Talks between the National Football League and Apple over a package of Sunday football games have dragged on as the league and the tech giant have bickered over pricing, but another deal has been added to the mix: sponsorship of the show. Super Bowl halftime.
The NFL has been seeking up to $2.5 billion for the rights to NFL Sunday Ticket, about $1 billion more than it collects from its current provider, DirecTV. As the sides scramble over such a high rights fee, Apple has agreed to be the title sponsor of the Super Bowl halftime show, the league and the company said Thursday night. They did not disclose the terms of the agreement.
Apple Music will replace Pepsi as sponsor in a deal the NFL has been seeking for about $50 million, three people familiar with the negotiations said.
Becoming the title sponsor of the Super Bowl halftime show is a starting point for Apple. The company prides itself on marketing its brand differently from consumer goods companies such as Coca-Cola, Budweiser and McDonald’s, which have a long history of sponsoring sporting and cultural events.
Apple rarely sponsors events it doesn’t control. It hasn’t lent its brand to a high-profile event since 2016, when it sponsored the Met Gala in a bid to increase the fashion world’s acceptance of its Apple Watch.
The Race to Rule Streaming TV
The deadlock on the much larger deal between Apple and the NFL is hampering the league’s efforts to become a leader in live sports streaming. With consumers abandoning traditional TV packages, Roger Goodell, the NFL commissioner, has made it a priority to expand the league’s reach beyond traditional broadcasters to digital outlets like Netflix and HBO Max, where younger viewers are drawing attention.
Last year, the league cut a series of traditional broadcast deals with CBS, ESPN, Fox and NBC for its highest-profile games, but reserved two packages for technology companies it considered the sports programmers of tomorrow. It struck an 11-year, $13 billion deal with Amazon to stream Thursday night games, announcing that it would sell its Sunday Ticket to a streaming service.
Although the NFL has discussed Sunday Ticket with Google, Amazon and ESPN, its most extensive negotiations have been with Apple. Executives from both the league and the tech giant have told trade partners they hope to reach an agreement, according to people familiar with the negotiations. But the talks have been complicated by the NFL’s decision to sell several assets simultaneously, including Sunday Ticket, the halftime show, and NFL Media properties like the NFL Network and the RedZone channel.
One of the biggest problems has been the NFL’s asking price of $2.5 billion. The $1 billion raise from the current deal would be hard to come by from a traditional media company, but it’s been especially hard to capture from Apple, which has deep pockets and an interest in getting into esports but also an unwavering commitment to profitability that leads it to squeeze suppliers.
The NFL has signaled its frustration with Apple by reaching out to representatives of other media companies to encourage them to bid, according to two people familiar with the scope. But some of those companies have been wary of becoming a tool the NFL can use to induce a bigger offer from Apple.
“While the foundations and cornerstones of the deal are in place, the devil is always in the details, particularly in a deal that has complex elements that extend beyond Sunday Ticket’s historic rights,” said William Mao, media rights consultant at Octagon. a sports and entertainment agency.
Apple has turned to Sunday Ticket as part of a broader strategy to increase subscriptions to its streaming service, Apple TV+, by capitalizing on the popularity of live sports. Despite pouring billions of dollars a year into critically acclaimed series like “The Morning Show” and “Ted Lasso,” Apple’s three-year-old service has only about 16 million subscribers in the United States, fewer than half of Disney+ subscribers have accumulated. since its release around the same time, according to Antenna, a media research firm.
Apple leaders have told Hollywood executives that acquiring Sunday Ticket would boost audiences for their shows. The NFL remains one of television’s biggest draws, with its games accounting for three-quarters of the top 100 most-watched shows last year. according to Sports Business Journal.
In recent months, Apple CEO Tim Cook and Apple services chief Eddy Cue have met with New England Patriots owner Robert Kraft and Dallas Cowboys owner Jerry Jones, who They lead the league. negotiations, people familiar with the negotiations said.
The idea of Apple sponsoring the Super Bowl halftime show came up over the course of the talks as a way to deepen business ties. The NFL needed a replacement for Pepsi and recognized that Apple had used its marketing budget to get the rights to live sports. The company offered Major League Baseball $55 million in rights fees for two weekly Friday baseball games and an additional $30 million in advertising, according to two people familiar with the deal. Forbes previously reported the terms of the deal.
Arguments between the NFL and Apple over Super Bowl halftime threatened to delay the league’s launch of this season’s artists, some of these people said. The NFL and Jay-Z’s entertainment company Roc Nation, which produces the show, announced the performers last year in September, giving the league ample time to build anticipation. Organizers are eager to build on last year’s event, the first hip-hop performance of the Super Bowl, a celebration of rap that made history by winning three emmy awards.
Jay-Z and Roc Nation are expected to continue to take the lead in selecting performers and performers for the event, but Apple will have a say in the direction of the show, according to a person familiar with the deal.
A Roc Nation spokeswoman did not respond to requests for comment.
The tech company and the hip-hop pioneer are unlikely bedfellows. In 2015, Jay-Z bought a streaming music service, Tidal, and made his song catalog exclusive to the service, depriving Apple Music of albums like “The Blueprint.” Two years later, he pitched much of his catalog to Apple and ultimately exited the streaming music business, selling Tidal to Square for nearly $300 million in 2021.
Ken Belson other kevin draper contributed report.