Key Points
A version of this article first appeared in the CNBC Sport newsletter with Alex Sherman, which brings you the biggest news and exclusive interviews from the worlds of sports business and media. Sign up to receive future editions, straight to your inbox. Apple’s head of TV is not a fan of the modern sports viewing experience. “We’ve gone backwards,” Apple Senior Vice President of Services Eddy Cue said during a panel Wednesday at Motorsport Network’s Autosport Business Exchange NYC. “You used to buy one subscription, your cable subscription, and you got pretty much everything they had. Now, there’s so many different subscriptions, so I think that needs to be fixed.” In some ways, Apple is part of the problem. The company is about to announce a $140 million per year media rights deal with F1 for its U.S. rights, according to people familiar with the matter, who spoke on the condition of anonymity about the deal before it’s announced. With the acquisition of those rights, Apple will add to its 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 wide variety of sports are able to access them — a positive development from 10 or 20 years ago, Cue noted — but they have to sign up for “1,200 subscriptions” to get them, he joked. The solution is “more bundling,” said Cue, and more partnership between media partners. “If I’m a league, and I have two partners, for example, it should be very easy for me to go between them and do all kinds of things between them and do picture-in-picture, but I can’t. And so I think that there are definitely solutions to some of these. It’s harder, but that’s why we’re all here,” said Cue. Nearing F1 deal Apple’s interest in F1 follows a blockbuster movie, produced by Apple and starring Brad Pitt, that hit theaters this summer. Cue told the panel the movie is the highest-grossing sports film of all time at the box office. He said his company would like to buy more sports rights and would seek to change how broadcasts are done — and he didn’t shy away from the imminent F1 rights deal. “We do love F1,” said Cue. F1 races have recently averaged about 1.4 million viewers on Disney-owned ESPN . “The truth is, it’s not huge yet. When you compare it from a sports point of view, that’s pretty tiny. So there’s a huge potential for the sport,” Cue said. “And when you look at it, it’s a sport that’s global.” Rethinking the user experience Apple has an unusual sports strategy relative to other media companies. The company has thus far intentionally shied away from bidding on sports rights unless it can buy the entire rights portfolio, Cue said. Apple will be the exclusive U.S. rights holder for F1 when the deal is announced, according to the people familiar. That’s the same as with MLS – Apple TV’s Season Pass gives users access to every MLS game. While Apple’s MLB package doesn’t fit this formula, Cue called the MLB package “a test” for the company’s sports strategy. He said Apple won’t alter its vision to own the entire sports league experience for a customer just because commissioners insist on selling their games to multiple media companies. That’s why Apple has stayed away from the National Football League and National Basketball Association – despite the fact that Cue is an enormous Golden State Warriors fan. “We’re not going to compromise,” said Cue. “We don’t have to do sports the way that they are. There’s plenty of people doing that. So the world doesn’t need us to do that.” Cue said it’s imperative for leagues and TV partners to work together to modernize the sports viewing experience for kids, who have many more entertainment options at their disposal than ever before. “If we want people to watch games, and we want all sports to grow, I think some of these things need to be fixed,” he said. For anyone skeptical of Apple’s long-term commitment to sports, Cue said the company has a long time horizon — perhaps longer than any of its competitors. While major U.S. sports rights are tied up for years to come, Apple plans on waiting leagues out until they come around to the idea that carving them up to many bidders isn’t the best way forward. “We are in it for the long run,” said Cue. “We expect to be around for a while. The world has this habit of changing relatively fast at times when you least expect it.”
