Does a Premier League bid make sense for Apple?

Updated. Apple (s aapl) might be looking to expand its live sports offerings through a deal with the English Premier League, according to a Daily Mail report this week. It is an interesting proposition but not a cheap one: Sky paid £1.6 billion (around $2.5 billion) for its current broadcast rights. But even at that price or higher, a deal might be well worth the initial investment.

The iTV cometh

There is one very good reason that Apple might want to secure broadcast rights for live Barclays Premier League matches: its rumored upcoming dedicated smart-TV set. If Apple wants to convince customers to buy into its platform, it must provide the crucial advantages that keep people tied to traditional television content sources like cable and satellite television. Live sports is one such advantage.
Apple could easily go the route of simply allowing users to access their existing content packages from cable providers and avoid its own rights negotiations, but that won’t provide any kind of game-changing TV experience that could potentially shake up the industry. Apple’s offering discrete digital delivery channels, like it does for some U.S. sports on the current Apple TV, provides live viewing along with other perks like the ability to re-watch past games and highlights on demand that provide a more tailored experience to sports fans.

Premier League has worldwide appeal

Despite Premier League’s English roots, it appeals to football fans worldwide. In 2011, 4.7 billion people tuned in to Premier League games, in more than 212 markets worldwide. It is the most watched football league in the world, and it is growing. In the U.S., viewership for Premier League games rose from a paltry 19,000 for one match in 2008 to 1.6 million for a recent 2011 game.
A Premier League partnership would add considerably to the value perception of Apple TV, both in the UK, elsewhere abroad and, increasingly, in the U.S., too.

Cash to burn

Apple also has the money to make a bid on broadcast rights for Premier League games. Morgan Stanley’s Katy Huberty recently suggested that Apple’s cash reserves could grow to $136 billion by the end of 2012, and they were at an impressive $81.6 billion as of last quarter. Paying $2 to $3 billion seems steep, but in exchange for a better chance of locking in the sizeable audience mentioned above, it could actually be a deal.
Whether or not this pans out remains to be seen. Apple is probably involved in lots of content negotiations regarding its TV plans, especially if it is planning on introducing a dedicated set. We will have to see if Premier League is one of the things that comes out of those negotiations.
Ed.: A previous version of this article spelled the name of the company incorrectly. It has been corrected to say Premier.
Photo courtesy of Flickr user rc!