Key Points
- Apple is set to announce a $140 million-a-year media rights deal with F1 for its U.S. rights, according to sources familiar with the matter.
- Apple’s Eddy Cue said his company would like to buy more sports rights and would look to change the way broadcasts are made.
- “We’re not going to compromise,” Cue said. “We don’t have to play sports like they do. There are a lot of people who do it. So the world doesn’t need us to do that.”
A version of this article first appeared in the CNBC Sport newsletter with Alex Sherman, bringing you the biggest news and exclusive interviews from the world of sports and media. Sign up to receive future editions, straight to your inbox. Apple’s TV chief isn’t a fan of the modern sports experience. “We’ve gone backwards,” Eddy Cue, Apple’s senior vice president of services, said during a panel Wednesday at Motorsport Network’s Autosport Business Exchange in New York. “Before, you bought one subscription, your cable subscription, and you pretty much got everything they had. Now there are so many different subscriptions, so I think that needs to be fixed.” In a way, Apple is part of the problem. The company is set to announce a $140 million-a-year media rights deal with F1 for its U.S. rights, according to people familiar with the matter, who spoke on condition of anonymity about the deal before its announcement. With the acquisition of these 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 can 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 lies in “more bundling,” Cue said, and more partnerships between media partners. “If I’m a league and I have two partners, for example, it should be very easy for me to switch between them and do all sorts of things between them and do picture-in-picture, but I can’t. And so I think there are definitely solutions to some of them. It’s harder, but that’s why we’re all here,” Cue said. F1 deal near Apple’s interest in F1 follows a hit film, produced by Apple and starring Brad Pitt, which hit theaters this summer. Cue told the panel that the film was 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 look to change the way broadcasts are done – and he has not shied away from an imminent F1 rights deal. “We love F1,” Cue said. F1 races recently averaged about 1.4 million viewers on Disney-owned ESPN. “The truth is that it’s not huge yet. When you compare it from a sporting point of view, it’s pretty minimal. So there’s huge potential for this sport,” Cue said. “And when you look at it, it’s a global sport.” Rethinking the User Experience Apple has an unusual sports strategy compared to other media companies. The company has so far intentionally avoided bidding on sports rights unless it can buy the entire rights portfolio, Cue said. Apple will be the exclusive US rights holder for F1 when the deal is announced, according to close sources. It’s the same as with MLS: the Apple TV Season Pass allows users to access all MLS matches. Although Apple’s MLB package doesn’t fit that formula, Cue called the MLB package a “test” for the company’s sports strategy. He said Apple wouldn’t change its vision of owning the entire sports league experience for one customer just because commissioners insist on selling their games to multiple media companies. This is why Apple has stayed away from the National Football League and the National Basketball Association – despite the fact that Cue is a huge Golden State Warriors fan. “We’re not going to compromise,” Cue said. “We don’t have to play sports like they do. There are a lot of people who do it. So the world doesn’t need us to do that.” Cue said it’s imperative that leagues and television partners work together to modernize the sports viewing experience for kids, who have many more entertainment options than ever before. “If we want people to watch the games and 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-term time horizon, perhaps longer than any of its competitors. With major U.S. sports rights locked in for years to come, Apple plans to wait until leagues realize that handing them over to many bidders isn’t the best path forward. “We’re in this for the long haul,” Cue said. “We expect to be here for a while. The world has this habit of changing relatively quickly at times when you least expect it.”