Football fans still don't know where they'll be able to watch every out-of-market game next season, but it probably won't be on Apple's (AAPL -1.22%) streaming service.

The tech giant was once considered the leading candidate to land the National Football League's Sunday Ticket package, but negotiations have reportedly fallen silent after Apple couldn't see the logic in paying billions for the rights. The NFL is looking to package the service with its NFL Network and NFL Redzone channels, which certainly make more sense with a traditional pay-TV distributor, not Apple.

Apple's decision to bow out of negotiations as the package became bloated and it couldn't get exactly what it wanted shows discipline. At the same time, it leaves the door open for Amazon (AMZN -2.56%) and Alphabet's (GOOG -1.10%) (GOOGL -1.23%) Google to make a deal.

Apple's already spending big on Apple TV+

Apple's streaming content budget is absolutely massive, even compared to some of the legacy media companies pushing into streaming.

Apple's slowly building up a nice-sized library of original films and series that have gotten a lot of buzz from viewers and critics alike. It's already won a Best Picture Oscar and loads of Emmys.

Apple's primarily focused on developing prestige films and series with big-name talent and high production value. Despite its relatively small library of titles, its production budget adds up fast. Wells Fargo analysts expected Apple to spend around $8 billion on content at the start of 2022. Only Disney, Amazon, and Netflix spent more on streaming video this year.

Apple also inked a deal with Major League Soccer earlier this year, agreeing to pay a minimum of $250 million per year for the rights to every game in the league. It will, however, ask subscribers to pay more for access to those games. It was reportedly mulling the idea of including Sunday Ticket as part of the standard Apple TV+ subscription, to which the NFL objected.

What's more, Apple is continuing to increase the number of series it greenlights while the rest of the industry pulls back on content production to focus on profitability. The only other company developing more series in the back half of 2022 than it did in 2021 is Amazon. If that trend continues, Apple will have more opportunities to develop better programming than its competitors, and the rights to Sunday Ticket won't be as valuable, relatively speaking, to the service.

In short, Apple has better things to spend its already massive streaming budget on than NFL rights. Investors should applaud the discipline Apple's taking in dropping out of negotiations when it can't get exactly what it wants. It's refocusing its budget on content that fits its platform better and retains its value longer. The move could help push the Apple TV+ service toward the black, becoming a valuable part of its increasingly important services segment.

The NFL makes more sense elsewhere

Apple was always a strange fit for the NFL Sunday Ticket package. The league had no pre-existing relationship with the company -- which is actually part of the reason it wanted to sell the rights to the tech giant. But for the way Apple's set up its streaming service, it doesn't make much sense.

Sunday Ticket makes much more sense on either Amazon Prime or Google's YouTube. Amazon has exclusive rights to Thursday Night Football in the United States, and it has effectively used these games to sign up new Prime members and sell advertising. Positioning Sunday Ticket as an add-on to Prime memberships could support the valuable subscription service while improving subscriber retention during the most important quarter in retail.

YouTube, meanwhile, has built the largest virtual pay-TV service in the United States. With over 5 million subscribers, though, it's still relatively small compared to the big cable companies. Google could easily copy the old model for Sunday Ticket -- using it as a loss-leader to sell more pay-TV subscriptions. That would open the door to more ad revenue for YouTube and an improved position in negotiating carriage fees with cable networks.

Either company can probably get more value out of Sunday Ticket than Apple, and it doesn't make sense for Apple to try to outbid either, even if it has the cash to do so.