Welcome back to What I’m Hearing+, live from Brooklyn after a refreshing weekend in Saratoga, where my strategy of betting a couple bucks on the horse with the funniest name in all 11 races won me $30. I have to imagine Charles Bukowski would be proud.

This week, a look at whether Major League Soccer (and Lionel Messi) is working for Apple TV+, and why it’s so much more than a pure play for subscribers. Let’s dive in…

But Apple is approaching a potential inflection point with its video business. Demand for its originals has increased each quarter, per Parrot Analytics, and Apple TV+ now ranks third behind Netflix and Prime Video in the U.S. Its series also score higher average IMDB user ratings overall (7.2) than those on HBO Max (6.9) or Prime Video (5.9), according to a JustWatch study. With an essentially limitless budget—Apple is worth nearly $3 trillion on a good day—content chiefs Jamie Erlicht and Zack Van Amburg can afford to take big swings.

Right now, the conventional wisdom is that the MLS partnership is primarily a pure streaming play—the games bring in new viewers, whom Apple can sign up and then attempt to retain. But Apple is also experimenting in a unique and innovative way. For instance, the company has turned Lionel Messi, whose massive deal with Inter Miami includes a share of MLS Season Pass subscriber revenue, into an ambassador for both for the league and for the streamer.

That relationship has afforded Apple all kinds of benefits. Not only does the service now boast a major star for its new sports offering—Inter Miami recently won the League Cup—but it also maintains downstream content opportunities. Apple can spin up new sports docs (including a recently announced a Messi docu-series for Apple TV+) à la Netflix’s Drive to Survive or Break Point, or whatever else it might want to do with the world’s most famous athlete. V.R., anyone?

Of course, like many streaming businesses, Apple is focused on several success metrics, including the percentage of new subscribers who ultimately cancel. After all, Apple TV+’s estimated 6.5 percent annual churn was somewhat higher than the weighted industry average, in June, of 6.1 percent—placing Apple behind Netflix, Hulu, and HBO Max in terms of retention, according to research firm Antenna. Yes, Apple’s churn rate increased by the smallest percentage last quarter of the major U.S. streamers, but Services S.V.P. Eddy Cue would certainly like to get that base number down, especially when competition is tougher and prices are rising across the board. In this environment, live sports are crucial to growing, retaining, and monetizing audiences.

On the growth side, Apple might actually benefit from the fact that its MLS deal isn’t exclusive. Apple has all the games, but a handful will also air on Fox (every match is also in Spanish on Fox Deportes). Ideally, this will allow Apple to tap into a substantially larger market, with Fox essentially a marketing funnel for its MLS Season Pass; the same goes for simulcasting a game on Pluto TV’s premium soccer channel. Apple TV+ may have about 15 million domestic customers, according to recent analyst consensus, but that’s a fraction of the hundreds of millions of potential eyeballs that can be delivered across linear and FAST channels.

Soccer has been considered the sport of the future for decades, but Cue and Cook may have truly timed the market. Domestic soccer fans have increased by more than 52 percent between 2012 and 2019, according to a report from Telemundo. MLS tripled its market presence over 25 years, the report added. Perhaps most importantly, the MLS fanbase is also one of the youngest in sports, according to industry reports—about in line with the NBA.

Sure, sports docs can be hit or miss, but the success of Netflix’s Drive to Survive and Quarterbacks, which has remained on the Top 10 global English-speaking TV list for four weeks, suggests there’s sustained interest in players and the behind-the-scenes intrigues of the leagues.

And Apple arguably has just the right (younger, active, and excited) audience with soccer as it becomes more widely available through streaming, where rights are far less pricey than other leagues—perhaps allowing the company to test-and-learn, as it is with its Friday MLB package, before potentially entering more expensive bidding wars for larger leagues. In the meantime, it has a bevy of levers at its disposal: its young audience can be pushed to check out a podcast on Inter Miami (bringing ads to Apple’s podcasts business), experimenting with VR (ads to Apple’s new virtual reality business), and playing Messi-themed games (same to Apple’s Games business). Speaking of which…

The timeline for all these moves is still in flux: Bloomberg reported last year that Apple would build an ad network for live TV as part of its MLS deal in 2023. But, clearly, a full-scale ad product (including an ad-supported Apple TV+ tier) is only a matter of time. Live sports, a category where viewers already expect ad breaks and other, more custom brand integrations, is an obvious place to start. Apple’s ability to commodify the outsized attention on sports when it’s not doing so on its originals is crucial.

Apple needs to proceed sensitively here, given how it has built its brand around protecting customer data privacy. But there are few things more brand-safe than advertising around sports—and nothing that scales better or provides more value, especially when they’re streaming live. If Apple’s MLB broadcasts (with some ups and downs in terms of quality) have demonstrated anything, the company is willing to experiment in order to attract blue chip partners down the line. Remember that during Apple’s most recent keynote, the company showed off a theoretical use of NBA games on ESPN in its new VisionPro headset. VR is still new, but much like advertisers flocked to the internet with Google and social media with Facebook, VR is just another frontier for digital billboards. Incorporating Siri into a broadcast for gimmicky tie-ins, like trivia, probably isn’t the best idea, but it’s another sign that the world’s largest company is surprisingly comfortable experimenting in public view.

Apple might transform the sports deal market, too, especially if the MLS bet pays off. The Pac-12 may be kicking themselves for not taking a similar deal (Apple was willing to give the conference a larger sum up front to carry the vast majority of games), but the tradeoff, of course, was that fewer people would actually see the games on Apple TV+ than the typical Pac-12 viewership on linear. (Now it looks like the conference is imploding.) This is the eternal question plaguing leagues, and therefore media networks: reach versus revenue. Just because Apple has money doesn’t mean it’ll gain the reach needed to provide the long-lasting support that league owners want right now, especially as the regional sports model falls apart. On the other hand, younger audiences aren’t tuning into Pay TV, and Apple represents an accessible and affordable means to meet the fan of tomorrow, which leagues are also thinking about as the longevity of sports fandom and its tie to media revenue is being rewritten.

One question I often receive, while consulting, is whether streamers’ money is better spent entering the live sports arena—which involves massive upfront costs—or on creating new TV series and films. Does it make more sense for Netflix to spend $2 billion on a package of MLB games or on original scripted content? Does the answer change if it’s Apple?

Partially, yes—cash is king, and Apple has plenty of it with which to experiment. The more direct answer is that Apple is a hardware company that’s spent the past several years trying to become a software company, and it needs an ad business—across its suite of digital products—to help further define that sector’s revenue potential. Therefore, it needs scale, and scale in a way that doesn’t soil the Apple brand.

Live sports, a premium product in itself, helps Apple obtain scale in its TV business, work more closely with advertisers, and use new technology to create a uniquely Apple experience. Look, Apple needs reach, and established giants like ESPN need revenue alongside new interactive ways to meet younger cord cutting fans. Maybe there’s a trip for C.E.O. Bob Iger to Cupertino in the not too distant future.