Season Pass Pivot Reflects Reality, Premature for Top Tier Rights Owners to be Primarily OTT

Season Pass Pivot Reflects Reality, Premature for Top Tier Rights Owners to be Primarily OTT

Major League Soccer is bringing back MLS Season Pass on Apple TV for its 30^th anniversary season–just not on an exclusive basis as the streaming package has been offered/sold the last two years. The league recently announced Season Pass will be available for purchase (and viewing) through both Comcast’s Xfinity TV service and DirecTV this season.

T-Mobile subscribers will also receive complimentary access to MLS’ all-inclusive offering, as they did in ’23.

The change in Season Pass distribution strategy reflects the reality –and challenges– of the moment.

Rights owners know they must begin migrating to the ‘new’ digital world. The tech platforms are increasingly necessary for them to fully maximize their media rights’ value.

But it’s still not yet time to abandon the established linear TV system, and the digital platforms are highly fractionalized and often segmented. Rights owners moving 100% of event inventory to them will experience some loss of reach.

How much and how relevant those viewers are can vary wildly across properties.

MLS elected to consolidate its local and national broadcast rights exclusively behind Apple TV’s paywall back in ’22 because the device manufacturer was willing to pony up meaningfully more than ESPN and Fox had offered for its national package. 

The league was hopeful that Apple would be able to keep game viewership flat. But with few people watching games on local television to begin with, and the RSNs not paying for those rights, there was seemingly little downside in MLS taking the 10-year $2.5bn deal. 

But the league has not sold as many Season Pass subscriptions on Apple TV as anticipated, and now there are concerns that the organic reach received via the platform will not be enough for it to effectively capitalize on any momentum generated from the 2026 World Cup. 

FIFA’s inability to keep club teams playing in their respective territories presents a longer-term threat to MLS. It's not unreasonable to think an EPL club could set-up shop in NYC, or that a Liga MX franchise could call San Antonio home, within a decade. 

So, the urgency to broaden league exposure and appeal to more fans has emerged. And MLS is now wisely making a push to enhance discoverability.

One must assume the league’s most ardent supporters are already subscribing to Season Pass. It seems unlikely that making the product available for purchase across platforms with larger circulation is going to dramatically move the viewership needle.

However, because the Apple TV platform is underused, there probably are some subs to be mined marketing Season Pass outside of Apple’s universe. Uncovering them will benefit both the league (think: reach) and tech company (think: more ppl in Apple TV ecosystem, incremental subscription revenue less affiliate fees).

MLS also announced the creation of Saturday Night Soccer, a new weekly game window that will reside in front of the Season Pass paywall, as part of its latest effort to spur league interest. The marquee matchups will be available to all 25mm plus Apple TV subscribers.

That effort seems equally unlikely to impact the MLS’ trajectory. While streaming may now command ~35% of all viewership minutes consumed, digital eyeballs are siloed and spread out across more than a dozen services; and Apple TV is near the bottom of the chart in terms of minutes consumed making meaningful organic discovery unlikely.

But both endeavors are still worth pursuing. Placing Season Pass on platforms other than Apple TV expands its potential market, and Saturday Night Soccer serves as direct marketing for the season package. 

Of course, reach and discovery aren’t exclusively to blame for MLS’ struggles drawing TV viewers. As noted, part of the reason the league went to Apple TV in the first place was that its games were drawing relatively few fans on local television.

MLS was the first domestic league to make a streamer its primary rights holder. It’s logical to wonder how long it will be before another follows suit. 

Bulls arguing that milestone is on the near-term horizon will point to the 13.2mm viewers Thursday Night Football drew on Amazon Prime in ‘24.

But that figure includes the markets that played in those games, which are broadcast over the air (think: 10-15% of the number). TNF is also a single high-profile weekly game window, and pro football is the most desirable content in the U.S. And even with all that, the property’s ratings have declined by more than 20% from its days inside the declining pay TV bundle.

The other big four leagues and the UFC could all probably make a move primarily to streaming and, like TNF, still retain at least half their audience. It becomes far less certain as one begins to move further down the value chain (see: MLS, Pac-12).

Of course, the platform the league chooses (think: circulation), and the treatment it receives there (think: discovery), would have outsized impacts on their outcome. 

While Netflix (see: rumors re: F1) and Amazon Prime Video would presumably have interest, as it stands, Apple TV is the only streamer that has shown a willingness to take on all of a rights owners’ inventory.

That could certainly change in the future. The challenge remains that the marketplace hasn’t evolved fast enough towards streaming profitability for a service to cover the cost of an exclusive top-tier rights package. 

Remember, Apple is paying just $250mm/year for MLS’ rights.

It remains to be seen how profitable the new distribution media system will be once consolidation and re-bundling are complete. Logic suggests the players left standing will be larger, more efficient, and able to recapture some lost pricing power.

But until there’s enough money in the new system and content costs, which are still linked to the old system, adjust (and they are), it seems unlikely that any tech company will bid to become the primary holder of a tier one league’s rights.

Expect most top tier rights owners to return to the pay TV bundle, in some capacity, during their next round of rights negotiations.

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