Bloomberg Opinion — Lionel Messi, his holiness, has arrived to play soccer in Miami. The only thing bigger than the crowds to greet him are the dollar signs bulging, like Looney Toons, from the eyes of the business magnates who made it happen. Awooga! It’s payday!
His signing to Inter Miami, completed earlier this month, was unlike any other in the history of the sport, in that success will be measured not by the number of trophies he can win but by how many streaming subscription signups he can inspire.
Last year, Apple (AAPL) agreed a $2.5 billion deal to acquire the global rights to broadcast the US’s Major League Soccer exclusively for 10 years, via a dedicated app that costs $14.99 per month or $49 for the season. Or, existing subscribers to Apple’s TV+ service can get a discount, which is what this is all about: Apple, along with rivals like Amazon (AMZN), sees live sports as the gateway to long-term subscriber loyalty, reducing the rate at which viewers chop-and-change their streaming platform choices.
According to Antenna, a measurement company for the subscription business, the number of consumers considered “serial churners” — those who cancel three or more subscriptions in a two-year span — has increased from 3% of all streaming customers in 2019 to 16% in 2022. In an effort to reverse this, streaming companies will spend $6 billion on major sports rights in 2023, according to Deloitte, an amount that can be expected to rise considerably as more lucrative legacy sports deals come up for renewal.
Until then, deep-pocketed tech giants are taking whatever rights are available. Apple’s MLS deal is in addition to its existing rights to show some Major League Baseball. Amazon is furnishing its Prime Video platform by spending $1.2 billion per season to show NFL’s Thursday Night Football to viewers in the US. Elsewhere, it has acquired rights to show English Premier League and French Ligue 1 in their local markets. Google in December entered a $14 billion deal for NFL’s “Sunday Ticket,” which this year will be streamable via YouTube.
Legacy broadcasters with existing rights are using them to push streaming platforms of their own, such as soccer’s UEFA Champions League on Paramount+. The tension between the traditional rights holders and the spending might of Silicon Valley is expected to come to a head when rights for an American jewel in the crown, the NBA, go up for bidding in 2025. Everyone is interested.
At $250 million per season, the MLS is a minor deal for Apple. But what it lacks in prestige it gains in opportunity to experiment. To keep Messi, the finest player of his generation, from the far greater riches on offer to play in Saudi Arabia, Apple reached an unprecedented deal that will see the World Cup winner earn an undisclosed cut from the growth in international subscriptions. Jorge Mas, Inter Miami’s billionaire owner, feels that boost could amount to around 2 million users.
That might seem like a small figure, but Antenna’s data suggest users who join because of sports are of greater long-term value: 17% of customers who subscribed to Apple TV+ in order to watch Friday Night Baseball were serial churners, compared with 39% of people who signed up to watch Stranger Things on Netflix. And Apple TV+ could use the additional subscribers — the service is expected to lose more than $5 billion in 2023 alone.
The flaw in that plan is that Messi alone won’t make MLS worth watching. For sure, viewing figures for his first game Friday will likely be record-breaking. Footage of his introduction at the stadium on Sunday attracted 3.5 billion views — and he wasn’t even playing. But the motivation for fans to keep watching may be in short supply. The 36-year-old Messi will be seeing out his playing days at the worst-performing team in the 29-strong MLS roster. Since its inaugural 1996 season, the US league has gained a reputation as a dreary alternative to the game in Europe; a retirement home for stars seeking slower play and a glitzier lifestyle.
Messi follows in the footsteps of England’s David Beckham in 2007 and Brazilian legend Pele in 1975. In both cases, promoters had no trouble making Americans excited about their arrival. But keeping fans engaged was tough.
The odds are better with Messi, who is still good enough to play on bigger stages, and is undoubtedly the MLS’s biggest draw yet. Ticket prices for his first game can be measured on the Swiftie scale, going for an average of $2,600 apiece. (You could have witnessed Messi lift the World Cup in Qatar last year for around $600.)
Apple’s free rein over MLS gives the first sign of what a leading-edge technology company might achieve. At the company’s disposal, 2 billion devices in active use around the world, through which Apple can funnel in new fans by harnessing existing subscribers on Apple TV+, or users of Apple News and Podcasts. It can offer a highly individualized viewing experience, incorporating statistics and other interactions, such as replays and alternative camera angles. Others have experimented clumsily with these elements. Apple will do it better.
And, since most sports fans like to tap away on a second screen while watching sports, Apple can bring its expertise to smartly integrate social media and other community-watching elements. Commercially, the possibilities to integrate Apple’s payments capabilities with merchandise or ticket sales are obvious (though it seems to have made betting a line it doesn’t want to cross).
Looking further ahead, Apple’s recent presentation for its Vision Pro virtual-reality headset highlighted the potential for consuming live sports. During a demo — only conceptual, at this stage — the viewer, wearing a headset, was able to watch an NFL game on their TV while looking down at 3D re-creations of key plays.
A sports purist might balk at such bells and whistles. More importantly, fans of every kind grow frustrated when keeping up with sports, previously possible through one handy remote control, means paying multiple monthly fees to gain access to a range of streaming apps. Messi’s arrival in the MLS is an experiment not just for American soccer but the future business model of sports broadcasting. Not for the first time, a lot rests on the little Argentine’s shoulders: “Subscriber growth” is about to become as important a metric to him as goals and assists.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Dave Lee is Bloomberg Opinion’s US technology columnist. Previously, he was a San Francisco-based correspondent at the Financial Times and BBC News.
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