Why Apple Paid 3.475 Trillion Won for Soccer Broadcast Rights?[Win-Win Game④]

OTT sports broadcasting is a global trend. Last year, Apple TV spent $2.5 billion (approximately 3.475 trillion KRW) to acquire 10 years of broadcasting rights for Major League Soccer (MLS) in the United States. Previously, games were broadcast on Disney-owned ABC, ESPN, and Fox channels. With Lionel Messi transferring to Inter Miami CF and attracting worldwide attention, the fate of the broadcasting rights became uncertain. Fifteen companies, including Apple TV, Amazon Prime Video, Warner Bros. Discovery, and Paramount, participated in the bidding. Amid fierce competition, the broadcasting rights fees soared to unprecedented levels.

[Image source=AP Yonhap News]

It’s not just professional soccer. Amazon Prime Video secured exclusive rights to broadcast NFL games every Thursday night through intense competition. In return, it pays $1 billion (approximately 1.3915 trillion KRW) annually to the National Football League (NFL). Netflix also acquired the broadcasting rights for the American professional wrestling league WWE in January for $5 billion (approximately 6.95 trillion KRW). It will exclusively air the longest-running popular weekly program, "Monday Night Raw," for 10 years in the United States, the United Kingdom, Canada, and Latin America. Netflix also secured the right of first refusal to either terminate or extend the contract after five years.

This investment was made in response to the threat posed by competing companies’ professional sports streaming broadcasts. In particular, an NFL game between the Kansas City Chiefs and the Miami Dolphins, broadcast by NBCUniversal’s Peacock just ten days before the contract, had a significant impact. It attracted a record-breaking 23 million subscribers for a streaming live event. Viewers paid $6.50 (approximately 8,700 KRW), including tax, just to watch a single game.

This trend is also being observed in neighboring Japan. The professional soccer J.League has been broadcast via OTT since 2017. DAZN, a British media group Perfume’s subsidiary, purchased the broadcasting rights for 210 billion yen (approximately 1.8297 trillion KRW) for 10 years. In 2020, the contract was extended by two years, increasing the total contract value to 223.9 billion yen (approximately 1.9508 trillion KRW) over 12 years.

[Image source=AP Yonhap News]

OTT platforms are eager to broadcast professional sports not simply to secure a fixed fandom. Until now, they have focused on targeting the public’s non-routine time intensively. When subscribers found content they wanted to watch, they were encouraged to binge-watch on specific days. This often led to conflicts with cinemas and other platforms employing similar strategies. OTTs often gained an advantage in competition due to their minimal time and space constraints and relatively low prices. However, they continued to face difficulties in generating steady revenue. When attractive content ran out, subscription cancellations frequently occurred.

Securing professional sports broadcasting rights is like the first step to overcoming these inherent limitations. The nature of sports aligns with the public’s routine time. Games are held at least once a week, allowing viewers to stay engaged for longer periods. In fact, this has traditionally been an area led by TV broadcasters and portal sites, which attracted viewers regularly through real-time news coverage and live sports broadcasts. The excessive spending by overseas OTTs reflects their desire to adopt this system wholesale. Tving, which holds exclusive online broadcasting rights for Korean professional baseball (KBO), is no different. The groundbreaking contract worth 135 billion KRW over three years is just the beginning.