer than its competitors. Major U.S. sports rights are tied up for years to come, but Apple plans to wait out the league until it thinks splitting the rights among many bidders isn’t the best approach. “We’re in it for the long term,” Cue said. “We expect this situation to continue for some time. The world has a habit of changing relatively quickly and at unexpected times.”
