Apple posted record revenue in the fiscal first quarter of 2022, as it looks to sports and VR for future growth.

The largest publicly traded company in the world by market capitalization brought in $123.9 billion in the quarter ending December 25, 2021, up 11% year over year.

• Apple’s services sector, which includes Apple Fitness+, Apple Arcade, Apple TV+, and Apple Music grew 23.8% to $19.5 billion.
• The “wearables, home and accessories” category brought in $14.7 billion, up 13.3% year-over-year.
• The company continued to have strong profit margins, tallying $34.6 billion in net income in the quarter.

Apple is ready to spend billions on live sports in the coming years to drive subscribers to Apple TV+, according to investment firm Wedbush. 

The company is reportedly in serious talks with Major League Baseball on a weekday package. It has also shown interest in “NFL Sunday Ticket” which could cost $2.5 billion annually in broadcast rights.

VR on the Horizon

Apple is widely believed to be working on a VR headset and associated technology. The headset would likely integrate with the company’s existing devices.

The company has made its Apple Watch integral to its subscription fitness program, which incorporates classes, music, and biometric tracking.

Meta, which has hired around 100 engineers from Apple in recent months, has made fitness a central component of its pivot to VR and the metaverse.

Legends continued its expansion outside its core hospitality and experiences business with the acquisition of analytics-focused 4Front. 

Mike Tomon, co-president and COO of Legends, confirmed to Front Office Sports that the deal was finalized this week, while declining to provide financial terms. The total value of the deal was between $15 million to $20 million, one source with knowledge of the deal told FOS.

4Front began as PCG, founded by Dan Migala and Josh Kritzler in 2007, and was rebranded in 2018. 4Front expertise has been called upon by the UFC, the Chicago Bears, and Ilitch Sports + Entertainment. 

4Front will remain a separate brand operated under Legend’s global technologies solutions division. Migala, a former San Diego Padres executive, will become CRO of the division, while Kritzler will be the COO. Both will also have co-president titles. 

Sixth Street investment

Legends began as a joint venture between Yankee Global Enterprises, an affiliate of the New York Yankees, and Dallas Cowboys owner Jerry Jones. This latest deal comes a year after Sixth Street purchased 51% stake in the company. 

Legends was valued at $1.35 billion at the time of the deal last January. 

Tomon said Legends remains in “rapid growth mode.”

“The unique piece with Sixth Street is that they have the ability to take a long-term view,” Tomon said.

Investment giant Blackstone posted $2.9 billion in net income in Q4 2021, compared to $1.8 billion for the same period the year prior, bolstered by a series of sports and fitness-related deals. 

Full-year income reached $12.4 billion for the financial year, up from $2.4 billion in FY2020. 

Blackstone has $313.4 billion of assets under management, more than double year-over-year, and has been building its portfolio with fitness-focused and sports properties. 

• Last April, it took part in an $80 million raise for startup basketball league Overtime.
• The firm bought a majority stake in Certified Collectibles Group in June 2021.
• Last October, the firm agreed to buy a majority stake in apparel maker Spanx at a $1.2 billion valuation. 

“What’s really happening is an expansion of who we serve and where we invest the capital,” Blackstone president Jonathan Gray told the Wall Street Journal. 

Sports and Media Expansion

The New York firm is expanding in the sports and media businesses, which are growing in popularity and have garnered the attention of investors who seek additional avenues of profit. 

David Blitzer, who owns a stake in Crystal Palace FC and is the Global Head of Blackstone’s Tactical Opportunities Group, told Blomberg to expect more sports deals from the firm.

Blackstone will seek investment opportunities in sports associated with media rights and accompanying content. Investing in teams could also be on the horizon.

Formula 1’s Singapore Grand Prix is slated for at least seven more years as part of a new deal that runs from 2022 to 2028.

Singapore’s estimated annual cost for hosting Formula 1 is $100 million, according to Channel News Asia. Host organizers Singapore GP Pte. Ltd. and the Singapore Tourism Board reportedly paid $35 million per Grand Prix in the previous contract, which ran from 2017 to 2021.

The race has reportedly generated more than $1.1 billion in tourism receipts, according to event organizers. This year’s event will take place on Oct. 2.

As part of the deal, the hosts have agreed to a number of changes.

• The events will switch to renewable energy sources and focus on recycling. 
• Singapore will conduct a sustainability audit to ensure it’s following Formula 1’s sustainability goals — Formula 1 aims to be net zero carbon by 2030.
• The hosts said they will also focus on community relations, diversity, and health and safety.

Pandemic Hurdles

The contract comes after the event’s two-year absence due to the COVID-19 pandemic. Singapore only had around 330,000 visitors last year, a steep decline from 19.1 million in 2019. The F1 pit building was also used as a temporary location for coronavirus patients.

Transport Minister S. Iswaran said in a statement that the event’s renewal will “sustain Singapore’s reputation as a global city.” The event has taken place since 2008.