Apple Inc (NASDAQ:AAPL) is becoming more aggressive around trying to get live sports content onto its Apple TV streaming platform, according to Wedbush Securities analysts, who called it a “golden goose strategy” to increase subscribers.
In a note to clients, they estimate Apple TV+ has more than 50 million paid subscribers, which received a major boost from a 10-year MLS streaming soccer agreement when Lionel Messi signed with Inter Miami, which the analysts called a “game-changing move”.
Going forward, though, the Wedbush Securities analysts believe a strategic partnership or outright acquisition of Disney’s ESPN sports asset would be a “no brainer” for Apple.
"We believe the answer and the shoe that fits for Apple is the golden ESPN assets which potentially may be on the table in one form or another as Iger and the Board strategically and carefully look at Disney's core assets over the coming months," the analysts wrote.
They added that acquiring ESPN would likely cost more than $50 billion but would make a lot of strategic sense for Apple as the company would gain valuable sports content, major TV rights across each of the major professional and college sports packages, and change the cross-sell opportunities and attractiveness of Apple TV while "putting the company on the sports map globally speaking."
And, although Apple’s biggest acquisition to date has been its $3 billion plus deal for Beats in 2014, analysts at Wedbush believe Apple recognizes that in this streaming arms race there is a "closing window" to acquire content and cement its footing in the live sports content arena.
They maintained their ‘Outperform’ rating and 12-month target price of $230 per share on Apple stock.
Shares of Apple edged $0.28 lower to $173.72 in late-morning trading on Friday but have gained 39% year to date.
Contact Sean at sean@proactiveinvestors.com