Apple Eyeing ESPN for Sports Supremacy
Tim Cook, Apple’s chief, faces a pivotal decision regarding the world of live sports. Does Apple take a steady, incremental approach or leap forward boldly? The general sentiment is that Apple has the means and power to reshape the media rights landscape, perhaps dramatically.
Recently, a statement by Wedbush Securities analyst Dan Ives reignited discussions around this topic. He proposed the tantalising idea of Apple buying ESPN from The Walt Disney Co. for a jaw-dropping $50 billion. If we recall, Apple’s foray into live sports with a ten-year $2.5 billion deal with Major League Soccer has already shown promising signs. Apple TV+’s recent broadcasts of Lionel Messi’s breathtaking goals from this league surely affirm this move.
Dan Ives believes that Apple and ESPN merging is a “when, not if” scenario. The potential acquisition would grant Apple access to an enviable list of rights – from NFL to NBA, MLB, UFC, and even prestigious events like the tennis Grand Slams and Formula 1.Considering Apple’s colossal market cap of $2.7 trillion, acquiring ESPN could position Apple to become a top bidder for any major sports properties, like NBA and College Football Playoff rights.
However, before we get too carried away, there are hurdles. Apple, despite its vast reserves, is traditionally very selective about its acquisitions. Their biggest splurge to date remains the $3 billion purchase of Beats in 2014. Jumping to $50 billion for ESPN is no small step, even for Apple. Furthermore, ESPN isn’t just any acquisition target. It has been Disney’s financial backbone for years, helping fund the acquisitions of giants like Marvel, Pixar, and Lucasfilm. Given this, would Disney’s Bob Iger even consider letting go of such a lucrative entity?
There’s another twist: What does Apple truly aim to achieve from live sports? According to Patrick Crakes, a former Fox Sports executive, Apple might not want to recreate ESPN. Instead, their media endeavours would serve their core business of device manufacturing. Apple’s approach is one of caution, ensuring media endeavours fit into their broader corporate narrative.
Yet, the media landscape is evolving. As investment strategies shift, there’s an increased interest in merging streaming giants with legacy sports networks. Streamers have realised that genuine live sporting events hold more potential than related unscripted content, as evidenced by Netflix’s varying success rates in the genre.
Disney, despite its dominant position, feels the pressure from changing TV habits and an uncertain economy. Cord-cutting has significantly reduced ESPN’s viewership. Open to potential partnerships, Iger has also considered selling stakes in ESPN.
Enter Apple. Much like when Rupert Murdoch’s Fox changed the sports TV game in 1993 with an unexpected NFL rights acquisition, Apple could be poised for a similar upheaval. Instead of patiently waiting for rights to bid on, streamers like Apple could consider acquiring legacy media firms, inheriting their rights. As one veteran sports TV executive wisely stated, “You have to kick the door down.”
While the Apple and ESPN merger is still speculative, the current noise around the potential merger showcases the shifting dynamics in the live sports broadcasting realm. If Apple truly wishes to be a force in live sports, aggressive moves like acquiring ESPN could be the ticket. Whether or not this becomes a reality, one thing’s for sure: the game is just getting started.