The NFL: How small-town teams became America's most valuable sports empire (Audio)

So, in my headphones, I have “Are You Ready for Some Football?”

Yeah, I was listening to that, too. Yes, dude. It gets you so pumped up.

It totally does. I feel like I grew up on the Fox Sports theme.

It always makes me think of Thanksgiving.

It makes me think of a Jock Jams tape that I bought. “Whoomp, there it is!”

Three years ago, in January 2023, we released an episode on the National Football League, which, David, I think is absolutely an essential part of the Acquired canon.

Totally agree. We took so much from that episode.

But listeners, a few things have happened since then. One, the NFL has become even more of a juggernaut. Two, Acquired’s audience grew a lot, so many of you never heard that episode. And three, the Ultimate Acquired Universe crossover happened between the NFL and Taylor Swift.

Yes. It was kind of bad timing when we made this originally because it was right before that happened. But, Ben, you forgot the most important thing, which is that this year, in 2026, we are hosting the Super Bowl’s Innovation Summit at the Super Bowl in San Francisco.

Yes, we are. To help us come up to speed and prepare for that, and to help you get pumped for the Super Bowl, we decided to remaster our NFL episode to today’s Acquired production quality standards. We also decided to update the episode with everything that has changed about the league, from streaming on YouTube, Netflix, Amazon, and all those deals to our updated thinking on the international strategy for the NFL, and, of course, how the legalization of gambling has affected the league.

And at the very end, we have the wild story of how private equity has entered the league, too. So make sure you stay tuned for that, because it is nuts.

Yes, we’re going to put all of these updates in a special new section right at the end of the episode. So, listeners, it is time to throw it over to myself from 2023 and onto our remastered episode of the National Football League.

Football is America’s favorite sport by far. In fact, football is more than 3 times as popular as the next-highest sport, basketball. The Super Bowl is watched by over 100 million viewers every year in approximately 2/3 of American households. My favorite Super Bowl stat is that it’s the weekend with the fewest weddings planned of the year.

It is the NFL’s world, and Americans are just living in it, especially the TV networks, which have been reduced from pillars of our nation in their heyday to largely distribution channels for the NFL today, plus some other lesser programming sprinkled in. Of the top 100 TV broadcasts aired last year, 82 of them were NFL games.

Wow, that is wild.

Totally wild. But how did we get here? How did this game become the most valuable media property in America? The story is one of incredible cooperation, of belief in growing the pie over a century, and, just like our benchmark episode, of communist capitalism at its finest.

The NFL owners have made bold, long-term bets in choosing to divide their revenues equally in a way that no other sports league has. Of course, the NFL hasn’t been free of controversy. From the horrible recent on-field collapse of Damar Hamlin to the epidemic of CTE among former football players, players are clearly putting their lives at risk, and the modern fan’s relationship with the sport is complicated.

I personally love watching football. It has been finely tuned over the years to be maximally entertaining, but it comes with cognitive dissonance for me every time I tune in, and I know many others feel the same. Whether pro football is your favorite pastime or you think it’s a societal ill, there is no denying the incredible role that it plays in all of our lives today.

Now, listeners, just like our NBA episode a couple of years ago, this is an episode on the business of football. It’s not specifically about things I learned reviewing game film or the merits of the I-formation. Today, we’re talking about the business. But we do have some sports thank-yous to Michael MacCambridge, author of America’s Game, which provided much of the research for this episode. It’s just the definitive biography-style history of the NFL.

All right, David, take us in. Where are we starting?

All right, we start on November 6 on the campus of Rutgers University in New Brunswick, New Jersey, just a very short train ride up from Princeton, New Jersey, as I know well from my time there. Indeed, a group of about 25 or so Princeton students were up at Rutgers to visit a similarly sized group of Rutgers students, and they were there to play a game of football.

Now, what was football in 1869? This is not someone dropping back in the pocket and throwing a 70-yard bomb.

No, no, no, no. It was essentially what today is classified as mob football, quote-unquote, or medieval football. This had been played for centuries in England, and basically the only goal of the game was for one side to get a ball to a certain spot on the other side. That was it. There were no rules. Any number of people could participate on either side. You could do anything up to and including maiming and killing people on the other side or your own, which happened quite frequently.

I mean, keep in mind, this is 4 years after the end of the Civil War.

Yes. So now, why were these 2 groups of Princeton and Rutgers students so interested in playing this game, this terribly violent game? Well, back in England, it was quite popular among public school students. Public schools in England are like private schools in America, and they were starting to adapt it into an actual sport.

So, like any sort of stepchild nation, these American college kids were trying to keep up with the social elite back in the mother country and do the same thing: bring football in a codified way to schools in America. There were 25 players per team, so 50 people on the field, with a round ball that could not be picked up and carried and couldn’t be thrown. The object was to kick the ball through the opponent’s goal, for which they received 1 point.

Okay, so soccer with 25 people on a team.

Yes. But that was the start of what would become intercollegiate American football. This became, just like back in England, wildly popular. Over the next 5 to 10 years, it got more and more codified and formalized among the Ivy League. It came to be seen as this integral part of the college experience, this character-building experience.

It was also still wildly dangerous. Deaths and serious injuries were very, very common through this period. Finally, in 1905, there were 19 fatalities in intercollegiate football in the US and a serious injury at Harvard to one Theodore Roosevelt Jr., son of sitting President Theodore Roosevelt.

So this was a major event. After that happened, Teddy Roosevelt called a summit of all the major colleges and universities in New York City and said he was going to outlaw the game in the US unless they adopted major changes to make the game safer. You also have to imagine, of course, that it hit close to home for him with his son, but he was sort of viewing this as, “Hey, the people who are the best and brightest are playing this game that is actually hurting the nation. We are cutting down people in their prime, and we kind of have to do something about that.”

Yeah. And it’s a fine line, right? I think the violence is a critical part of this sort of rite of passage, and Teddy Roosevelt probably kind of liked it because this was a training ground for future military and governmental leaders of America.

I had no idea until doing the research that this summit Teddy Roosevelt called was where he basically told all the presidents of the universities, “Hey, you guys have to figure this out, or I’m going to outlaw this.” In response, they created the NCAA. That is the beginning of the NCAA.

Oh, I didn’t realize that.

Yeah. It was to regulate and codify and make the game of collegiate American football safer.

Huh. Yeah. Crazy, right? So following that, this new institution that became the NCAA instituted the creation of a neutral zone. They abolished the use of wedge formations, so they did make the sport safer. There were still a lot of injuries, though, and not a lot of protective padding was being worn here.

And a lot of this predates even leather helmets. People were just playing this in regular clothes.

Yes. But they also made a change to the rules after this summit that would become the defining element of American football and fully differentiate it from soccer and rugby, which itself came from soccer.

Rugby is the set of soccer rules that the English public school Rugby used. Hence why it’s called rugby. The rule that the NCAA instituted was legalizing the forward pass in 1905.

And that becomes, obviously, a defining characteristic of football.

And to underscore how much this changed things, football—American football—was exclusively a violent game to this point in history. But when we think about American football today, and you’re watching Monday Night Football with the beautiful popping colors, all the lights, and all the slow motion, there’s a beauty to the game.

There's a romanticism. There's a moment where you hold your breath. The world seems to move slowly. It's a ballet. This introduced what would become the counterbalancing force to the incredible violence of football, which is the true beauty of watching it.

Yeah, the beauty and the strategic element, too. The offensive playbook, the defensive coverages, the audibles. There's no way a casual fan can understand all of it. And yet the ballet, as you say, is mesmerizing to watch. Collegiate American football just becomes wildly, wildly popular and still is to this day. It is a huge part of the American sports landscape, and it was even more so then.

All right, so the NCAA has formed. We've now got the forward pass. So modern football—does that lead to the NFL?

No. Again, very specifically, we're spending a lot of time on the origins of football and college here, but it's so important for understanding the NFL. This is a college thing. This is an American collegiate experience that these elite young men go through, this dangerous, kind of warlike activity. There's this sacred element to it.

So much so that while in the early 1900s, some professional teams do start to pop up around the country—and these are teams, not leagues. These are barnstorming teams that would go around. There's no organized schedule of play, but they're viewed not only as second-rate to the college game. They're dirty. Why are you taking this esteemed thing that our best and brightest participate in and turning it into this entertainment act?

Yeah, it's even more than that. Many people, especially the elite, viewed professional football as actually immoral because it was profaning this thing with money. The gripe that they had against it was the money. It wasn't the game. It wasn't how the game was played. It was the same game, often with the same people who played in college.

Oh, I see. It's supposed to be amateur. It's supposed to be amateur. This should not be a professional activity. This is a rite of passage for young men. So through the teens and 1920s, that was very much the attitude.

And for professional sports, there was one game in town, and that was baseball. Michael MacCambridge has a great quote at the beginning of America's Game, where he says, “To say that baseball was the 1 sport in America is to imply a hierarchy where none existed. Baseball towered above the sporting landscape like a colossus, the unquestioned national pastime, the only game that mattered. Most fans had come to accept baseball's primacy as something immutable, as much a part of the natural order of things as air and water.”

Of course, this is the era of the New York Yankees, Babe Ruth, Lou Gehrig, and all these storied parts of American history. Baseball is very much a professional sport played for money, where the goal of teams is to make money, and the business model is that they sell admission to the games.

Yep. So it's not like professional sports were all looked down upon. Not at all. It was that football was this very special thing. Yes. So into this dynamic environment in 1920 enters the American Professional Football Association, soon, in a few years, to be renamed the National Football League.

It started on August 20, 1920, when the heads of several of these barnstorming, quasi-professional football teams met at the Jordan and Hupmobile auto showroom in Canton, Ohio. Now, the driving force behind this meeting being called is one George Halas, and he is currently in Decatur, Illinois, where he is an employee of the A. E. Staley Manufacturing Company. His main duty is to organize, coach, and be the star player for the company football team,

Which, of course, is called the Staleys.

Yes.

The sponsorship is so deeply rooted in the NFL that the very first team was actually named for the sponsor.

They weren't even sponsors. It was the employees of the company who played for it. The employees now sort of had a mandate to go out and recruit employees who happened to be good football players.

So these folks that come together at George Halas's instigation have a goal. They want to legitimize professional football in the eyes of Americans, and they develop a plan for doing so. They think they can really separate the pro game from the college game, make it a legitimate thing, and they have 3 parts to the plan.

1, they are not going to sign any current college players. There's going to be a strict demarcation between the college game and the pro game. They will not try to get any current college players to come play for a pro team, which would happen under assumed names. You can imagine these college kids: They want to make money.

This is so ingrained in the NFL that it is basically still true 103 years later. Here we are in 2023. You still can't go to the NFL out of high school. You can only go with the junior year of your graduating class from college. You can go 1 year early. In 100 years, that's the 1 concession that's been made.

So point 1, they're not going to raid the college game. Point 2, they're going to endeavor to play the game at a high ethical and rules-based standard.

The NFL

Yeah, these teams that are coming together, some were independent, some were part of the Ohio League, and some were part of the New York Pro Football League. There were slightly different rulebooks and slightly different customs that were going on. This is the idea that, no, we need to unify these things to set an expectation for fans.

Yep. Standardize what the game is.

The NFL

Yes. And then number 3, perhaps the most important, they're going to make Jim Thorpe the president of the league. These guys are smart.

Now, many of you probably know who Jim Thorpe was, but Jim was at that point in time the leader of the Canton Bulldogs, one of the teams that was strategically included in this discussion. The meeting happened at that Canton auto showroom, probably because of this. Jim Thorpe was the GOAT. He was the greatest athlete that had ever lived to that point in time.

Which is not to say that if you put him through the NFL Combine today, he would win. It's sort of handicapped by all that we knew about modern sports science in his day.

The NFL

The distance between Jim Thorpe as an athlete and any other athlete in the world was greater than I think that distance has ever been since. So Jim Thorpe was a Native American who was part of the Sac and Fox Nation and ended up playing college football at a small school called the Carlisle Indian Industrial School, which happened to be coached by a guy named Pop Warner,

Who, of course, is the person that all of the youth football leagues are named after today—the Pop Warner league. He and Pop led this small, tiny Carlisle Indian Industrial School to a national championship while he was playing there against all these big Ivy League powerhouses, Ohio State, and others.

The NFL

And the deep, deep irony, given what was about to happen with professional sports in the NFL becoming completely white, is that the first star player, the whole basis of the league, and the first president of the league was a person of color.

In addition to playing professional football, the thing that is just unbelievable about Jim Thorpe is that he won 2 gold medals in the 1912 Summer Olympics in Sweden, in the pentathlon and the decathlon. He had never competed in the decathlon before.

Oh, my God.

The NFL

The first time that he competed in the decathlon was in the 1912 Summer Olympics, and he won the gold medal.

Wild. Wasn't he also an outfielder with the New York Giants?

The NFL

Yeah, and basketball, and he won gold medals. Wild. So this new league, the proto-NFL, formed in 1920 with 14 teams and about as much instant legitimacy as you could get from Jim Thorpe. They pretty quickly became the biggest professional football league in America. There's not a lot of stiff competition.

And they consolidated the smaller leagues to create this in the Midwest.

The NFL

Yes. But that said, the 1920s and really the 1930s, too, it's an uphill battle, shall we say?

Oh, yeah. If you look at the—what is it, 15 teams or so—that existed in 1920, there are 3 franchises that endured out of all of those. The rest of them—the Columbus Panhandles, the Akron Pros, the Chicago Tigers—all went under. The only ones that stood the test of time are the Decatur Staleys, the Racine Cardinals, and one we have not talked about yet, the Green Bay Packers.

The Decatur Staleys would become the Bears. Chicago Bears.

The Bears. Yes. Actually named after the Cubs.

The NFL

That's right. Because they played in Wrigley Field, and Bears are bigger than Cubs.

Yep.

The NFL

So it was an uphill battle for a couple reasons. 1, even despite all their efforts, the stigma of professional football really does not wear off, especially in the 1920s.

After the NFL is formed and starts getting publicity in 1922, Michigan—sorry, Ben—Michigan head football coach Fielding Yost gives a very widely reported speech in New York City where he's talking about the new league, and he says, quote, “Pro football robs the great American game of many of its greatest character-building qualities. The ideals of generous service, loyalty, sacrifice, and wholehearted devotion to a cause are all taken away.”

Now, of course, he's partisan because he's a college football coach, but this really was still the prevailing sentiment. The other problems the NFL faced are that most of these teams are based in small towns. They're not in big cities. 100% of these teams either fold or move to larger cities, except for the Packers. They're the only small-market team that stood the test of time.

Yeah. There was no TV. There was no internet. The market size was not unconstrained for these teams. The market size was quite constrained. They were filling a niche and a demand for football in these towns, but they weren't going to make that much money.

And they're massively loss-making. I mean, these teams last 2 to 5 years, and there are another 15 teams that are formed between the Chicago Bears and, eventually, the New York Giants, which are formed around 1925, that stand the test of time. So it's amazing, all these teams that spin up and spin down within 5 years of each other in this decade. It just became completely nonviable economically for small-town teams to survive, except for Green Bay, and they all end up moving to the big city, where they're very much playing second fiddle to the baseball teams.

Yeah. And most of these don't even end up moving. They just end up closing their doors.

The other important thing, though, to say about the NFL during this time before World War II is that, in the beginning, there was Jim Thorpe, who was the first president of the league. He's a figurehead. He's only president for a year, and then they bring on a real administrator. But, obviously, he was Native American; he wasn't white. There were several Black players in the league at that point in time, and it wasn't a big deal. In fact, the first NFL champions in that first season, the Akron Pros, had a star player and head coach who was a man named Fritz Pollard, who was Black.

Wait, he's the star player and the head coach? I love that. Unfortunately, in the mid-1930s, supposedly after George Preston Marshall comes into the league as owner of the Boston Braves, which became the Boston Redskins and then moved to Washington, D.C., at his behest, they adopt the same policy as Major League Baseball and completely kick Black players out of the league. And it wouldn't be until after World War II, and for the Redskins, not until 1961, that they integrated.

The Redskins, commensurate with keeping that name for as long as they did, were very, very, very late to integrate the team. I think they had a really big fan base in the South, and there weren't a lot of NFL teams in the South at that point. So it was both because he was racist and because he realized he would probably lose a lot of his fan base, who were also racist, by integrating his team. It's a horrible thing that it was a strategic advantage for him to get that fan base by having an exclusively white team. So all this would continue as the status quo, with the league barely creeping along, until after World War II, when both America and the NFL would change forever and pretty radically.

So after the war, when all the troops come home and there's the GI Bill, there's this new middle class in America that didn't go to these elite private-school Ivy League institutions or even the Ohio States of the world or the Carlisle Indian colleges, and they're coming home from the war. They don't have college educations. They may be now getting them through the GI Bill, but they have jobs. They have disposable income. They increasingly have radios and soon-to-be television sets. They want entertainment.

You sort of have this opportunity to be a new thing in America that people do with their time and dollars. And keep in mind, every owner's experience to this point is subsidizing losses. If you're bringing on other people to try to be co-owners of a team with you, or you're deciding that your family is going to carry the weight the whole time, or that your company is going to carry the weight of the team, you're just subsidizing losses. So every single person involved in professional football ownership at this point is not even paying lip service to the love of the game. They're purely in it for the love of the game. But now, interestingly, there's a business opportunity.

Yeah. And all these American GIs coming home from the war and their families, they don't have the same hang-ups and preoccupations about college football that the elite did before the war because they didn't go to college during their younger, formative years. So there is this big opportunity now after the war for professional football in the NFL to become a much bigger thing. And they probably would not have realized it, except their hand was forced in 1944, right before the end of the war.

A lot of people could see this opportunity. Football was a very compelling game. The NFL was only in, I think, 8 cities at that point in time. To really realize it, you had to expand. You had to be in a lot more cities. And there were wealthy businesspeople in cities all across America—the East Coast, Midwest, the South, Florida—who wanted to add teams and come into the NFL, but the NFL owners weren't interested in expansion, right?

And those 8 teams: the Cardinals, of course, they're in Arizona today; you've got the Chicago Bears, the Green Bay Packers, the New York Giants, the Detroit Lions, and the Boston Redskins, which had since moved to Washington. You've got the Philadelphia Eagles, the Pittsburgh Steelers, and at this point—and this is crucial—the Cleveland Rams.

Yes. The Cleveland Rams, owned by the forward-thinking Dan Reeves.

Yes. And this is the first Cleveland team that did not shut down, but instead moved.

So the other potential ownership groups in other cities across America that wanted football leagues, at a certain point, come 1944, they were just like, “Well, the hell with you, NFL. We'll go start our own league.”

So a new professional league gets founded, the All-America Football Conference, in 1944.

The AAFC.

And it's got some pretty serious firepower. It's organized by one of the country's preeminent sports journalists based in Chicago. It's backed by some high-powered ownership groups, including the famous Hollywood actor Don Ameche in Los Angeles, wealthy businessmen in San Francisco, New York, Chicago, and Miami. And they have reached a deal with the legendary Ohio State coach Paul Brown, when he's coming home from the war from his service, that he's not going to go back to the college game. He's going to come coach the new AAFC Cleveland franchise named after him, the Cleveland Browns.

Yes. The man who transformed football, Paul Brown. And this is the very first time in the modern NFL era where you have this real threat of two professional football teams that people really want to see in the very same city: the Cleveland Rams and the soon-to-be Cleveland Browns in the AAFC.

Yes. And in a head-to-head war between those 2 franchises, the writing is on the wall about who's going to win, and it's not going to be the Rams. Now, Dan Reeves thought that the NFL should be on the West Coast and should be truly national. And he wanted to move the Rams to Los Angeles, but the NFL owners, by the bylaws, required 100% unanimous approval from all the owners to move a team, and they didn't want to approve it.

And it makes a lot of sense. These teams have lost money forever. It's like we're just on the precipice of having a real business here. Don't make us figure out how to get these other 7 teams to L.A. once every whatever it is, 6 or 7 games.

So now the war's ending. The AAFC and the Browns are coming in, and then the dagger comes right before the 1946 NFL annual meetings in January. Dan Topping, who owns the NFL's Brooklyn Dodgers and also the New York Yankees, the baseball team—the highest-profile, wealthiest owner in the NFL—defects to the AAFC. So there's a major crisis.

The first thing they do in the January 1946 annual meeting is boot out the then-commissioner. The owners are like, “Okay, to lead this fight, we can't have somebody from the outside. We need to draft one of our own from the ownership group here on the inside who's going to be able to marshal everybody together and lead a coordinated response to this existential threat.”

They install Bert Bell, who is the owner of the Philadelphia Eagles, as the new commissioner of the NFL, and he's tasked immediately with drafting a competitive response to the AAFC. And they decide it needs to be 3 things. One, they need to go meet the AAFC where they are: be nationwide, be on the West Coast, and go to California. Two, the NFL, if they're going to win, needs to put out a superior product—a better game on the field than the AAFC. And three, for the first time, they need to do a better job than the AAFC, or at least as good a job, at actually telling America about it. They have to go prioritize. They have to go win fans and win consumers' hearts and minds.

So fronts 1 and 3 are basically all handled by Dan and the Rams. Immediately after Bell comes in as commissioner, he orchestrates approval for the Rams to move out to California. And it's a good thing they did, because when play eventually starts in the 1946 season, the new Browns in Cleveland draw 60,000 fans for their very first home game, which is more than the Rams did for the entire season the year before.

Yeah, Paul Brown was quite the anticipated figure in Cleveland. He had coached at Ohio State. He had coached one of the Navy teams, and he was known for knowing how to whip a football team into shape, while believing that players had to know the intellectual side of the game inside and out, as well as the physical part of the game. It was a huge part of his strategy to make people memorize the playbook and take written tests. And if they failed these written tests about the plays, the rules, or Paul's strategy, he'd kick them off the team,

no matter how good they were. And it's the first time someone really looked at the game and said, “Sure, it's a game, but actually this could be a science.” He was almost like the first Moneyballer. One of the first innovations he made was that he was one of the first coaches to really review film and recognize patterns in plays and statistically, manually tally, “Here's what we have to do against this team and that team, and here's what worked for us last year and here's what didn't work for us this year.”

Paul Brown was the first modern sports coach—not just football coach, but sports coach, period—in America. Every human is flawed, so we shouldn't make him out to be the messiah or something, but he was basically the first coach to start the racial integration of the team and recognize that if we have the best players, then we're going to win, so we just need to do whatever it takes to get the best players on our team.

The NFL

The other thing that he did was employ an entire staff of assistant coaches year-round. I think it was 6 people in addition to him. No other team did that.

On the racial integration front, the AAFC was going to be an integrated league from the beginning.

That's counterpositioning right there.

The NFL, and especially the Redskins, didn't have much interest in doing so. But moving the Rams to L.A. forces the league to integrate because the L.A. Coliseum, where the Rams want to play, is a publicly owned building, and it's controlled, then as now, by the L.A. Coliseum Commission. When Reeves and the Rams come out to petition their case that they should be allowed to play in the Coliseum, the commission says, "Okay, we'll let you play here, but we're not going to allow any segregated home teams to use our stadium as their home stadium. So, you're going to have to integrate the team." This is where the public-relations aspect of the Rams becomes clutch.

The Rams were so good at PR. So, A, they agree right away. B, not only that, they say, "Great, we'll sign Kenny Washington," who before the war had been a hero in Los Angeles. He was a huge star for the UCLA football team. All this was helped by a savvy young intern for the Rams, a young Pete Rozelle, who helped craft a lot of this strategy.

But put a pin in Pete Rozelle for the moment. For a quick review of where we are right now, you've got the NFL. It's an 8-team league. The Rams have just moved from Cleveland to L.A. And then you've got this AAFC that's starting to play. What year do they actually start?

The NFL

1946, the same year that the Rams moved to California. The roster of AAFC teams is the Cleveland Browns that we've talked about, the New York Yankees football team, the Brooklyn Dodgers football team—

Which defected from the NFL.

The NFL

Yes. The Buffalo Bisons, the Miami Seahawks—which is interesting; that has nothing to do with the Seattle Seahawks. They just reused the same name—the San Francisco 49ers, the Los Angeles Dons, and the Chicago Rockets. So, you've got 2 L.A. teams now: an AAFC team and an NFL team.

You've got the NFL and the upstart AAFC, which would only last 4 years but would change the game quite a bit. By forcing this competition, they forced the NFL to do a bunch of things that really were in the NFL's best interest, but they wouldn't have done absent competition. This is the first time where we really learned the lesson: the football that people will watch is the most entertaining game.

Yes. Because this is something that would not be obvious, I think, but for running this experiment. What is the most entertaining game? It's the most competitive game on the field.

For all that we were just lauding Paul Brown and his legendary teams, he was too good. His teams were too good. So, the Browns end up winning all 4 AAFC championships. They only lose 4 games in 4 years, and the game becomes boring. There's no drama. It's a foregone conclusion that the Browns are going to win.

If your team is playing the Browns, and the Browns are great at home, but when they're on the road, the fans are like, "Why am I even going to go watch my team get destroyed by the Browns? Why would I want to do that?" By the way, those words have never come out of my mouth before, growing up a modern Browns fan. Well, the current Browns are not the same Browns as the old Browns.

The NFL

They actually are the same. Importantly, the franchise and records stayed with Cleveland. The Baltimore Ravens are a brand-new team that started in the ’90s, not a relocated Cleveland team, despite the fact that they took the whole front office, team, and ownership.

That's some serious rewriting of history there by the NFL.

The NFL

Yes. So, to your point, the NFL learns this lesson here: "Oh my gosh, we've been sort of fortunate that this didn't happen in our league, but it's really nothing intentional that we did. There's nothing structural that we did to ensure there was no Cleveland Browns in our league. It sort of accidentally happened."

By observing the counterexample of boring football where there's 1 dominant team, it kind of has to become a core tenet of our league now to fight these other guys: enough equality between teams that it is always very competitive.

And it's even more important back then because there was radio, but there wasn't really TV yet. Even though we're in the post-World War II era, in these first few years—5 years after the war—the installed base of TVs was just starting to roll out across America. So, this is still an in-person game, and the business model of professional sports was ticket sales, in-person attendance at the games.

I don't think the AAFC model of the Browns being dominant would work ever, but at least today you could watch the games on TV. You'd be like, "Oh, I'm always going to see a show when the Browns are playing." That wasn't the case back then. You had to get butts in seats. That was the only way you were going to make money.

This becomes a feedback loop. If you don't make money as a team, you can't afford to put a quality level of play on the field, which further tips the competitive dynamic out of balance.

The NFL

Totally. And if you have a league that figures out how to make sure that it's always competitive, what that translates into from a business perspective is: let's say every stadium has 40,000 seats and you have 8 teams. That means you have the capability to sell 160,000 seats every weekend, and your goal is to sell 160,000 tickets every single weekend.

So, what you basically need is to make sure that it's always a great game to come watch. To your point that the business model is around the gate, or ticket sales, rather than TV, that actually stayed the case until 1977. That was the first year that the NFL made more money from television revenue than from ticket sales. That is a full 30 years later than the time period we're talking about here.

I didn't realize it was that long.

The NFL

Yeah, because television's going to come in a big way. But back to Bert Bell, the newly drafted commissioner of the NFL, this is his great insight that he realizes as he's marshalling the NFL owners in the battle against the AAFC. He adopts this as his mantra: literally, they made a movie with this title, Any Given Sunday. On any given Sunday, any team in the league should be able to beat any other team.

He pushes this through with the owners and gets them all to agree to this: the only way we're going to survive and prosper is if we agree that none of our teams can get so dominant that we end up with a Cleveland Browns situation.

So, David, Bert Bell, the new commissioner of the NFL, adopts this mindset of, "We have to keep the game competitive always." What do they do structurally?

The NFL

Any given Sunday? So Bert and the NFL do 2 things. First, he completely overhauls the way the schedule works. In the past, the schedule would be just like, "Yeah, whatever. We're all going to play each other in random order."

He realizes that the schedule is actually an incredibly important strategic lever, and he looks at the results from last year's season and arranges the schedule such that the weaker teams from last year play the other weaker teams for the first half of the season, and the stronger teams from the previous season play the other stronger teams for the first half of the season.

That way, he can come as close as possible to guaranteeing that roughly everybody's going to have, statistically, a relatively even 50/50 record going into the midway point in the season. So, there's going to be drama about who's going to end up winning, even though the actual level of talent might diverge quite a bit within the league.

Yeah. Even if you're a great team, if you've only faced great teams for your first several games, you're going to be a little banged up coming into the second half of the season.

And the NFL still does this to this day.

I didn't realize that.

Yeah, this is a critical sleight of hand in making the whole thing work. But this is camouflaging it. If there's a competitive-balance problem underlying everything, this is only camouflaging it. How do you fix it?

Yeah.

Well, there's no free agency at this point.

No, there isn't. And that's important because there's no way to just go sign a veteran player whose contract with another team is up to make your team better. You need to get brand-new rookies into the league. It's pretty ridiculous. There actually wasn't a concept of free agency at all until 1993 in the NFL.

I know, which is ridiculous. And so the NFL and Bert Bell come up with the idea of having a draft of college players. And not just any draft, but a draft in reverse order of where you ended up in the standings in the previous season, so that the worst teams in the league get the first picks for the next season's draft.

And in doing the draft, we just continue to see, over and over and over again, the pro game having reverence for the college game because America has reverence for the college game. It's this idea that we will watch the college football game very carefully, and then we will create a day when we will be eligible to pull the people out of that game and into our league.

And it's incredible, the artifice that grows up around this.

Oh, 50 million people watch this thing today.

I mean, we were watching YouTube videos and researching how Taylor Swift was at the NFL draft a few years ago when it was in Nashville. It's a huge event. It was actually the first big coup for ESPN. When ESPN started in 1979 and 1980, it was televising the NFL draft.

Genius.

So these two elements—stacking the schedule and then the reverse-order amateur draft—form the nucleus of Bert Bell's NFL strategy that it's had ever since, which comes down to league first, team second.

Yeah. And there was a structural thing that they did, too, which was to create a shared pool of ticket revenue. I get to keep 60% of that revenue because I'm the home team, and at this point in history, super early on, the other 40% would go to the visitors.

Over time, the league would evolve a structural system so that 40% went into a shared pool that got divided among everyone else, to lean in harder to this shared mindset. This is before the TV revenues that are shared today. So, Ben, maybe this is a time to talk about television's impact on the NFL.

So, as we said, the AAFC only operates for 4 years. The Browns are too dominant. The AAFC folds after 4 years. Only 3 teams of the AAFC's 8 come over to the NFL: the Browns, the 49ers, and the Baltimore Colts.

Who are, of course, now the Indianapolis Colts.

Here we are now. It's the dawn of the 1950s, and the television installed base is here. TV set sales in America in 1946, the first year after the war, were 7,000 TV sets sold in America.

In 1947, there were 14,000 TV sets sold. The market doubled.

Oh, I love that you looked this up. In 1948, there were 172,000 television sets sold, and it only grew exponentially from there. By this point in the early 1950s, there are 25 million homes in America with a television set.

Man, did history turn on a knife's edge for the NFL's sake, from their perspective. Thank God the AFL went into business and forced the NFL into a competitive response—to expand, to change the game, and to start to discover and understand this league-first mentality.

And then also, thank God they beat them by the end of the 1940s and the beginning of the 1950s, because now the NFL is the only game in town for professional football in America. They're the only national league right as TVs are showing up, and they are actually the only game in town for national sports television programming, period.

There are other sports, most notably baseball, as we've been talking about. But baseball, if anything, was a victim of its own success because it was the dominant professional sport. They had much better attendance numbers, and they had all the games—

162.

The gate, the ticket sales, were so important to baseball that with the advent of television, the baseball owners thought television was bad, and they ended up fighting it.

Well, so did the football owners for a while.

Well, so did the football owners, but they had a lot less to lose. Pro football was still an underdog sport here, even in the early 1950s. They were up-and-coming and trying to get more people to go to games, while baseball generated a ton of stadium revenue from filling its 40,000-person stadiums.

Indeed, baseball had a lot to lose. And to be fair to all of them, in the early days—and I think for a long time—local-market home television airing of home games absolutely depressed in-person attendance. When the very first NFL TV deals were signed, these were individual local deals signed by team ownership and their local television broadcasting affiliate. It wasn't with CBS broadly. It was with whatever your local TV station was.

They would black out all the home games because they would say, “We need to fill this stadium.” Until 1977, the stadium gate was actually the biggest form of revenue. Why on earth would we cannibalize our experience when someone could just watch it from home? Absolutely not.

It would later take a presidential order from Richard Nixon to end the home blackouts. Even then, only if the home games were sold out would the blackout be lifted. It wasn't until after September 11 that blackouts were lifted even if the home game wasn't sold out.

But it's a mess. As you say, Ben, in the 1950s these early television experiments are being run with sports, and it is pretty bad. The Los Angeles Rams did an individual deal in 1950 with the Admiral Television Company to broadcast the Rams' games, but they put a clause in the deal because they'd seen what had happened with baseball: Admiral would guarantee revenue back to the Rams for any loss in attendance.

This was a really bad deal for Admiral because attendance declined 50%.

Which is crazy, considering how bad the broadcasts were. The fact that was a suitable replacement for going to the game—I mean, they would put one camera up on the 50-yard line, and they wouldn't have any microphones. They'd just say, “All right, this is the game.” Maybe they'd have some commentators.

Oh, and it was in black and white on a tiny screen. All of these things were true. But the industry was new, and everybody was figuring everything out: the TV-set manufacturers, the networks, the content, and the sports leagues.

One of the big marketing messages was, “The game comes to you. You don't have to leave. Buy this appliance, put it in your home, and it's like a magical window. You have a seat at the game.” And it really did depress attendance.

A saying ended up being developed in baseball that, sadly for baseball, they stuck to for a very, very long time: “Radio whets the appetite; television satiates it.”

It's a new revenue stream, but it's hurting the golden goose of ticket sales. All the way through the 1950s, it wouldn't really be a particularly large revenue line. But as it did start to grow, everyone was negotiating individually.

It ended up being the case that the New York Giants were making $200,000 in 1959 on their TV deal. The Packers were making zero. I think the Packers were making $5,000. They did have a TV deal, but I think it was $5,000.

This is the thing: football, even among the individual teams, kept experimenting through the early 1950s, whereas baseball basically shut it down and turned away from TV. One of the things they figured out was, “Television broadcasts depress the gate at home, but there's strong demand in local markets to see the team's away games when it's traveling.” For the first few years, that's the main model of television broadcast for the NFL: just showing away games. But there was a lot of demand for that.

And it's funny because now we refer to this as a blackout, but at the time, because they were only selling to local affiliates, it wasn't that it was a blackout. It was that your local TV station only had the contract to broadcast the away games. There was nobody within your antenna's reach broadcasting that game when it was at home.

So this becomes a pretty meaningful revenue stream, even though, as you say, it would be a long time before TV would surpass the gate in revenue for the NFL. By the end of the 1950s, the league as a whole, with all 12 separate contracts, was making over $1 million in TV revenue annually, whereas at the beginning of the decade, it was less than $100,000.

It also becomes clear that certain football games have a really big audience on TV. In particular, the 1958 NFL Championship Game, known as the “Greatest Game Ever Played,” between the Giants and the Colts, led by Johnny Unitas, was a sudden-death overtime dramatic win that garnered 45 million TV viewers across the country, including President Eisenhower.

Wow. So, was this a national broadcast?

National broadcast of the NFL Championship Game that year.

Importantly, this is not the Super Bowl. David and I aren't being coy by not calling it that. That is not what this was. And we're still missing about half the teams that will end up competing for the Super Bowl, right?

But 45 million viewers—this was unprecedented. There was a huge opportunity for professional football and television.

Yes.

Which, once again, the NFL was not the one to fully recognize.

Competition does create the best product, and the NFL, time and time again, has had its hand forced and then reacted really well to a new upstart.

Totally. So in this case, as the 1950s draw to a close, once again, just like toward the end of World War II and the end of the 1940s, there were a whole bunch more cities and ownership groups that wanted in. It was a clear business opportunity, and there were only 12 teams in the NFL at this point.

But once again, the NFL owners were dragging their feet. They were like, “We don’t really want to expand. Maybe we’d be open to the Chicago Cardinals.” They were struggling: if the ownership group that owned them were to sell, maybe they would allow the team to be moved, but go talk to them.

And I really don’t think this was a business decision of, “We don’t want more people taking our pie.” I think they recognized that there could be more money made if you had more cities. But the NFL owners at this point were a tight-knit fraternity of people who all thought the same way, who largely respected the game, and who owned the teams when they were massively loss-making.

They didn’t want to let anyone into their club, even if it would be good for business. The NFL, as we know it today, is a business. But at that point in history, it was really like each of these teams were on their own island. They were deeply competitive against the other teams. They didn’t think of those people as fellow employees of the league. It was more like, “We each have our own club,” but the owners of each club had this thing with each other, this fraternal bond.

They were willing to submit to this league-first mindset because they knew it was good for all of them. But that didn’t mean they wanted to expand or change things. And David, I am excited we are finally here: the birth of the American Football League.

The AFL.

Yes. Their competition with the NFL, and really the era of national TV contracts. This is the story of how the NFL became the league that we know today.

Let’s go. So, the story goes that one of the potential new professional football team investors, a gentleman named Lamar Hunt, who was a young heir to a very large Dallas, Texas, oil fortune, kept trying to talk to Bert Bell at the NFL and do anything he could to get an expansion team or buy the Cardinals. He just wanted to own a football team.

He was flying back from seeing the Cardinals and having been rebuffed, and he had a eureka moment on the plane. He had been hearing that there were all these other people who wanted to buy the Cardinals, too, and get in line: this person in this city and that person in that city. And Lamar said, “Wait a minute. I don’t need the NFL. I don’t need the Cardinals. I’ve got a list of all these other wealthy people who also want to have professional football teams. Why don’t I call them and we’ll start our own league?”

Yes. And thus begins the most successful attempt to challenge the NFL by far.

So in August 1959, he and several other owners formed the American Football League with six teams soon to become eight: the Dallas Texans, Boston Patriots, Buffalo Bills, Houston Oilers, Miami Dolphins, New York Titans, soon to be changed to the New York Jets, the Denver Broncos, the Los Angeles Chargers, and the Oakland Raiders. You’ve probably heard of most of those teams.

Yes, this one ended very differently than the AAFC did.

Very, very differently. So, at first, Bert Bell and the NFL were trying to pretend to be supportive until it became a legitimate threat. But then, in 1959, right after the new AFL announced that it was going to start its league and commence operations, Bert Bell died suddenly.

Once again, just like back with the AAFC, the league was in crisis and forced to act. And unlike the AAFC, things were going to be a little different this time because of the television aspect.

Yes. And this is all being led by—you mentioned Lamar Hunt, who was the Dallas Texans owner.

People might know them better as the Kansas City Chiefs today.

Yes.

So Hunt had been studying the NFL. He knew about the league-first mentality. He had also been studying baseball. He had been meeting with baseball owners, including Branch Rickey of the Brooklyn Dodgers and Jackie Robinson fame, who at that point in time was out of Major League Baseball and was trying to start a third independent baseball league.

An independent baseball league.

A third independent baseball league. Yes. With some pretty radical ideas, really borrowing from the NFL and the league-first mentality. He wanted to embrace television in this new baseball league and have a radical solution where all the clubs in the league would share all of the revenue from a television deal.

Pretty crazy.

So Lamar Hunt and the new American Football League, the AFL, took this cast-aside idea from baseball and ran with it. Hunt said, “We’ll just centrally negotiate one national television contract for the entire AFL, and then we’ll split the revenue completely equally among all the teams.” This was the epitome of the league-first mentality. It would be great for them and help them compete with the NFL.

And in some ways, it was easy for the upstart to do this in counterposition because they had no existing TV contracts. But they did get laughed out of the room. They went to the TV networks with this, and each of the TV networks was like, “Oh, cool idea, but who cares about your league? No one’s going to watch this. So, we hear your pitch. We understand that this is very innovative and breakthrough, and very different from what the different NFL teams are doing, but we don’t really care that much.”

And the 2 major networks at the time, CBS and NBC, had deals with NFL teams. But there was another upstart TV network out there: ABC. They were the perfect match.

Hunt went to ABC, and they found a young executive there. ABC didn’t even have a sports division at this point in time, but a young executive within ABC named Roone Arledge.

This is probably the fourth episode we’ve talked about Roone Arledge on.

What a legend. Roone would ultimately become Bob Iger’s mentor, and Bob Iger would rise through the ABC sports ranks at the beginning of his career before taking over Capital Cities and then, obviously, all of Disney.

So this was Roone’s big opportunity. He saw that it was obvious at this point in the late 1950s that there was demand for nationally televised football games.

This is actually shocking. I know to everyone right now we’re like, “Well, of course.” But it used to be the case that Sunday afternoons had a hole in their schedule. CBS had no good programming, and so that’s why they would originally agree to, “Sure, we’ll broadcast some NFL games.”

But no one expected the American public in their living rooms to take to football as an event, as an entertainment form delivered over the air to the living room, the way that it did. And so the NFL rebranded Sundays in America and turned them into a completely different way that people spent their time. That was shocking.

Well, and with those early NFL deals, those were individual deals that teams made with networks and local stations. So it was a local thing. It wasn’t Football Sunday. It wasn’t a national event.

Right?

This was the first nationwide, network-wide contract. The networks now had a signal that people did want to behave in this way, and they could feel safe signing business deals and pursuing this because, even though it wasn’t what they expected, it turned out there was demand for this product.

Yes. So ABC signed a league-wide, 5-year TV rights deal with the American Football League for $8.5 million over 5 years. It was by far the single biggest sports-rights TV deal in history at the time.

$1.3 million to the league per year.

And that was before the league had played a single game. So here we are now in January 1960, back to the NFL. They didn’t have a commissioner. Their upstart rivals, the AFL, hadn’t played a game yet, and they had a multimillion-dollar contract.

An $8.5 million, 5-year TV deal with a national network that the NFL didn’t have. This was a real existential crisis. And unlike last time, when they were like, “Okay, great. We’ll just draft one of our own, Bert Bell, owner of the Philadelphia Eagles, to come in and lead us through this,” they couldn’t agree on a new commissioner.

So it took 11 days and 23 separate votes of the NFL ownership groups in a total knockdown, drag-out negotiation. There were multiple camps backing multiple candidates.

Yeah. The NFL had just gotten too big. Each of the owners had too many of their own interests to argue for. They were in dire need of something or someone to unify them. Indeed, by the end of the process, none of the original candidates were still in it.

Right? So, in some ways, it was a tough position to be in because all the most qualified people were out. So you kind of had to pick someone that nobody hated but probably wouldn’t be very good.

But fortunately for the NFL, they were very, very, very wrong about that.

Lucky. Better to be lucky than good.

Yes. They chose as the compromise dark-horse candidate the 33-year-old general manager of the Los Angeles Rams, former public-relations intern and Compton College graduate Pete Rozelle, to be the new young commissioner of this league in crisis.

And he created the NFL that we know today.

And it was totally brilliant. I mean, Rozelle grew into this incredible leader and visionary who did so many things for the league, for the game, for television, and for America that we’re going to enumerate now. But it was so not the owners’ intention. They had to go to this compromise candidate, this young person whom most people hadn’t heard of.

Anybody else they were considering would have been of a different generation and wouldn’t have understood the new America of the late 1950s and early 1960s.

These were all old folks who were running the league at this point in time. But Pete Rozelle, nobody better embodied everything about America in the 1950s and 1960s: young families, suburbs, the West Coast, Los Angeles, television, PR, and advertising.

Yes. Coming out of the PR background was the perfect positioning for him because he knew that every foot we have to put forward has to be really polished. We have to stop doing things that are confusing or cannibalizing each other, sending mixed messages, or perhaps putting a bad taste in Americans' mouths. We need to figure out the very best media strategy—the very best strategy to make it so all the newspapers and all the TV stations talk about us all the time. The NFL, our teams, and our players need to be on the lips of Americans as much as possible.

As GM of the Rams for only 2 or 3 years, the Rams were not a successful team on the field, even during his tenure. But he makes them into the most profitable team in the league. They actually start making a lot of money because he gets it right. They're in the second-biggest TV market in America, in Los Angeles, a very wide, geographically spread-out market where people want to watch football games on TV.

He opens up a Rams merchandise store. He partners with Roy Rogers, Inc. The actor Roy Rogers had a white-label merchandise brand to bring actual high-quality, branded Rams jerseys, hats, mugs, and so on. That becomes a huge revenue line for the Rams that nobody else has.

So, he's got the right background here, and he comes in. This is pretty crazy. This is a very volatile, charged situation with a lot of elder and opinionated folks around the league that he's going to have to deal with. Within a year, he completely changes the NFL.

The first thing he does when he comes in as commissioner is ratify an expansion plan for the NFL to meet the AFL. Remember, one of the big reasons why Hunt and the AFL owners started the league in the first place is they wanted to bring pro football to more cities. The NFL was dragging its feet. Just like back with the AAFC, now they realize they've got to go meet the enemy on the field where they are. So, the plan is to expand to both Dallas and Houston immediately to meet the AFL there in Texas.

Oh, and meet Lamar Hunt head-to-head right on his own turf. I mean, he's leading the AFL effort, and the idea is that you're just going to open up shop and say, “Hey, we're going to give away the franchise to a new owner of the Cowboys right here in your backyard.”

Yep. Right down the street. Speaking of proximity—and right down the street—the next move that Rozelle makes, remember, he's from LA, he gets the importance of media, advertising, everything. At this point, the league offices were in Philadelphia because Bert Bell was in Philadelphia, and he had been the owner of the Eagles. He's like, “Philadelphia is not the place where we can run the modern NFL.” Yes.

These are relationships we’ve got to cultivate with Madison Avenue. After he moves the headquarters to New York, Rozelle contracts with the Elias Sports Bureau, which did professional statistics for Major League Baseball. Up to this point, the NFL didn't have a professional statistics arm that would distribute game stats and box scores to all the newspapers across the country.

The only way anybody's going to write about us and give us space on the sports page is if we make their job easy and put the stats right in their hands every day. Speaking of writing about the NFL and publishing, the other thing that Rozelle knows is that, especially with a game like the NFL, which is a weekly drama, it's not just about baseball and getting the daily box scores in the newspaper; you also have to create human stories and arcs and mythology around the game.

And so he intentionally cultivates a tight relationship with Time Inc. and specifically Sports Illustrated. Over the course of the 1960s, Sports Illustrated really becomes the major advocate for the new, modern game of the NFL. So much so that, in 1963, just 3 short years later, Sports Illustrated names Pete Rozelle its Sportsman of the Year—the first-ever non-athlete it had named Sportsman of the Year. Think about that: the commissioner of the league being named Sportsman of the Year. That is just a huge mindset shift.

We should also say that at the end of the 1950s, beginning of the 1960s, baseball was still a dominant sport in the US. The dominant football franchises were college football franchises. The NFL was still an underdog, and now it was being challenged by this new upstart. So, they were sort of squeezed in the middle: people didn't care enough yet, but they also had a competitive threat. And so Rozelle was having to do some innovative things.

David, didn't he hire writers in-house at the NFL to craft the storylines and then send those to all the reporters who were too busy to actually go to NFL games because they didn't respect the NFL enough? But maybe if we send them the stories, then they'll tweak them a little bit and publish them.

Famously, he did this starting back when he was with the Rams, even when he was a PR intern there. He would just write the stories for the reporters, which, first, ensured that they would actually get in the papers, but, second, allowed him to control and craft the narrative. Man, you can totally still see this to this day in the NFL—this ethos. It was so important and strategically advantageous for them. The NFL keeps such a tight grip on the narrative, and all this starts with Rozelle.

One other thing that he does immediately after taking over and moving headquarters to New York that would end up paying huge, huge, huge dividends is he also starts cultivating political relationships and influence.

Yes. So this is a perfect lead into what happens in 1961, right after Rozelle is on the job, that would change the face of football forever. So, it's obvious to Rozelle, once the AFL signs their big deal with ABC, that that's the path forward.

Their $1.3 million-a-year deal—

—the leaguewide revenue-sharing national deal with the national network. Now, this is not how the NFL operates at this point.

Nope.

Rozelle corrals all the NFL owners and gets them to realize that the NFL has to do the same thing. They have to give up their individual TV rights. They have to pull together and fight the AFL. So finally, after wrangling and politicking with the ownership group—

And the reason there's politicking is because Cleveland, Pittsburgh, and Baltimore actually will end up losing money in the short term on this because Rozelle is pitching, “I'm going to go negotiate us a big group deal.” And they're all three saying, “We already have very good deals locally. We're very popular teams. We're in great football cities. No.” But ultimately, they do say yes. And it really speaks to the thing that has made the NFL successful, which is saying no to growing my slice of the pie to grow the greater pie.

So, Rozelle goes and negotiates with CBS, which was the dominant network both in the country and had the majority of the individual team NFL deals. He negotiates a 2-year deal with CBS at $4.65 million in rights per year, to be shared equally among the teams.

More than 3 times the AFL deal.

A huge shot across the bow to the AFL. Fortunately and unfortunately, they immediately encounter political pressure in response to this. This triggers the Department of Justice to start an antitrust-violation process against the NFL. This is a clear use of monopoly power.

Well, this is the very first question where you say, what is a monopoly, what is antitrust, and what are the NFL and the teams?

And in this situation, is the NFL the business, or are the teams the business? Right?

If the teams are the business, then yes, this is antitrust. If the NFL is the business—

No, this is one entity acting on behalf of itself. There's no collusion. There's no monopoly. Plus, in this particular situation, they actually are in a competitive landscape against the AFL. So, there's a strong argument to be made that this is not antitrust. That argument does not carry the day.

No. So pretty immediately, the courts strike down this deal, and there's about a 1- to 2-month period where it's all in limbo. This is where the Kennedy relationships come in clutch for Rozelle and the NFL. Both the president and Bobby Kennedy in Congress whip up enough support to pass new congressional legislation, specifically a new congressional act to advantage the NFL and allow for national sports contracts on a leaguewide basis.

It's called the Sports Broadcasting Act. It ends up getting passed toward the end of 1961. The day after the bill is passed and signed by John F. Kennedy, he literally hosts a party at the White House for the NFL, which just tells you everything you need to know right there. Pete Rozelle and all the owners are invited to the White House to celebrate this new antitrust exemption that has been passed through Congress to allow them to negotiate this landmark deal because the president wants to watch his football.

It's that. But Rozelle also makes the strong case that this is good for America, for a game that is growing in popularity and a game that unites communities.

They're really starting to lean into this idea that this brings a lot of people together in a city. It is a shining example of teamwork and hard work, and a shining example of celebrating sportsmanship. This is a great thing that we should spread to more of America and make it easier for more people to consume.

They're starting to make arguments about the economy around it. It's good for people to have gathering points, both at stadiums and around stadiums, with hotels for people to throw parties at their houses. All of this is goodness. If you like the American economy, you should let us have a national TV contract for the NFL.

Yep. And at this point in time, I think a lot of those arguments hold water.

Yep. This actually was driving a lot of commerce for the nation. Totally. A fun aside: I did the math on that $4.65 million-per-year deal. The value of that contract would grow 2,500× over the next 62 years.

Wow. Did you look at what it would be inflation-adjusted?

Yes. Inflation-adjusted, it's about 250×.

Still pretty good. So, on the back of this landmark TV deal, Rozelle does 2 other really brilliant things. The first comes as kind of another accident.

So, the league every year sold the rights to the NFL championship game to make a movie out of it.

And they were always kind of bland.

Yeah. They were kind of hokey, like a really rudimentary highlight reel-type thing. In 1962, they get a bid for the rights. The bidding is a sealed auction, and they get a bid that comes in from a guy named Ed Sabol, who was a suburban dad in Philadelphia who liked to make home movies, particularly of his son Steve's high-school football games.

This guy, Ed, bids on the rights to make the NFL championship movie for 1962. The bids are unsealed, and Ed had done a little homework. He found out that the company that had won the past few years only paid $2,500 for the rights, so he's like, "Well, I can bid $5,000." He wins the auction, and Rozelle's like, "Who is this guy with no experience? What's happening?"

So Rozelle goes to visit him, and Ed pitches Pete on doing something completely revolutionary for the 1962 championship. He wants to make it like an actual movie—not a hokey sports movie, but a real movie with montages, cuts, and professional Hollywood-quality cinematography.

Slow motion, voice-over—

Everything. Sideline cameras, really a passion project to make this an incredible piece of content. Rozelle's kind of like, "Well, I mean, that sounds great. I don't know if you can do it, but what have I got to lose?" So he lets Sabol go with it.

The movie he makes totally revolutionizes sports video content. I think this is another thing that we just take for granted today. It's like air and water that sports content, sports video, is not just a fixed camera at the 50-yard line that pans back and forth.

Not only does this film get great acclaim, but it's also a revolution to create recordings of sports that are not to be broadcast. The broadcasters weren't recording tapes of everything they ever broadcast, so there's a lot of baseball games and stuff that have been lost to history because there was no recording of them made.

Meanwhile, the NFL, for this championship game and for other things that Ed Sabol and his crew would film after this, has high-quality film—not videotape recording, not over-the-air broadcast, but film-stock recording—from a bunch of different angles, with some high-frame-rate cameras and some 24-frames-per-second cameras. So you get this smooth, beautiful slow motion. It provides this unbelievable archive of the game for which other sports have no archive.

Yeah. Well, that's just the video aspect of it, but there's also something that Sabol gets intuitively—the same thing that Rozelle gets: the narrative. It's not just about showing what happened. It's about telling a story. It completely meshes with Rozelle's philosophy and what's going to carry the NFL into what it becomes today. We can't just show these games. We have to tell a story. This has to be drama. This has to be made-for-TV content—

And it has to be super polished, and it has to be super controlled. Ed Sabol's little outfit that would become NFL Films is the ultimate embodiment of Rozelle's mindset.

I don't think Rozelle could have created this on his own. But when you watch anything from NFL Films, it has Pete Rozelle's personality oozing all over it in terms of what we are creating: entertainment and polish. So for 2 years, they do the championship game, and then in 1965, Ed comes to Pete with the idea of, "Hey, let's make this a core in-house division of the NFL," and they start NFL Films.

Yeah, you should buy my little film company.

What a radical idea. The NFL should become a movie producer. This is huge. Remember, there's no ESPN. There's not going to be an ESPN for 15 years. All of this content that we're just bombarded with today, it all starts here with the Sabols and with NFL Films.

Yeah. There's a couple interesting things to note, too.

Once Rozelle greenlights NFL Films, he basically says, "Okay, there's a lot of people in my organization that might want to do something with this at some point, but we want to be hands-off. I just don't want your P&L to ever go negative. You can run as a break-even business as long as you're fulfilling the mission of promoting the very best of the NFL and helping to create lore and story."

They build this completely full-fledged film studio that is actually the customer that buys the most film from Kodak, other than the U.S. Army, in the entire country. It's a super high-volume film studio because they start sending full film crews to every single NFL game every single week. It's this unbelievable operation to then overnight-mail or drive all this footage back themselves so they can start editing it right away for what we'll talk about soon, but for many purposes.

This is what's so amazing. They did all this as an investment, as a labor of love and passion on the Sabols' part. On Rozelle's part, though, the motivation, as you were saying, isn't about making money. It's about raising the stature of the league. Yes, about putting the highest-gloss sheen on the product that we are producing, and the product is the game on the field.

They couldn't even foresee how important this would become, but we'll put a slight pin on that and come back to it in just a minute.

Yeah.

The other thing that Rozelle does in the next couple of years is the merch idea, the store that he was doing back with the Rams. He brings that in-house on a league-wide basis and starts NFL Properties. Again, totally radical.

He goes to all the owners, all the teams, and says, "Whatever you're doing on merch, whatever you're doing on branded opportunities, you are no longer doing that individually. We're going to bring it centrally, collectively, in-house under NFL Properties. We're going to standardize the merch, the jerseys, the hats."

We're going to set a quality bar—

So that any time a fan—because it's all about the relationship with the fans—it's like a funnel: bring them in from TV, get them to the game, get them to buy merch. They're just deepening the relationship. They have to have a great experience. They can't get some shoddy pennant from the Giants that looks like X, and somebody else gets something from the Cardinals that looks like Y. It's got to all be the same.

And you got to remember, the way that the NFL is structured, Rozelle is not their boss. In fact, he works for the owners. So they're all making money, and he's going to them saying, "Hey, just like TV, I want you to give up the rights to make money on your own, even though some of you are doing a pretty good job at it, and we're going to do this thing as a league and we're going to cut it equally. So I don't care if your team's bad and their team's good. All the revenue is going to be equal, just like TV."

And he's so good at playing the politician with the owners that they keep agreeing to give up revenue-generating parts of their P&L for the league to take over on their behalf.

Yeah. Let's take the Browns and Packers. How many pennants do you think the Browns sold in the city of Cleveland, with the Browns being as big and storied as they are, versus the Packers in a town like Green Bay?

What is Green Bay? Something like the 200th-largest media market in the United States, and they've got this NFL team.

And what Rozelle is saying is, just like TV, I don't care how much merchandise you sell. The Packers are getting the same check from Properties as the Browns are.

Yep. We should probably take a 60-second aside, but the unique structure of the Packers is totally amazing. They are owned by a publicly owned nonprofit corporation. And so what that means is, rather than one individual who could just decide to uproot the team and leave them, the ownership of the team lies in this entity that is theoretically a publicly owned entity.

Any time they want to raise money, they go and sell more shares, more stock in the Green Bay Packers. There are hundreds of thousands of people who have bought this stock, so there's this very distributed ownership group of the Packers—

Not with any expectation of financial return, literally just so they can hold a piece of the Packers—

—or control them, because nobody can own more than a certain number of shares. But this mechanism has kept the Packers in Green Bay, even while capitalist forces and individual whims of billionaires have moved many other teams around.

Yeah, it's such an amazing little quirk. Have you ever been to Lambeau Field?

I have not. I really want to. I went once, not for a game, but I was at a wedding in Green Bay, and I was like, "Oh my gosh, I got to go see the field." And so I took a run.

Green Bay is this very quaint little town in Wisconsin, and there's this giant NFL stadium in the middle of it.

It's wild. And for a lot of the analysis we'll do later, the data comes from the Green Bay Packers annual report because no other team publishes its P&L, but the Packers do. Okay, so the last thing Pete Rozelle does on this miracle run in his first couple years as commissioner is create the Pro Football Hall of Fame in Canton in 1963.

Ah, so cool. I've never been. We have to go. We should do an Acquired field trip.

We should.

That would be fun. So there's this amazing flywheel. It really is like the Disney story: he gets the most important thing. Everything he's doing is through the lens of, how do we raise the stature of the league? Not a team, but the league—the NFL as a league. How do we add higher-gloss sheen to the product—

To the shield, one might say?

Exactly. Exactly. And his logic is, doing that will attract more fan interest and deeper fan interest. And the more and deeper fan interest that you attract, the more TV dollars you're going to make. And this is revolutionary, too. Back in the day, you were limited to the number of seats you had in your stadium. So if you're a Major League Baseball team in a major market where you're selling out your stadium, there's not a strong incentive to keep adding sheen to the product. You're at maximum revenue capacity—

Right?

But with the NFL and now with the new TV model, there is no ceiling to revenue capacity.

Yep. So more fan interest, more TV dollars, more TV dollars shared evenly among all the teams raises the level of play equally as the overall level of play goes up, as long as the competitive balance stays intact. Well, that improves the product. Yep.

Which then adds more sheen, which then drives more fan interest, and it becomes this amazing flywheel. And there's so much more to the story, but that's the core of it. That idea is what leads to what's the current annual national revenue for the NFL? Like $10 billion, $11 billion—

What comes through shared agreements is $11 billion. And then there's another $6 billion or so that comes from local revenue that teams individually generate.

Yep. That's per year—

Right?

Just to be clear, that is per year. It is this flywheel that makes the NFL teams collectively worth something like $140 billion today.

So remember that initial landmark deal that they got the antitrust exemption from Congress for in 1961, for the 1962 season? That was 2 years. The AFL is locked up for 5 years. The NFL gets to renegotiate every 2 years. Rozelle opens up the bidding to all 3 networks. Of course, CBS wins again: another 2-year, $28.2 million bid, $14.1 million per year, up from $4.6 million 2 years earlier. So every single team in the league now gets $1 million before the season even starts.

A cool 3× from the last deal he negotiated 2 years before.

Pretty freaking incredible. And it also says so much about the commerce that the NFL was driving. The TV networks were getting a great deal here. These were landmark contracts, but the attention and viewership that the games got, and then the advertising units that were sold, and then the ultimate products that were moved as a result of those ad units—this was a steal.

And you could argue that the TV networks were getting a great deal for many, many, many more years. And I think at the end I want to discuss: are they getting a good deal today? But everyone was getting a pretty good deal here because the fan base was growing so much more quickly, and the number of viewers was growing so much more quickly, than these deals could get renegotiated. Well, it just takes time for people to realize the power of a new medium.

Rozelle had an unbelievable first 5 years in office. I literally cannot imagine executing better: the NFL going from a major crisis—the death of its owner-commissioner, Bert Bell—to the place it's in in the mid-1960s. Incredible.

What about the AFL? What happened to them? They're doing pretty great, too. They're thriving, and it's all because of television. Even though the NFL is doing great, there's still a lot of demand for football on TV. And the AFL, to put a finer point on what you're saying, had a shoot-the-moon strategy. They wanted to come out of the gate with a bang. They wanted to burn real hot and, under the right circumstances, have that go really well for them. And they had the exact right circumstances: it was the boom of TV in America. So they could do things like sign Joe Namath for the Jets to a gigantic contract and have New York and half of America fall in love with him and turn him into a superstar that benefited the league.

The Jets in the AFL, formerly the Titans, are owned by Sonny Werblin. He was one of the co-heads of MCA, the big agency—

As discussed on our interview with Michael Ovitz.

Indeed. Indeed. So, just like Rozelle gets what's going on in the NFL, Sonny is the media guy for the AFL, and he totally gets it, too. So Sonny sees the big second NFL deal come across in 1964. All the other AFL owners are despairing. The NFL just got this huge deal. How are we ever going to compete? They're going to have so much more money. We'll never be able to sign any players. This is the end.

Sonny's like, "Oh, no, no, no. We're going to be just fine. We're going to be great because the NFL did this deal with CBS." Well, there are 2 other networks out there. There's ABC, which the AFL has its current deal with, and then there's also NBC. And so there are 2 bidders out there who are going to be very, very, very sad that they just lost out on the most compelling content on television, professional football. And who's there to give it to them? The AFL.

Yep. We'll take second place when there's a bunch of sad people willing to throw money at second place.

And throw a lot of money. So the very next week after Rozelle and CBS announce their deal, the AFL and NBC announce that they've just signed a new 5-year, $37.5 million deal. So a bigger overall dollar number for a longer number of years, even though it's less than half the per-year amount.

Yeah, it's $7.5 million per year, but by this point in time, the NFL has 14 teams. The AFL still only has 8. So on a per-team basis, it's pretty close.

For a 5-year-old upstart league, this is a big success. So just like you were saying, right on the heels of that, Sonny and the Jets know what to do with that money. They turn around and give a huge chunk of it to Broadway Joe Namath. And probably a lot of listeners are going to know the name Joe Namath.

Honestly, I only knew it because I saw him on a Brady Bunch episode. It's this cultural touchpoint where Joe Namath was so big that he actually appeared on a Brady Bunch episode. And that's super unusual for a sports star in that day.

Dude, I mean, he had his own talk show. It's not just that he was on the Brady Bunch. So everything we were talking about a minute ago with NFL Films and Rozelle and all the brilliance there, and how it was so important, and this realization that football and the NFL would be made for TV—Joe Namath was the first modern cultural celebrity athlete.

He's also a heartthrob. There are millions of teenage women in America throwing themselves at him.

That's exactly what I was going to say. He was the first professional athlete who appealed equally to men, women, and children.

That's a great point.

So he comes and he's playing in New York, right, in the biggest market, the brightest lights, right there with the TV industry, right there with the advertising industry. He knew exactly how to play it. He wore white cleats. Everybody else wore black high-tops. Famously, he wore a mink coat on the sidelines. Just amazing, amazing. He starred in movies in the offseason. Broadway Joe was it.

Well, continuing that thread from earlier, when I was talking about how CBS had this hole in their schedule and everyone was skeptical that sports would fill it, everyone thought sports were a very male thing, and especially a brutish sport like football. They didn't think it would do well, certainly not in prime time, but not even in the Sunday afternoon slot because it's just going to attract the husbands to come and watch it. And it doesn't have a family appeal. Joe Namath is the first big example where everyone realized, oh, football totally can be for everyone.

Yep.

So the Namath signing is the first big post-TV-money contract signing in the AFL-NFL war, but it starts a whole wave of competition between the 2 leagues to go sign all the college superstars coming out. So it gets pretty crazy. At 1 point, the NFL starts what they refer to as a babysitting program. This is literally a kidnapping program where they will send agents to top college athletes who are seniors about to graduate and literally keep them out of the hands of AFL teams, not allow them to sign contracts, and pressure them into signing with the NFL first. They just put them up in hotel rooms, and then they don't tell anyone where they took them. So nobody can tell the AFL team rep, “This is where you can find the star.” It's just like, “You got him captive till you sign him.”

The interesting thing, too, is that the leagues aren't respecting each other's drafts. It doesn't matter if you draft someone in your league; I'm signing him to a contract in mine, and that contract is valid in the United States. I don't care what your draft says.

This is the battlefront. It's with rookies and the draft. What they don't do yet is start signing each other's players. That's like hitting the nuclear-button option.

Right?

So they're keeping this to rookies, but pretty quickly, contracts for rookies get into the close-to-$1 million range, which is way more than the veterans are making. It starts causing all these problems. By the beginning of 1966, the owners' group in the NFL realizes that the AFL isn't going away and this is not going to be like last time. They're going to have to play ball with these guys, literally.

It begins a super-delicate dance: they're sworn enemies, but some owners see the writing on the wall very early and say, “We're going to have to combine these. It's probably not actually legal for us to combine them, but we're going to kill each other if we both keep going. So what do we do?” And so it begins this multi-tiered negotiation where certain people at the top don't know they're negotiating. Meanwhile, certain owners are forming side deals with other people who own teams in the other league. It's this fascinating spy game.

Oh, this is so fun. What happens next is like a Godfather film. A few of the most influential owners come to Rozelle in 1966 and they say, “The way things are going with the AFL, we're not going to beat them. This draft situation with the rookies is out of control. The contracts we're paying—we're losing too much money. This is going to kill the league if we keep the war going. We've got to get to a truce, which means we're going to have to merge. So we're going to direct you, Rozelle, to go start merger negotiations with the AFL.”

Rozelle doesn't want to do it. He thinks they can win. He wants to fight, but he's like, “Okay, I work for you.” One of his superpowers, the way he's able to achieve all of this, is that he really is good at pleasing everybody, finding solutions that work for everyone. And so he says, “Okay, I'll move forward.”

So he drafts the Cowboys GM in Dallas, a guy named Tex Schramm, to secretly open negotiations with Lamar Hunt. Lamar, at this point, has moved the Texans to Kansas City, where they become the Chiefs.

Also, how great is it that the first Cowboys owner is named Tex?

I know. So great. He was the GM. I don't think he was the principal owner, but I think he had an ownership stake. So Tex approaches Lamar in early 1966 and says, “Hey, I'm the emissary of the NFL. You know, Rozelle sent me. I'm here to talk merger, but we've got to keep this under wraps, because if word gets out, then all hell's going to break loose.”

So they start working and discussing things. There are no notes. There's no written notes. It's just them chatting with each other for a couple of months. The other owners don't know about it.

Which is hard, because when you're not the designated representative, you can't say, “I'm coming to you with something I know will work.” You're saying, “Hey, enemy, I know you can't know for sure that I can get this done, but you have to trust me enough that I'm pretty sure I know my fellow owners well enough that they would agree to this. So if you and I can get close to agreeing to something, then I can take it to them. But this is all subject to them blowing it up.”

Yes. Very delicate situation. And especially as the war and the TV money start escalating between the leagues, the AFL owners decide, “We need somebody who's going to kick some ass for us.” They draft a fellow owner, head coach, and GM of the Oakland Raiders, Al Davis, to become the new commissioner of the AFL.

All right. So now we've got this cast of characters to pay attention to. On the NFL side, there's the commissioner, Pete Rozelle, and Dallas Cowboys GM Tex Schramm. And on the AFL side, there's the new commissioner and Raiders owner, Al Davis, and the Chiefs owner, Lamar Hunt. And Lamar Hunt, of course, was the guy who started the whole AFL in the first place.

And Al Davis—legendary. There's a quote about him in America's Game: “Outside of Oakland, it was not certain where Al Davis would finish in a popularity contest among sharks, the mumps, the income tax, and himself. If the voters were the other American Football League coaches, Davis would probably be third, edging out the income tax in a thriller.”

You can't trust Al Davis any further than you can throw him, and he is the perfect new head of the AFL in this war.

And basically, the job is just to go beat them up in negotiations. At this point, it's like, “Hey, we understand we're in a negotiation. Just go get the best deal you can. And if you have to piss everyone off such that you have no working relationship with the rest of the owners, Al Davis is the kind of guy who's like, ‘Oh, I'm totally up for that. That's fine if, for the next 30 years, everyone that I have to work with hates me.’”

They don't let him know about the merger negotiations. They don't actually want him to negotiate. They just want him to start a war and improve their negotiating leverage.

I see.

In literally one of the most incredible unforced errors of all time, the NFL fires the first shot in the new war as soon as Davis takes over. In May 1966, the Giants in the NFL break the gentleman's agreement. They go over and poach a veteran from the Bills in the AFL—a kicker. Literally a kicker. They start a war over a kicker.

And it makes sense. It's the Giants, because they're the most harmed here. They have, in their own city, the Jets with Joe Namath.

Once this happens, though, the other NFL owners are just apoplectic at Giants owner Wellington Mara. They're like, “You're throwing this all away over a kicker.” The owner of the Colts said, quote, “God damn it, Mara. If you wanted a kicker, why didn't you just ask me? I'd have given you one.”

So any of the 30 million Americans who play fantasy football can relate to this situation.

So Davis gets the news that the gentleman's agreement has been broken and the kicker has been signed—the kicker signing heard around the world—while he happens to be literally in the middle of meeting with the Bills' owner, supposedly. Davis just sits there in his chair, leans back, and smiles. He says, “Well, we just got our merger.”

The Bills' owner is like, “What are you talking about?” And Davis says, “Because now we're going to go out and sign all of their players, and we will destroy them, and they will come begging to the table.”

Some Dr. Evil right there.

Totally. That night, The New York Times asks Davis for his comment on all this, which, by the way, you couldn't design better drama, especially during the NFL offseason to keep America interested in football. Amazing.

The New York Times asks Davis to comment, and he responds, quote, “This is something I've been aware of and I anticipated the probability, but you don't make threats at a time like this. Our answer will be an action. This is not the time to speak.”

Ooh, I want to steal that word for word for something in the future.

So his first reaction is that he doesn't really want to go into all-out war, because he knows that's going to end badly for both sides. He wants to send a targeted message, like the equivalent of a fish wrapped and delivered on the doorstep—

—or a horse's head in your bed.

Exactly. The horse's head that he decides to send is to target Rozelle's old team, the Rams, and sign their quarterback away.

We just went from a kicker to a quarterback. That escalated quickly.

Well, you're going to send a message. You're going to come at the king. You best not miss.

Yes.

So within 3 days, the Raiders have signed away the Rams' veteran star quarterback, Roman Gabriel. And the NFL makes another tactical error: they don't respond to that. They don't come to the table. So a few days after that, Davis does unleash all-out war.

Talk about antitrust violations. He directs the GMs of all the AFL teams to go out and sign all of the quarterbacks in the NFL. Doing this is an economically negative move—

Of course, which is why he didn't want to do that. They're already making the maximum amount you should be willing to pay them for what they're bringing to your team, or likely close to it—

—and you're going to have to pay them a lot more to switch leagues.

So Lamar Hunt, of course, gets word of what's going on. Meanwhile, he's in secret negotiations with Tex Schramm and Rozelle for a merger, and Hunt gets word from the Oilers' GM that Davis just instructed him to go sign the 49ers' quarterback. Hunt is talking to the Oilers, like, “No, no, no, this is too far. Stand down. I'm canceling Davis's orders. Don't go do this.”

The Oilers' GM gets off the phone with Hunt, calls up Al Davis, and says, “Hey, Lamar just called me. He heard about what we're doing. He told me to stop.” Davis supposedly sits there for a second and asks, “Did you give Lamar your word that you wouldn't do it?” The Oilers' GM says, “Yes.” Davis sits there again, thinks about it, and says, “Fuck it. Sign him anyway.” So they do. The Oilers go sign the 49ers' quarterback, and that is what makes it all work.

Right? I'm not being incendiary against you. This is a weapon for you.

Yes, I may be a thug, but I am your thug in this case. So within a couple days, it's all over. On Wednesday, June 8, 1966, the merger agreement gets announced in a press release. Unlike with the AFC, this is a true merger. All of the AFL teams will join all of the NFL teams.

Together, they promise to add at least 4 totally new teams and cities.

Right. So there are 24 combined teams, and they promise to expand to 28 over the next 3 or 4 years.

Yep. They announce that because of the separate TV contracts on the AFL and NFL sides, they will not begin a joint season immediately. They'll let the new AFL TV contract play out, which will go through the 1969 season. The first fully combined season will be in 1970, but in the interim, they will start hosting a new professional football world championship game between the winners of the 2 leagues, starting in the 1966 season. Boy, that would be a super event for television.

This officially called the AFL-NFL World Championship Game sounds like a doozy. Sounds pretty cool to watch.

Some other points to the deal: There will be a single common college draft starting immediately. No more of these separate drafts. No more babysitting. No more ridiculous contracts, which the players hate, of course. Rozelle will remain the commissioner, and Al Davis is going to go back to running the Raiders, which Davis is fine with. That's all he really wanted.

Anyway, not announced but included—I believe this only came out much later—the AFL franchises did collectively pay the NFL owners $18 million to join the league.

Over a 20-year period.

Yes. This, though, was an enormous victory for the AFL for 2 reasons. One, the NFL obviously had the larger TV contracts, so that's just found money right there. Two, they had all the apparatus. They had NFL Films, NFL Enterprises, everything.

And by the way, immediately, even before they combined the leagues officially in 1970, they formed AFL Films for that 3-year period. I didn't know that. NFL Films hired twice as many people, and they went to film every single AFL game, too, starting immediately.

So those are both, in themselves, huge reasons why paying only $18 million was a win for the AFL. The even bigger reason: When the negotiations started between Schramm and Lamar, the NFL's initial asking price was $50 million per team from the AFL as franchise fees. So to go from $50 million per team to $18 million total, paid over 20 years, all thanks to Al Davis—the AFL owners owed Al Davis a big glass of champagne, shall we say.

That's an incredible leverage shift over the course of the negotiations.

And it happened in a couple months.

Yeah. There are some other interesting deal points, too. One of them is that the $18 million actually didn't go to all the NFL teams. It went to the Giants and the 49ers because those were the 2 teams most affected by now having another NFL team in their city.

Interesting. That makes a lot of sense.

Because the existence of this merger now causes one of the league ownership rules to be in violation: No 2 teams can be in the same media market. Well, we now have a problem, and we need to compensate you for that. I think the Giants actually got more because Joe Namath was the other one in their city.

What you also start to see because of this deal is the real modernization of the NFL. They decided that anyone with less than a 50,000-seat stadium needed to change that. They said that for what football had become after this merger—the modern NFL in America—that's not a suitable place to play football anymore. So you either need to build a new stadium or expand your stadium.

The other final thing that is a consolation prize for the AFL is that they actually got to bring their records over, whereas the AAFC—I don't think they did. I don't think those counted as NFL records. I did find this; it's linked in the show notes and our sources. I kept reading about the NFL records and the NFL record book, and I was like, does this exist, or is this theoretical? Every year, the NFL publishes a 1,000-page PDF of all of the historical everything—all the scores, all the games.

Oh, that's awesome.

It being in PDF form makes it pretty useless, but I assume it's a PDF of a physical book that exists with all the records in it. So this announcement in June of ’66, you'd think, okay, this now just clears the way. The next few decades are just laid out in front of us. There's 1 league. There's no real competitors. What could possibly challenge football?

The answer is, yet again, the law of the land in the United States. So in October, Congress actually passed a law to allow this merger and grant yet another antitrust exemption. This time, Lyndon Johnson signed it into law. You might say, well, why did they need another one? The merger of 2 completely different organizations that were competitors is a different thing than allowing 1 ownership group or 1 trade organization to negotiate on behalf of a bunch of member teams. So this actually is a different antitrust issue.

Right? It's an actual monopoly versus collusion. The first one was collusion, right? This is creating a monopoly. And so Rozelle and the NFL are calling on all the favors they can get, but the bill that will allow them to do this is stuck in committee.

So here's the paragraph out of America’s Game:

“Rozelle, seeking a way to break the logjam, called his friend David Dixon to see if he knew a North Louisiana congressman on the committee. ‘For someone as sophisticated as Pete, he was rather naive when it came to politics,’ said Dixon. And so he eventually finds his way to House Majority Leader Hale Boggs, who was an old fraternity brother of Dixon at Tulane, and he said, ‘I can find the votes for this.’”

I'm going to quote this again:

“Walking up the stairs of the rotunda when the vote looked like a sure thing, Rozelle was ever his usual humble self. ‘Congressman Boggs, I don't know how I can ever thank you enough for this. This is a terrific thing you've done.’ ‘What do you mean, you don't know how to thank me?’ he said. ‘New Orleans gets an immediate franchise in the NFL.’ And Rozelle says, ‘I'm going to do everything I can to make that happen.’”

At that, Boggs stopped and turned on his heels, heading back into the committee room. Rozelle took 2 giant strides after Boggs, turned him around gently, and said, “It's a deal, Congressman. You'll get your franchise.”

Amazing. It's like: How many presidents and how many congressmen? The NFL requires this perfect storm of postwar America, technology, the growth of television, all these innovations, all this flywheel, and also the repeated cooperation of the U.S. government.

So once this passes Congress and the merger is approved—remember, it won't actually happen until 1970—there's this little matter of the World Championship Game. This Super Bowl matter. There had never been anything like this before. This is the wholesale invention of a new major sporting event for the first time within the TV era. Nothing like this had ever happened. The World Series was created way before the TV era.

Totally. And you mentioned before, during the Johnny Unitas game—the Greatest Game Ever Played—that it drew 40 million people, and that was much earlier in the TV-ification of America. It wasn't really the NFL that we know. There were all these other teams and all these other markets. So if we can tailor-make a game for national television as this entertainment event, it can be much, much more significant.

Not only that, these guys are smart. They're smart businesspeople. They're smart media people. Even though the TV contracts are already in place on the NFL and AFL sides for their respective seasons, including their respective championship games, this is a new game. There's no contract in place yet for this. So they rebid the rights to this World Championship Game to all the networks.

CBS and NBC are livid because they've already got the rights to the respective leagues. They thought they both had a championship game, but it turns out they both had a semifinal.

So what ends up happening is that they both feel like they can't bear not to win the rights to broadcast this new game. They each end up paying $1 million for the rights to broadcast it. This game is now going to be broadcast to the nation on both CBS and NBC. In addition to each spending $1 million for the rights to this 1 game, they also both pledge to spend $1 million each promoting it in the lead-up to the game.

Wow.

This is unprecedented. There's never been anything like this in media history.

This ended up actually having a 79% share of American television, whatever Nielsen measures. So, it's the share of all the TVs that were turned on at that point because it was on 2 networks.

Incredible. It ended up being watched live by over 65 million people. Super Bowl I at the L.A. Coliseum.

You can't call it that, David. This is the AFL-NFL World Championship Game.

I apologize. The World Championship Game at the L.A. Coliseum. In such a perfect symbol of the new world order and the new media landscape, the largest television event in history was unprecedented and groundbreaking, live in the stadium.

The L.A. Coliseum is pretty big. It seats about 95,000 people. Only 63,000 people showed up live. There was only two-thirds attendance.

Live at the game, and it didn't matter at all.

When I tweeted about Super Bowl I, some pictures from it the other day, I didn't realize you could see that there was an area of the stands where people weren't sitting. I assumed it was either too late or too early. That's during the game. They didn't fill it.

That's during the game.

Wow.

They didn't fill the stadium, and everybody got rich anyway.

Okay, so a few things leading up to this again. God, they're so good. Rozelle—they're just architecting all of this live. They know this is an incredible opportunity. Nothing has ever happened like this before during the age of television. They're creating a television event whole cloth, so they totally lean into it.

Media Week—that is a deliberate invention by Pete Rozelle and the NFL leading up to the Super Bowl. All the crazy interviews, everything that happens that we take for granted right now, that was intentional. It was designed. It was created that way.

The commissioner's press conference on the Friday before the Super Bowl is about league business. So, there's all this news that comes out about the NFL and how it will be changing for the next year, right before the Super Bowl, to draw all this attention to the NFL right before the Super Bowl.

And that's just the public-facing stuff. During the week leading up to the Super Bowl, they host parties, events, concerts, and experiences—not for the public, but for their partners, the television partners, the advertisers, and the press. It's all about adding the gloss and sheen to the people who are going to add the gloss and sheen.

Literally, Rozelle's directive to the NFL staff was that he wanted every media person and partner leaving the Super Bowl to be saying, “Man, this is a lot better than the World Series.”

It's great.

So great. The game itself, the Packers ended up destroying the Chiefs. The next year, in Super Bowl II, the Packers again beat down the Raiders.

It is worth saying: Wow, the dominance of the Packers right around this time. Vince Lombardi winning the first 2 Super Bowls.

There's a reason it's called the Lombardi Trophy now. It wasn't for Super Bowl I or II. And then there's the one game we will talk about here: Super Bowl III.

Yes. By this point, the game is formally called the Super Bowl. The press had been looking for something to call it. Lamar Hunt, I think, had been the one who observed his kid playing with a Wham-O Super Ball. When the league discussions were going on about it, he proposed “Super Bowl,” but Pete Rozelle hated it.

I think Lamar was like, “Oh, it's just kind of a funny placeholder name.”

But it came out in some press interview, and then they just ran with it. It was out of the league's control.

Yep. All right. So, Super Bowl III: The narrative leading into the Super Bowl is that the old NFL, soon-to-be NFC, teams—that's real football.

That's real football.

The AFL, you know, it's fluff. And there's real bad blood between the coaches and the players on the field. Super Bowl III: the Colts versus the Jets. The old Colts, Johnny Unitas, a different era—the 1950s—against Broadway Joe Namath and the Jets.

And this is still the Baltimore Colts, right?

Baltimore Colts. Yes. In the lead-up to the game, the Colts are 19-point favorites. Nobody thinks the AFL can compete. They've been destroyed the last 2 years.

Then, during Media Week—this is the reason we're talking about this sporting event here in the midst of this business podcast—it's like, “Oh my gosh, you can't design this any better.” Broadway Joe guarantees an AFL victory during Media Week, during a press conference. You can't make for better TV drama than that.

There is this very famous photograph that we'll link to in the show notes of Broadway Joe at the pool during Media Week with a playbook in his lap. He's in his swim trunks, and he's the sex symbol. There are all these press cameras and all these women gathered around him, staring at him. It was a moment that was all over the news and all over television all week. What an incredible media event.

Then, during the game, Joe delivers on his guarantee. Huge upset: He beats the Colts, the first AFL victory over the NFL.

At the after-party, Carroll Rosenbloom, the Colts owner, is totally desolate, and he comes up to Rozelle. He's sobbing. Rozelle says, “Oh, no, no, don't worry. This is the best thing that has ever happened to the game and to us.”

He's so right. That seems like one of the obvious playbook themes here: Every time you think you just got beat by some other football team or entity or personality, it ends up being so good to raise the profile for the game that everybody wins. It turns out the answer is, most of the time, everybody just keeps winning.

Yep. As long as there is drama, as long as there is competition, everybody wins.

Yep. I mean, this is the great paradox of the NFL. Everything is about the game on the field, and nothing is about the game on the field. What it is about is making sure the game on the field is compelling. Whoever wins, they all win.

And this is kind of the debate today between the new group of owners and the old group of owners. The original owners are so steadfast in saying, “This is about football, and we make a great entertainment product, but there's football at the core.”

The thing that they're all a little bit nervous about with the new group of owners, who are so excited about building these unbelievable businesses and taking on more and more sponsorships—sponsoring team jerseys, on-field sponsorships, and building the spectacle around every game—asking, “What if we had a Super Bowl halftime show at every game?” It's like, are we not a football product anymore? Are we some kind of entertainment franchise that has lost its way? I think that's the interesting dichotomy between owners these days.

Yeah. How far is too far?

But at this point in time, they are nowhere near too far. Lean way into it.

The next year, the Chiefs beat the Vikings, and the pre-merger Super Bowl series ends tied 2–2: 2 victories for the NFL, 2 victories for the AFL. Again, it could not be better for pro football and the newly combined NFL because that leads right into the first joint, fully integrated TV negotiations for the 1970 season.

This feels like it's going to be a big package.

Oh boy, are the networks going to have to pay up. And pay up they do. They decide to keep both CBS and NBC, essentially with their same packages: CBS airing the NFC games and NBC airing the AFC games.

The combined contract value is now a 4-year contract of $156 million. That is $40 million per year. That's a lot of money.

And this is where the genius starts: the NFL realizing that we don't have to just sign one contract. For anybody who's looked at the contracts today, there are a lot of contracts, and there's pretty much not a TV distribution company that isn't distributing some little shard of what the NFL has carved up.

But them realizing here in 1970, we don't just have one deal to sign. We have an AFC package and an NFC package.

And we might actually be able to invent some more here, too.

So David, take us to Monday night.

Oh, let's go to Monday night. So they got CBS, they've got NBC. Remember ABC? ABC's been out in the cold for several years now.

Which is a real shame because you've got Roone Arledge there. He's a visionary. This is still before ESPN, right?

Still before ESPN. Well before ESPN—10 years. So, yeah, that's still far off in the future, but ABC is clearly interested in sports.

Yes, clearly interested in something. So Rozelle and Arledge start chatting. Rozelle has always had the inkling that football and the NFL would do really well in a prime-time slot, but this is crazy. Like you were talking about a little while ago, Sundays were perfect for football, Sunday afternoons, because the networks didn't have anything else to air.

The accepted thinking at the time was, "Oh, sports are perfect for Sunday afternoons." But the core business of the television networks—

Right? Sports is not prime time—

—is showing shows and news and entertainment, and that is not sports.

That appeals to the widest range of people, and we still don't know for sure that the NFL is that. It's very telling that all of these networks had separate sports divisions, and that ABC didn't even have one until they got the first AFL deal. It was a separate thing.

And just to keep tracking our baseball-versus-football comparison, this moment in 1970 is right around the time when the NFL is eclipsing baseball to become America's favorite sport. It's been slowly gaining ground over the last 30 years. The merger plus the creation of the Super Bowl really puts the NFL here squarely in the lead, making it the perfect candidate for this sports-prime-time experiment. Indeed. So Rozelle and Arledge are like, "Yeah, I think this can work."

So they brainstorm and together come up with the idea for 1 single game every week with incredibly high production values, broadcast in prime time in the evening on Monday nights after the full slate has concluded on Sunday. And oh my gosh, so many advantages to this. On the Sunday games, there have always been so many games that happen on Sunday. You can't watch them all at once; they're all happening concurrently. You're seeing different games in different markets.

There's not a national event to watch because the way the local affiliate works, it's still at this point in time that you can't watch a home game at home. So whatever is on TV in your city is wherever your team is playing if they're playing an away game, and there's no NFL on Sunday if your team is playing a home game. Either you're going to the NFL game on Sunday, or it's a non-event for you that week.

Right? And that's on the viewer side. From the production standpoint for CBS and NBC, they're each sending 5, 6, or 7 TV crews out all across the country. Their resources are getting totally diluted every Sunday. They can't put all their effort into 1 prime-time game.

The broadcasts, other than the Super Bowl—and honestly, even kind of the Super Bowl at this point in time—are pretty bad. We talked earlier about how they got better and they learned. They didn't learn much. They were still referred to around this period of time, 1970, as "football in a cathedral." You had no fun camera angles. You probably had 3, maybe 4 cameras in the entire broadcast. Most of it really is just that 50-yard camera that sort of zooms in and out. And the announcers are kind of relying on the fact that you're watching the game, so they're not really commentating that much. They would just sort of help you know that there's audio associated with the broadcast you're watching.

Yeah. Step back and think about the last NFL game you watched. The transitions between the camera angles, the music, the sound effects, the microphones, the analysis, the sideline reporting—

—the lower thirds—

—the graphics. None of this existed.

The notion that there's play-by-play and color, this idea that there should always be someone talking, saying something interesting while you're watching a game. Yes. So this whole vision for Monday Night Football that Roone Arledge can make happen for the NFL, and new media rights for the NFL to sell for more revenue—they've got it all ironed out, all the details.

Right before they're about to sign a deal, Rozelle's like, "Oh yeah, by the way, we have these partnerships with CBS and NBC. We've got to offer this to our partners first." Which—

You know, Rozelle—

Brutal.

He has this reputation, and history treats him as an incredibly kind, incredibly accommodating person, and I'm sure that's true. But he had a little bit of Al Davis in him, too. He knew exactly what he was doing here. He knew that there was no way that NBC and CBS were going to take this package.

Yep. He just wanted a stalking horse. He's like, "I don't want to leave any money on the table with whatever we're signing here. They have to fear that we're going to walk."

Totally. Roone, of course, freaks out. This is his baby. This is his career within ABC.

He's been pre-selling this to his bosses, so he looks bad if they lose this now.

So they come in with an over-the-top deal. ABC gets exclusive rights to Monday Night Football for a new deal, a new product: $8.5 million per season.

And the other deal was—

The other deal was $40 million per season for essentially 15× more content, I think.

Right. Each TV network is paying about $20 million to have either the AFC package or the NFC package on Sundays. ABC is coming in and now spending $8.5 million just for 1 game on Monday nights. And you might say, "Whoa, that's terrible. They're way overpaying for the amount of content that it is." But actually, what you want to be paying for is the smallest amount of content possible that gets distributed to the widest audience possible.

So you actually should be willing to pay up to $20 million as long as the aggregate number of viewers that you get on that day is the same. Because if I'm ABC, I'm like, "Wow, that really sucks for them having to produce 4, 5, 6 different games. I only have to produce 1." And it's nationally broadcast across all my affiliates. This is amazing. We are going to go hard on costs on the production side to make it the most dazzling possible experience.

And we're going to make it back. Boy, did they ever. The first Monday Night Football game that airs that season is watched by 60 million U.S. households. That is like Super Bowl level. I mean, Super Bowl I was 65 million.

They invented a holiday out of nowhere, and it's every week.

They totally invented a weekly holiday. It's amazing. CBS and NBC must have been pissed. Seriously, because they also signed the contract thinking, "Between the 2 of us, we basically have a lock on all the football," and then they invented more football.

Exactly. And for the NFL, they invented more football. They invented revenue. Amazing.

And by this point, the NFL's starting to wake up to this idea that they're still not willing to play with the blackouts at all, but maybe people watching on TV can be better than people coming into the stadiums. Maybe there's enough money in this for us to be nationally broadcast on a Monday night. I still think it was blacked out in the home market, but they recognized the value of everyone else watching and how that's even more important than the stadium itself.

Okay, so I made a list of things that Monday Night Football invented that were not a part of your typical NFL broadcast before Monday Night Football, and it is astonishing. This is everything that you expect in every NFL—and frankly, every college—game that you watch now, and it was brand new for Monday Night Football. In fact, it was Monday Night Football-exclusive for 20 or 30 years in a lot of cases.

But the overriding idea is that we are going to cover a football game like show business. This is not a sport we're broadcasting. This is showbiz, and we will make you feel like that. So what are we going to do? We're going to put cameras at field level. We're going to put cameras on people's shoulders, and they're actually going to get to run around and get up-close footage of people while they're celebrating touchdown dances or when they're running back in from the sideline.

We're going to put cameras on the 20-yard lines in addition to the 50-yard line so that we can get a straight-down view when they're in the red zone. It's not just this weird, from-the-side angle on touchdowns; we're going to get great footage head-on during touchdowns. Instead of 2 commentators, we're going to have a 3-man booth, and there's going to be real action-oriented commentary there.

And of course, we can't talk about Monday Night Football without Howard Cosell and his unbelievably unique style of narrating and really injecting himself into the story of the broadcast, rather than just being a sort of opinionless third-party observer. He created a little bit of a foil to play off of for the other commentators, where there was a real relationship, and you were tuning in not just to watch whatever the football was, but to watch these announcers who you sort of got to know over time and really observe their charisma with each other about the game.

That's exactly what I was going to say. It's the same dynamic with podcasts now. It's like they became your friends in the booth.

Right? It's not just that you're listening to business stories. It's that you're hanging out with David and me while we talk about business stories. It's one of the first examples ever of realizing the power of that. They went from the 4 cameras that typically would cover a Sunday broadcast to 9 cameras and then eventually up to 17 cameras.

They invented the parabolic microphone coverage that you always see on the sideline, those sorts of clear plastic microphones aimed at gathering the sound from on the field. They had 40 engineers. They had 20 production people. They invented these split screens so you could watch 2 cameras concurrently cover the game. They had on-field interviews and shots of cheerleaders to add a little bit of sex appeal to the game for the first time.

They also used green screens, which are so funny to watch in some of these early broadcasts. I guess they didn't have room in the booth, according to the Peyton's Places ESPN video that we watched about this. For the 3-man booth, they needed more space than they had in the press box, so they ended up putting them out in the hallway and built a little custom room to do this in, but the background wasn't good. So they put in a green screen, and then they would put another camera in the press box and superimpose it so the field was right behind them, but it actually wasn't. It's so obvious watching it today.

They're like floating on the stadium. It's hilarious.

Yes.

But this is revolutionary stuff.

Yes. And there was one other really big innovation. This was a thing that would go on to be the predecessor for ESPN as a network and for SportsCenter as a program. It would create billions and billions of dollars of enterprise value, and that is replays.

Yeah, the highlights. Before we talk about highlights, did you say the theme song too?

No.

Yeah. I thought that's where you were going with ESPN. I mean, there were no theme songs before this, right?

Right? This notion that you're actually tuning into a program that has an associated pump-up song built for that franchise is unique.

Okay, so let's talk about highlights. How could you have possibly watched highlights before Monday Night Football? The games were on Sundays, and that was really the only football that was on all week. We didn't have the internet, there wasn't ESPN, there wasn't SportsCenter, so there really was no place to go and watch highlights.

Now, football and all sports are unbelievably highlightable events. If you string together a bunch of the very best plays, it's really, really interesting and really entertaining, especially if they're covered by great cameras. Compare this to baseball, where not only was there no place to go watch them, but there was no one capturing the footage to even highlight it. But the NFL has NFL Films.

Using high-quality cameras and film stock, they are capturing great camera angles of every game. Between Sunday and Monday, the NFL Films team would go and take all of the footage from the game the previous day, cut up a highlight reel, and as soon as possible get that to whatever city the Monday Night Football broadcast was happening in so they could play it at halftime.

Howard Cosell could give his commentary, often having never seen the footage while the highlight reel was playing in the background, and really invents this idea of, for the first time, we're going to watch highlights of yesterday's games.

I've got to imagine the highlight reel was literally being slid into the machine as they were getting ready to broadcast it. Think about the logistics in that. You get the film stock back from all the games all around the country to NFL Films. They produce the highlight reel. They get that finished reel back to the Monday Night Football location, which is another location somewhere around the country.

Totally.

All within 24 hours.

It's really amazing. God, I can't believe we're only up to 1970.

I know. Well, you can't get any better from this. I mean, this is now the fully formed entertainment product of the NFL. They add stuff like Sunday Ticket and Thursday Night Football and everything else over the years, but the trajectory is set.

There are some ups and downs in the '70s, but it's basically just gonzo for the NFL. There's one more presidential intervention in 1973. Nixon really likes watching the Redskins, but he's sick of taking the helicopter to Camp David to watch their away games, which he actually was doing, which is unbelievable.

He was a nut. Nixon literally phoned in a play for a Redskins playoff game from the White House. Maybe he should have been paying more attention to foreign policy and things like that, but Camp David is 75 miles away.

There was this whole cottage industry that sprouted up of hotels that were outside of the 75-mile radius, and there were buses. People would go to these hotels and get rooms for the day to go watch the games. This dynamic formed plot lines on sitcoms in the '70s and the '80s.

So Nixon calls Pete Rozelle personally—the president, the sitting president of the United States—and says, "Hey, we're in the playoffs this year. I think it would be a good idea for you to air playoff games, not every game, but playoff games locally."

Pete Rozelle, even in 1973, is pretty dug in on this issue, that it's a bad thing and it's cannibalizing our most important thing, our gate revenue, if we do that. So he says no to the sitting president. Then Nixon goes to Congress and says, "Will you please draft legislation?" which became known as the blackout ban.

Because Rozelle denied the president, there is actually legislation that was passed in order to force the NFL's hand in broadcasting away games locally. This is one of the things that Rozelle got super wrong. The right thing was, as soon as possible, for the NFL to get as much distribution as possible, because the TV rights would become the most important revenue line.

But the thing that most fueled the flywheel was that more people watching the games is better for everything, for continued fandom. It's like how Disney wants you to consume the content so that you go to the parks and buy the merch. So it was one of his few strategic flaws, I think, gating the content for too long.

Yep. And I don't know if this is directly related, but I think so much of the '70s, the '80s, and the '90s were also about the continued growth trajectory of the incredible marriage of the NFL and television. The money just keeps getting bigger, the stage keeps getting larger, the viewership goes up, and all the things.

Yeah. And this is probably worth saying: We aren't going to go blow by blow on the NFL timeline past 1970 the way we did during the Rozelle era. There's a bunch of stuff to skip, like the USFL, all the teams moving cities, and Deflategate, to focus really on the strategic moments that created the conditions of the NFL's business today.

Yep. So probably the biggest decision that happens during this time is that the league-first mentality kind of gets diluted with the stadiums that you referred to. As all the teams start moving into the bigger stadiums, they start building amenities into the stadiums, and the stadium experience totally changes, which it needed to as television became primary.

There had to be a reason to go to the stadium. Stadiums become all about the luxury boxes, the suites, the experiences, the corporate partners, the advertising, the drink sponsors, all of this stuff. And that becomes huge money for the NFL, but it's not shared money. It's local money.

Yes, this is my biggest criticism. The thing that got them here, this league-first mentality, is eroding because of the way that the revenue splits are happening. So you look at the local stadium sponsorships. You look at how every stadium is dedicating more and more real estate to luxury suites. The local merchandise sold in the stadiums is local revenue.

The teams are making more and more money locally. So a greater percentage is coming from things the teams are doing on their own. And you've got to wonder if that individualistic "I'm Jerry Jones and the Cowboys deserve all the revenue" mindset will be the thing that eventually causes them to get unseated in some way.

And I think the thing that keeps the competitive balance in place even as revenue diverges is the salary cap.

Yeah, this is a great place to talk about that. Let's go to 1993 and talk about the first time free agency and the salary cap came into the NFL—how that's computed and how that impacts the leverage going forward.

The league had been negotiating with the Players Association for a while, I think since the '60s, in various collective bargaining agreements, but the 1993 one is unique. The NFL didn't really have free agency for a while. In 1993, players finally got it, at least as long as a player had been in the league for 4 years. In exchange, there was a salary cap put in, capped at some fixed percentage of the amount of revenue that the league generates, right?

So today that is actually a pretty high number. It's 48.8% or something like that. So players are effectively partners in the league because the league's success ends up being their success—not necessarily evenly distributed among all players by any means. In fact, quite the opposite.

But at least, in whole, players are virtually guaranteed to make close to half of the league's overall revenue. How does that work with local and national revenue? Well, since it is based on the total revenue, if a team makes a whole bunch of local revenue, they're going to have no problem meeting the obligation that they have to pay the players.

And you're saying that that fixed amount is a league-wide aggregate, including all the local revenue from all of the teams.

Yes.

So this potentially could create a big imbalance, right? It's okay as long as the local revenue doesn't become too big of a part. But at some point, you have to imagine that what is 48.8% of league average could be 90% of what I make as a team in a small market with a crappy stadium. And then, because I have to pay players so much, there's no way I can pay for other stuff. My coaching gets hurt, or the production for fans gets hurt, or something that makes me a less competitive team, even if the players on the field are paid just as much as the players on the field from other teams.

Yep.

And it's interesting because I think in 1993, when the salary cap first came out, it was just of the shared revenue. But now, in the more recent agreements, it includes all league revenue, and local revenue is actually growing as a portion of the overall revenue for the top teams. Unshared revenue for teams grew from 12% in 1994 to 21% in 2003 and is over 30% today. So there's definitely a meaningful and ever-growing part of NFL team revenue that really does come from just the team itself and what it can do in its local market, not from that sort of locked brotherhood of "We're all in it together" league revenue.

Yeah, it is a serious threat to this magical Rozelle flywheel that has made the NFL succeed well beyond any other sport on a revenue basis in the world. Even though football and the NFL are not the most popular sport in the world, they are by far the highest-monetized and largest sport by revenue. I think, actually—I don't know if we said this up front—I'm pretty sure the NFL is the largest single media business in the world, not an aggregate, diversified media business. But if you consider the league as a single property, then I think it is the largest individual single property in the world.

It's a good question. The comps would probably be Marvel or Lucasfilm.

Yep. I looked at that. Bigger than Marvel, bigger than Lucasfilm.

Really?

Yep.

Because the NFL does $18 billion a year in revenue right now, which is expected to grow to $25 billion by 2027.

Yep. I believe Marvel's not anywhere near that. Wow. Yeah, that's wild.

Because it's on an annual basis. That's every year.

I mean, this TV contract that they just signed, the 10-year deal, is for $112 billion across all these entities.

Just wild.

And just to share what that specifically looks like, CBS broadcasts a Sunday afternoon package for $1.85 billion a year. Fox has a Sunday afternoon package for $2 billion a year. They invented a new schedule, the Sunday night package. They invented this a while ago, but NBC has that for $1.7 billion a year. Disney owns Monday Night Football, as we mentioned, for $2.55 billion a year. It is a single game per week, and it's the most expensive package. It's incredible. Amazon has Thursday Night Football for $1.3 billion a year. And, of course, we just got the news last month that DirecTV has lost NFL Sunday Ticket, and that is moving to YouTube TV. NFL Sunday Ticket is also a genius move because you're reselling the same content you've already sold.

It's the same content. It's the content that is exclusive to CBS, Fox, and NBC that those networks produce. I'm pretty sure it's even their cameras, their on-air talent, all that. But the NFL has the exclusive right to bundle all that together and sell it as a package directly to a consumer if you want access to all the games. If you don't just want the ones that are on TV near you, if you want the ability to watch any game at any time. And it is incredible to me that that is worth $2 billion, given the NFL is actually not doing the work to produce it. The people who are doing the work to produce it are the people who are paying for the privilege to cover those games.

Amazing. And then there's more. Now let's catch us up to the present day. There's revenue from the NFL Films division. I think it's probably a couple hundred million dollars, I would expect, at this point in time. There's other licensing rights, particularly video games and Madden. So I don't think it's public, but it was reported that the latest Madden licensing deal with EA was a total of $1.6 billion for a 5-year rights deal. Wow. Man, remember that episode we did with Trip on EA back in the day? It was so fun talking about the origins of Madden.

That's a $300 million-a-year deal. So that's like a sixth of what one of these channels pays to broadcast the actual NFL. That's what EA pays to just license the use of the player names and team logos and all that.

Yep. Then there's fantasy, both betting and non-betting.

Yeah. And this is a good point to fully bring us to today. I think it is totally reasonable to say that the things that powered the rise of the NFL were national TV, postwar prosperity, the rise of the middle class, the Madison Avenue explosion, and the league-first mentality. But all of this is in the '50s, '60s, and '70s. The thing that powered the NFL to be such a dominant force in society today is fantasy football and sports betting. So let's talk about fantasy first.

Great. There's like 30 or 40 million people a year in the United States who play fantasy football, thus making it the centerpiece of conversation with their closest friends and families and coworkers, which means you have to watch football in order to have those conversations with the people who are closest to you in your life. Fantasy is such a great example of driving and adding to the Rozelle flywheel: better products, deeper fan engagement, more viewership, and more advertising, which really now translates to more revenue opportunities because there are revenue opportunities from fantasy. Sunday Ticket—that whole package basically was to cater to 2 audiences. One, bars and restaurants that want to be able to show multiple games within their establishment, but two, and even bigger, the fantasy crowd. They're going to be willing to pay a lot of money to see all the games live. And then that feeds back into the product and the flywheel spins.

And, of course, then there's sports betting, which is now becoming legalized in lots of states, but has been a force for a long time. Of course, you could bet legally in Las Vegas, but obviously tons of people have bookies who can just place bets for them no matter where they lived.

I'm shocked, shocked to find gambling going on in this establishment.

And when you've got money riding on a game, you are absolutely going to tune in. I looked it up just to put a number on this. The current estimates are that 46 million Americans, or 18% of betting-age U.S. adults, bet on the NFL this year, and that number continues to grow.

That's just this year.

Yeah.

Wow.

People bet on the NFL more than any other sport in the U.S. Variety reports that 81% of sports bettors bet on NFL games, versus just over 50% for the NBA and 44% for Major League Baseball. Interestingly, the NFL doesn't generate meaningful revenue from betting yet, though I am sure they will in the future.

Yeah, you can probably bet on that.

Hey, hey.

So I guess it's worth pausing to understand the shape of the NFL's business today and how the revenue breaks down. On average, about 2/3 of any given team's revenue comes from shared national revenue that we talked about. The remaining 1/3 comes from local revenue. But again, this is just on average. Some teams are very good at local revenue, like the Dallas Cowboys, and some teams are very bad at this, like the Bills or the Lions. And I have some numbers to put that in perspective. This past year, each team got right around $350 million from the shared league revenue, but that extra local revenue obviously can cause a gigantic swing in the team's total revenue. Forbes estimates that the Cowboys made over $1 billion last year, whereas the Lions only made $450 million. So, not really much on top of the shared revenue from the league.

Wow. So much for the league-first mentality from Jerry Jones there.

Right? So it's also useful, I think, to slice it a different way rather than just the shared versus local. Here's how the NFL team revenue breaks down purely by product. So this is essentially answering the question: How does the NFL make money? Sixty-one percent comes from media. Most of that is the TV from the shared league revenue. Ten percent comes from general seating, which is regular plastic seats. Another 10% comes from premium seating.

That's for the proletariat.

Yes. The premium seating that we mentioned is the suites and all that stuff. That's a big, growing revenue line for the people with nice stadiums.

And most of that is corporate, right?

I think so. That's my best guess. It's super different city to city. This is probably the most variable.

Yeah.

Ten percent comes from sponsorship and advertising. And then about 9% is other, which I'm guessing is where NFL Films and a lot of that stuff sort of lies.

Maybe the Madden deal is in there. I don't know if it'd be there or in media.

Yeah. So that's the shape of the NFL as a business today. Before we kind of finish that out and get into analyzing the business, I mentioned the complicated relationship that people have with football. In the 2000s, it became clear as day that CTE is very real, caused by playing football, and causes shorter lifespans and immense physical harm to players. And CTE, as many of you know, is chronic traumatic encephalopathy, which is a terrible brain condition that develops from the many repeated subconcussive hits to the head. And the symptoms are devastating.

Mental, emotional, suicides, everything.

I mean, the NFL settled a billion-dollar lawsuit to pay out victims and families of CTE.

Yeah. It's even worse than that. There are a bunch of dimensions here. I played football all growing up—middle school, high school, college. My feeling—and this was in the '90s and early 2000s—was that I was for sure risking my body by playing, but the risk calculation in my mind was all short-term. I could tear an ACL, sure. I could break my arm, sure. I could get a concussion, sure. But in my mind, those were all the same things.

There was no broader understanding among the general population or NFL players themselves that there had been a bunch of research on this or that there was real long-term mental risk to playing the game. Here's what's really bad: the NFL knew it and covered it up. The NFL started doing research into the long-term effects of concussions and other head trauma from playing football in the '90s. Then they sat on the data for a long time. When they did release it, they claimed that there was absolutely no provable link, no evidence at all that head injuries from playing football led to long-term damage.

The NFL didn't acknowledge that until 2016.

Super bad. There's the Will Smith movie *Concussion* about it. We don't need to go into a bunch of the specifics, but I think from the Acquired standpoint and the NFL audience standpoint, this was a major, major trust-breaking moment.

Certainly, it affected it enough for LeBron James to say, "I don't want my son playing football." That was a huge cultural moment.

The second-order effects are pretty large from this one. What you said about parents allowing and wanting their children to play football is interesting. Interestingly, all youth sports are down. I don't think football is down much more than other youth sports, but video games, social media, phones—

And the pandemic, too.

Yes. But I think the real risk, and this is starting to be shown in the data, is how future generations are going to view the NFL and football. If you look at the data, U.S. adults as a whole—33% say the NFL is their favorite professional sports league. But if you look at Gen Z, only 23% of Gen Z say that the NFL is their favorite professional sport. So that's 10 points less than the broader population. Basketball among Gen Z is 19%, right there, pretty close to football.

From a revenue perspective, the NFL today makes twice as much as basketball. But that's a pretty damning trend, looking at where Gen Z's interests lie.

Yep. This whole thing was just bad, period, for the NFL. How do you deny the existence of these things when people in your organization have been hired to commission this research and then you're burying it for decades—

And it's your players? It is your product on the field.

It's also interesting to note who wasn't producing content about concussions. This Will Smith movie came out, and I don't think it was through the media channels of any of the NFL's partners. I think the NFL wields a lot of influence, saying, "Oh, you may not be a part of the networks that get our broadcast in the next generation." That strategy would have worked really well 30 years ago, but in the social media era, where individuals have Twitter accounts, it's a lot harder to control the narrative.

Yep. Speaking of how hard it is to control the narrative, let's talk about blackballing Colin Kaepernick. I think an interesting place to start is the job of the commissioner. The commissioner is not the president or CEO of football. The owners are not their executives, and the commissioner's obligation is not to the fans. The commissioner is hired to do one job, and that job is to speak for and do things that are in the best interests of the owners as a whole. If the most powerful owners want something, that is what the commissioner does. That is the message from the NFL.

The NFL itself is a very thin layer on top of a whole bunch of teams that are their own very large businesses. In fact, a lot of hay was made about the NFL switching in 2015 from a nonprofit to a for-profit. The NFL has very little net income. Who cares what its tax-filing status is?

It all gets distributed out to the teams.

Right? The teams are their own taxpaying entities and their own businesses. Roger Goodell makes $40-plus million a year to do what the owners want, and they hire him to do that. They will fire him if he doesn't do that.

Oh man, there are these great quotes in *America's Game* where the owners are talking about Pete Rozelle as they negotiate contracts with the players' representative at the time, and the players are complaining that Pete Rozelle isn't being neutral in these negotiations. The owners are like, "Of course he's neutral. We pay him damn well to be neutral." So yeah, the commissioner of the NFL is the ultimate in shareholder responsibility. In fact, shareholder responsibility is his only responsibility.

Back to Colin Kaepernick. So in the good old days of football, it was a bunch of reasonably young enterprising owners who loved football and owned teams. It wasn't clear if they were going to be good businesses or not, but the league as itself and thus all the owners were cowboys trying to make it for themselves in the world. And those people all got old and didn't want to change at all.

Now most of those people are dead, and it's their descendants, who are also old, who own these teams.

Yes. And now there are these very interesting artifacts of the league having grown up old and stodgy—the incumbent, something like that—when it was once a startup, especially when it comes to just acknowledging that a guy can protest the national anthem.

Yeah, I do think when that happened in 2016, it was a lot more of a radical act than it might seem today, and there were a lot of people at the time who were deeply offended by it. He was using the NFL's platform to make a very personal argument—

And there were a lot of people in the NFL who understood why he was doing it, because 70% of the NFL is Black. So there was a lot going on here.

Right? And we should say what actually happened. Kaepernick in 2016 took a knee during the national anthem to protest police brutality and racial inequality in the U.S. After that season, he was a free agent. Zero teams signed him, and of course he had some disappointing seasons and injuries. But let's be real here: the NFL blackballed Colin Kaepernick after this.

Kaepernick filed a grievance and eventually reached a confidential settlement with the NFL. The whole macro thing here is very strange: the owners let this seemingly minor thing turn into the gigantic media mess that it did.

Yeah. And I think the interesting thing for the purposes of our discussion here is that I don't think this ever would have happened, or happened in the same way, in the NBA. The NBA embraced both social media and the strategy of letting players have their own platforms, be their own voices, and promote the league through that. The NFL was the opposite of that. They were command and control: We own the message. There was no clearer example of this.

Right? Which is emblematic of the NFL not understanding the social media era.

Yep. So all this to say, it was very compelling for David, you and I to spend a bunch of time talking about the NFL up through 1980 and the Rozelle era. But revenues have gone up, team values have gone up, games have gone from standard-def to HD to 4K, but the end of the hero's journey sort of happened at the end of the Rozelle era.

Yeah.

And it won't hurt their business for a long time. That's the interesting thing. I think this is a good point to transition into analysis. Why don't we do Playbook and then do Power?

One thing that really strikes me through all this is the Lindy effect. Despite everything you just said, football is bigger than it ever has been.

$12 billion a year in revenue from the TV deals alone.

A huge amount of revenue. And now they've diversified those revenue sources. It's not just old-line broadcast networks trying to hang on that are paying them this money. No, it's Google and Amazon that are paying them this money.

They're paying what? Close to $4 billion a year from the biggest tech companies in the world?

Yeah, the NFL is going to be just fine. That revenue is almost assuredly going to grow at a very healthy clip. So even despite all this, people love their football. I still love watching football.

Totally. Me too. I feel like I'm a slight apologist for still loving football as much as I do.

Two things. As one, I mean, again, that just reinforces the power of the Lindy effect to me. The NFL is just fine and is going to be just fine for a very, very long time. Now, I do think the younger generations' thing is a real risk. Related to that, one, basketball definitely won the social media era in a way—not to as big a degree as the NFL won the TV era—but basketball's on the rise.

Related to that is number two: the NFL has never figured out international. Many fits and starts.

Have you read about these home marketing areas?

No.

It's really weird. The NFL now has zero international interest. They go play these other games in other countries, and the people who watch them are people from the U.S. who fly to watch their favorite team play somewhere exotic.

For God’s sake, baseball has a robust international presence.

Right. As we talked about in our NBA episode, basketball’s entire future growth and current groundswell of popularity is young people and international. The NFL has tried NFL Europe, then kind of shut that down because it couldn’t get the owners to care about it. This home marketing areas thing that they’re doing says that teams have an exclusive right, versus other NFL teams, to market in certain countries.

Oh, no way. I didn’t see this.

I think it’s like the Cowboys can advertise the Cowboys in Mexico. It’s that sort of thing, because they want to try to build affinity for teams where there’s some theoretical mapping to that country based on ethnic groups in the area or proximity. That does not seem like a sound international strategy to me.

No. The question kind of becomes, how can the NFL continue to grow, or can it? The average number of people who watch any given NFL game—pick your metric. Is it the average Monday Night Football game? Is it the average kickoff game of the season? Is it the average Super Bowl? It’s up and down over the last 20 years.

It’s amazing that it’s as high as it is when people don’t watch anything else on TV. But honestly, I’m having a hard time understanding how they grow the fan base.

Well, the core to growing the original NFL flywheel is increasing fan reach and engagement, and that’s no longer happening, right? Then you have this interesting question: Is college football starting to pay players in a way that’s competitive with the NFL, or is it additive? Because college football has fueled the growth of the NFL.

Think about it this way: NBA and Major League Baseball teams have to pay to operate farm teams that no one wants to watch or play in. The NFL gets all the benefit of all the development of all these players in their college years for free.

Right. They benefit from the storylines around them, too. When someone comes into Major League Baseball and gets promoted out of the minors, everyone’s like, “Who cares? I have no idea who that person is.” Whereas the Heisman Trophy winner, whose childhood you know about, comes out of NCAA football. The storylines are fully baked and ready to go.

Yeah. College football has been the best thing to ever happen to the NFL for basically its whole existence.

Right. It was the worst thing for the first 20 years, and then it was the best thing.

Good point. Yeah. I think the biggest players getting paid in the NCAA right now, with the sort of weird way that the booster stuff works, is around $2 million. They’re not competing for talent, and I don’t think the NFL will start trying to sign earlier college players, so I don’t think they’ll be competing directly or in the same order of magnitude.

The revenue that big colleges and these conferences make isn’t NFL-size, but these are huge deals. The NFL, for comparison, has a $12 billion aggregate set of media rights that it sells. The Big Ten deal is $1 billion a year. They just signed a 7-year deal at $1 billion a year, which is twice their previous deal from 2016.

All this to say, the business of college football is still much, much smaller than the NFL. But it’ll be really interesting to see, as players start to get paid more, where it finds its footing in the landscape and if it changes at all from where it is today.

Yep. A thing in the playbook here that I think is interesting to talk about is the relationship that the NFL has with its players as a supplier and with the networks as a customer. It got itself into this trap for a while where it was negotiating with the networks, so it would sign a big deal to get a bunch of revenue and then would quickly have a negotiation coming up with the players.

They seem to have switched to this thing now where they signed a collective bargaining agreement for a decade with the players. I think they did that in 2020, and that lasts through 2030. Then, in 2022, that’s when they renegotiated the 10-year rights for media.

It’s a percentage basis. Yeah.

Right. So, they seem to have switched to this, which is a good business decision. Before anyone knows what the big new revenue contract looks like, they go and lock in all the pricing on their suppliers. Now, granted, it’s a revenue share, so in that respect it’s fair. But it is quite clever to have gotten off the tick-tock cycle of having the players have a bunch of leverage after seeing what the media deal looks like and doing it in this order.

Yep.

The other thing that I’ve been charting is that the media deals go up dramatically in value, but the average number of viewers kind of stays the same. In 2002, the kickoff game had about 20 million people watching. It rose into the mid-20 millions and then dipped back down below 20 million. Last year, about 20 million people watched the kickoff game.

So we’re in about 2 decades of audience stagnation.

Yeah. So why is it that the media rights are worth so much more when the number of audience impressions stays the same? I’m curious where your head is on that. I have some theories, but on a CPM basis, it seems like the advertisers are all just paying more money now, or at least the TV networks believe that they can make more money from something, and so they’re willing to pay more for the rights.

That’s a great question. My first instinct is to say I think it’s scarcity value, and I don’t think there’s anywhere else in the modern media world except live football where you can hit a huge number of people all at once across demographics.

Yep. I think that’s definitely part of it. Another argument would be, well, they’re finding a way to put more ad slots into the same amount of media, but that’s not true. They’ve actually held flat, or in some cases even decreased, the number of commercials over the last 15 years in NFL broadcasts.

So you’re thinking, okay, the audience size is about the same, and the number of ad slots is about the same. What else could be going on here? I think part of it is—you’re right—that the networks are quickly getting into a place where they’re like, “We don’t really have any other content that people want to watch, so we kind of need this no matter what.”

That advantages the NFL in the negotiation, where they come in and say, “Look, I know you used to be super profitable buying these rights from us, and then your business on the back end was selling all these advertisements against it. We think you should just compete against each other until your margins are zero, and we’re going to accrue all the profit pool now because there’s basically nothing else that you’ll put on that people want to watch.”

I think that’s probably right. For those networks, run the counterfactual of the networks no longer having football. They don’t exist anymore. This has been life support for them for a decade.

Here’s the interesting thing: You might say, well, if the margins are razor-thin, they need a ton of volume, because effectively what’s happening here is that the profit is getting reallocated to a different part of the supply chain. There’s no more value in distribution, and all the value is accruing to the content creator.

You could make an analogy to the airline industry, where no one was willing to pay for a better experience on a flight. All the margin got competed away between all the airlines, so all the airlines had to merge because you had to have massive, massive scale. That’s also what happened to these media companies that are distributing the content.

I mean, AT&T/DirecTV and NBCUniversal—the companies that are buying the rights—are massive combinations that can actually afford to generate any margin. What are the unit economics of buying NFL rights and then selling a bunch of ads against them? I have to imagine they’re much worse than they used to be.

They have to be. It’s pretty genius that the NFL doesn’t do this themselves, that they rely on broadcast partners, because they’ve basically observed that they can get all these people to do all this work and pay them all this guaranteed money, and the NFL still gets to keep all the profits.

The NFL doesn’t have to film the games, other than NFL Films. They don’t have to have the broadcast trucks. They don’t have to have the relationship with the consumer and do all the direct marketing to the consumer to onboard them to their direct video platform. They don’t have to sell the ads to the advertisers.

They’ve somehow outsourced and commoditized all of that, and I think they get to keep the vast majority of the profits and will continue to shift that balance in their favor.

This is probably a good time to bring up the Amazon deal that we’ve referred to with Thursday Night Football and the news that’s coming out. This is the first season that Amazon is the exclusive destination for Thursday Night Football, right?

Correct. Yeah. They used to air Thursday Night Football also on Fox and on the NFL Network, which is the NFL’s own channel to do mostly non-game programming, but some experimental stuff themselves, like RedZone and alternate game broadcasts. But Thursday night is just Amazon now.

The news is coming out right at the end of the season that, from an economics perspective for Amazon and on an ad basis, it vastly underperformed expectations.

Yeah. So then Amazon is having to do make-goods with the advertisers because Amazon wasn’t able to get enough people to watch the streams. Frankly, I think a lot of people want to watch the NFL on TV, and it’s kind of complicated to figure out how to stream it and watch it through Amazon.

I know it can just happen on my little set-top box and my Apple TV. Install the app, this, that, and the other thing. But you know what’s easier for most people? Turning on channel 3.

I mean, for God’s sake, baseball has a robust international presence.

It’s totally fascinating watching the balance of power in the value chain. You might think, “Huh, well, is the packaging component that the NFL does—the talent and the coaches and creating the storylines—actually where all the value lies?” It’s interesting to me that the NFLPA has managed to negotiate for half the revenue. Good on the players association for getting that big a piece of the pie, because they’ve actually done a pretty good job of managing to shift some of the value from the NFL even further upstream to the NFL’s suppliers, rather than letting it all sort of collect in the packaging component that the NFL has.

Yep. Doing this whole episode has made me really realize that there is a huge amount of value-add that the NFL and its partners bring to the product beyond the players. Now, nobody should ever shed a tear for the NFL and the owners at the expense of the players. But if you were to make an argument that the players are everything—that they are the product, and the game on the field that they play is the product, full stop, and they should get much more—I don’t think that’s a fair argument. They play a football game, but the NFL’s product is sports entertainment.

Yes, completely agree with that. There is a very interesting point here: on a revenue basis, it’s an $18 billion-a-year revenue business. The NFL actually owns way more mind share than its revenue would illustrate. A strange statement to make is that the NFL is an oddly small business for how large a role it plays in our lives. To contextualize who else makes $18 billion in revenue: General Mills, Adobe, and Halliburton. The NFL’s share of mind is way higher than any of those companies’ products. I continue to think that networks are just on this treadmill where they’re going to keep paying more and more and more for NFL rights until it’s actually uneconomic for them to do so, but then they’ll be in so deep that it’s pretty hard to recover from that.

Yeah. I’ve got one more playbook theme. Buying any professional sports franchise 10 to 15 years ago was an incredible trade for 2 reasons. By the way, just to add some numbers to it, the average NFL team was valued at $1.2 billion in 2012, so that’s a decade ago. The average was $1.2 billion, and today it’s about $4.5 billion for the average NFL team. We’re not talking Cowboys. We’re not talking Giants. If those were to change hands—

Yep, those are based on Forbes valuations. You can’t trust those valuations. I think any actual trade would have to be higher than that.

The reason number 1 is just scarcity value. There are a finite number of these things, and they’re not making more. There are a lot of people who want to own them for a lot of reasons, not all of which are economic.

Yep.

So that’s one, and that’s never going to change.

Owning an NFL team—it’s like a grown-up NFT.

It is the ultimate NFT. If you are a gazillionaire and you want to flex on other gazillionaires, this is a way that is at least very likely to have a lot of durable value for you to keep doing that, regardless of its underlying cash flows.

That is a net-present-happiness-value-positive trade for a lot of billionaires. But I will say, when you have something that increases in value because of social signaling and desirability, and is not tied to underlying cash flows, that is a potential sign of a valuation bubble. Not always. There are luxury watches that have kept their value for centuries, but it should make you wonder. I mean, team values have ballooned to the point where there are very, very few people who can buy one today.

Yeah, which means that a change in sentiment among that very narrow market will have a huge impact. Totally.

But for now, I think the valuations are probably safe.

Ooh. All right, we’ll see in a few years. I think they’ve reached a plateau. I don’t think we’re going anywhere north of $8 billion in the near future.

Oh, I agree. I just don’t think you’re going to see these things—

You don’t think they’re going to deflate?

No, they’re not going to trade at fire-sale prices.

Yeah. The average revenue multiple of a team went from about 4× to about 8× between 2012 and 2022.

Wow. So, yeah, multiple expansion along with the rest of the market, but I think this is going to be more durable—

Potentially justified by the fact that most people don’t actually own these things for their cash-generating characteristics anyway. It’s a very fancy gem.

Yep. Totally. Okay, so that’s one. But then point number 2 is that I think there was a narrative around cord-cutting 10 years ago that linear broadcast television was dead, and live sports—especially football—were the last bastion. But who knows how long this will last? What I, at least, and a lot of people didn’t see back then is that these leagues—the NFL especially—are going to be totally fine in a post-linear-TV era. And no further proof is needed than Amazon and Google being the latest companies to pay boatloads of money to the NFL.

Yep. The NFL will make the transition to digital distribution. And it’s pretty amazing that they didn’t need to build it themselves. MLB did the whole BAMTech thing. The NFL has built basically no technology, basically no distribution, and basically no direct relationship with the audience, and they’ll still be fine.

And they’ll still be fine.

They outsourced all the hard parts—

And they also completely whiffed on strategy for the social media era. But they’re still fine.

Yeah, it is wild. We talked about this a lot on the NBA episode, but just to recap here, because the story hasn’t really changed: LeBron has well over 100 million social media followers—

Instagram alone.

And the 2 largest NFL players by social media following are OBJ and Tom Brady, both of whom are in the low teens. So, like, a 10× difference. Isn’t that interesting, that people don’t want to follow NFL stars the way they want to follow NBA stars on social media?

I think, if I remember right, the core thesis of our NBA episode is that what they got so right through the social media era was: give the players a voice, give the players a platform. The individual person is the hero on social media. And that’s so antithetical—

And the NFL is, “Control the message.”

And that’s also reflective of the sports themselves, right? NFL players wear helmets; basketball players don’t wear helmets. That’s little stuff, but it matters. As a business, the NFL’s fine. They’re totally fine.

Yep. While we’re contrasting leagues, there’s this pretty interesting thing that I’ve been thinking about, which is this cooperative-capitalist-communism thing that the NFL did. It was really good at creating parity among teams to be the most competitive. But let’s take it to the level of the players. Interestingly enough, the NFL has been the best of any of the leagues at creating the narrowest band of player compensation, using the same philosophy that they applied to league competition. Now, of course, it is nowhere near equal pay among players. And, yes, it’s a bummer that while Aaron Rodgers makes $50 million a year, there’s a long tail of players who only play 1 to 3 years, make league minimum, and then wash out, which I think is mid-single-digit millions of lifetime compensation from football. So, still, that’s good money.

Yeah, lifetime, though. So players are definitely variably rewarded based on their value to any given team. But the NBA and MLB are way less equal than the NFL. The superstars in the NBA, like LeBron James, including sponsorships, make $127 million a year. There is no one in the sport of football who comes close. There are 3 basketball players and 3 soccer players at the top of the list before any football players. The NFL has managed to smooth the curve more than other sports have.

Well, I think this is also related to the social media thing, and really this is the big divergence between the players and the sports and the leagues. The NFL has a league, great, they’re fine. But the players—I think players in other leagues, and especially the NBA, have been able to build wealth, businesses, and revenue streams much better than NFL players because they’re the platform, and the audience value accrues to them so much more.

Yep. Agree.

LeBron, I think, is already a billionaire, and especially once his playing days are over, he will be a multibillionaire because of the influence that he has. Apparently, LeBron James has signed some secret deal with Nike for the rest of his lifetime. That’s something crazy high that isn’t even accounted for in these numbers.

Wow. This is actually a good place to flip to powers. Awesome. For new listeners, this is the section we do in analysis based on the great book by Hamilton Helmer, where we run through each of his 7 Powers that a business could have to earn long-term differential profits versus its competitors. The 7 Powers are counter-positioning, scale economies, switching costs, network economies, process power, branding, and cornered resource. All right, I think they definitely have a cornered resource. If you want to watch professional football played by this set of athletes, they are the only game in town.

Yep, they absolutely have a cornered resource.

Yeah, I think this is maybe the clearest cornered resource that we’ve ever had on the show. Yep, completely agree. And clearly this is why the fight with the AFL is worth it. We need the greatest players on Earth to play this game, and we can’t have them spread across 2 leagues competing against each other. If we have all the best players, then we get to do all the incredible things that the NFL has gotten to do, like the media-rights negotiations.

Yep. I think during the dawn of the TV era, they were counter-positioned against Major League Baseball in that, while the decline in revenue from the gate by adding TV certainly was a hit to them, it wasn’t as much of an existential hit in the way it was for Major League Baseball.

And so the NFL was more able and willing to experiment with the new business model of TV as the primary revenue source than baseball.

Yeah, certainly. And I think, generalizing from that, I agree even more that this “for the greater good” mindset was easier to do when everyone’s individual franchise was smaller. But when you’ve got these teams that have already been around for 100 years, good luck talking them out of a machine that already works well.

Right? There’s no way, even in 1949, that the Yankees would have agreed to a league-first mindset.

Yes.

Let alone today.

Yep.

When they have their own television network, et cetera.

Yep. You know, I’ve been thinking about branding. I actually don’t think this one has branding power, because the definition of branding power is: if somebody offers you the same thing with a different brand on it, will you pay more?

The thing about getting multiple congressional antitrust exemptions is that there isn’t another game in town. I mean, there’s sort of a rebooted XFL. There’s sort of a rebooted USFL. But it’s not that people don’t care about those because the NFL brand isn’t there. People don’t care about them because it’s not good football. It all comes back to a cornered resource. They have the players.

Right? Exactly.

You could maybe put the antitrust exemption—you could kind of shoehorn that into process power—

Or a cornered resource.

Oh, yeah. Or a cornered resource. And like you said, no new league is going to have that.

It’s totally fascinating that the government thinks it’s good enough for the country to issue an antitrust exemption. It’s like, well, having a big, popular sports league is good for us, so let’s enable that to be as big as possible.

I think there are definitely scale economies here in the sports entertainment aspect of the product. There’s no way you could spend the amount of money it takes to produce a good NFL game without the audience that they have to justify that level of cost.

Even a single Sunday game would bankrupt any startup league to put those kinds of production values in.

Right. I think it’s about $44 million per game—effectively what the average broadcast partner is paying the NFL just for a single game.

Yeah. And just for the rights, right?

Right. If you’re the NFL, if you can go make $44 million by making a game happen, and that doesn’t include anything on the field, selling tickets, or anything else, that’s revenue just from piping that game to a TV network. Or they’re not even doing the piping—they’re allowing a TV network to come on the field—

To show up and produce the game.

Yeah.

Right. Then you can afford to have a whole bunch of costs to make that experience happen.

Yep.

Value creation, value capture. And the way that I want to do value creation and value capture here is: of the value created by the NFL in the world, how much of it do they capture?

There’s one thing we didn’t talk about, which is taxpayer-funded stadiums. All the research you read about new stadiums that are funded by taxpayers—and not every stadium is funded by taxpayers. The new Giants-Jets stadium in New York is funded by the team and the NFL, whereas the Bills’ stadium is going to be funded largely by the state of New York. Every piece of research you read there is like, yeah, they’re at best break-even for communities, unless it’s part of some larger economic redevelopment thing.

So, I think the NFL is now unbelievably extractive of the networks. They’ve historically been very extractive of players, but now the players seem to have a pretty good—or at least better—deal than they ever had before. And NFL teams are very extractive of communities in these stadium deals.

I think if you look at the $18 billion a year of revenue, the NFL, if you include the players, captures as much value as it possibly can. They are unbelievably good at value capture.

I mean, they literally resell the same media rights multiple times over.

Yes. Value-capture pioneers, I believe, is a phrase that we used on another episode.

Okay.

But it is amazing how much mind share the NFL does own, in my opinion, on top of the actual revenue number. They don’t leave a lot of consumer surplus in dollars. But given our earlier conversation that $18 billion isn’t that much revenue compared to other companies we’ve covered on this show, maybe there is some kind of unquantifiable consumer mind share that does exist on top of any of the revenue they generate.

How can you put a price on the fun of a Super Bowl party or texting about an amazing catch with your dad? There are all sorts of things that are hard to value.

Well, it’s also a little bit similar to the trading value of NFL teams and what price they would actually trade at. Even as the NFL has become this incredible business, they don’t trade at rational economic prices because the people buying them are doing net-present-happiness-value equations, not economic-value equations.

Right. As we talked about, these NFL teams are valued more like scarce beachfront property than cash-flowing businesses.

Yep.

I’d be curious to hear anyone’s thoughts on whether the NFL generates more value than $18 billion a year.

Interestingly, the NFL today is less about what it was in the 1940s, 1950s, and 1960s: this team of guys who really hate another team and want to destroy them at all costs. They’re led by this fearless leader who’s probably also their owner and maybe a player on the team.

At this point, the players seem to recognize that they’re all basically employees. The players are more in it together as coworkers than they are against each other. Even for players who were on opposite teams, before and after a game they’ll come and hug each other or rekindle a relationship with another player.

At the end of the day, they all work for the owners. And so it’s probably a good thing for them to recognize that now—the real reality on the field. At least it means they’re going to be better at arguing for what’s fair for them in a business that demands an immense amount and maybe even years off their lives for a lot of people.

So let’s not end on that note. Let’s close with what’s the bear case and what’s the bull case for the NFL going forward. We’ve talked about a lot of the bears: the cooperative armor that got them here begins to shatter, youth not playing, player-safety issues, and the failure of international expansion. But I’m curious to hear your thoughts on a bull case for the NFL.

My bull case is what I’ve been saying here for a while now on analysis: the Lindy effect. I kind of think all this is noise from a business standpoint for the NFL and from a staying-power standpoint. It’s not going anywhere. It’s one of the most incredible cornered resources in the world. It’s going to be completely fine.

I completely agree with you. And it’s funny—all the negative stuff we’ve talked about—the NFL will continue to be a ginormous, successful, and growing business for a long time, in my opinion.

Of course, we haven’t even talked about sports betting, which is now legal in the United States. And I just want to say, too, doing this episode was really fun. Just on a personal note, I’ve had, I think, probably a similar relationship to football with you over the years—more complicated, too, because I played for many years.

Yeah.

I had certainly a lot of mixed emotions over the past decade, including many years where I just stopped watching football altogether. And it was really fun doing this—reengaging with the game, reengaging with all the content around the game, all the entertainment content. It is great.

So I think the game is going to be fine. Clearly, the business is going to be fine. I’m glad we did this.

All this to say, can’t wait to watch the playoffs.

Me, too. You ready for some football?

I am ready for some football.

All right, listeners. Hello again from January of 2026. David and I are back.

Hello, Ben.

From the present in our time-traveling NFL episode, we have some updates on where we left things here in our NFL episode. And I am staring at a lot of notes that I’ve taken from a bunch of conversations that I’ve had over the last week and a half with folks in and around the league, reading a bunch of news stories and press releases about the earth-shattering things that have happened that have really changed the NFL’s trajectory over the last 3 years.

Me too. Can’t wait to get into it.

So, we talked a little bit about international, and we were very negative and pooh-poohing the league’s prospects internationally. I think when we recorded, there were just games in London and Germany, or maybe we were 1 year off from that. But there are now 7 international games across 5 countries, and they have publicly stated that there is a goal to get to 16 international games per year.

They’re not backing away from this.

Yes, this is full steam ahead on this strategy. And as we’ve seen in the past, when the NFL decides that something is its strategy, they tend to see it through.

And this past season, I think it was kickoff weekend, right? Was the São Paulo game in Brazil streamed by YouTube for free in front of the paywall globally?

Yes. Exclusively on YouTube.

Yeah, that was huge. If you had told us in 2023 that that would be happening a few short years later, even with everything we talked about—how streaming, the tech companies, and digital were ahead for the NFL—I don’t think we would have believed it.

Yeah, they are starting to build some local fan bases there.

Well, I think maybe next season we’ve got to do a boondoggle and go to one of these games for sure.

Okay, my second one: viewership has hit an all-time high, and we sort of talked about how it topped out and flattened, and the NFL is already saturated. It did grow. The regular season had its best TV ratings in 36 years. The league posted an average delivery of 18.7 million viewers per game. That is a 10% gain year over year.

But if you look back 15 years to 2011, the number was 17.5 million compared to the record 18.7 million this year. So if you look at it just over the last few years, it looks like this great growth rate. But if you look at it over the last 20, it tells the story that we’ve hit this saturation number.

Yeah, actually, it dipped for a while and now it’s back.

Right. The Super Bowl, though, did legitimately hit an all-time high: 127 million viewers, and that is after the previous year was also an all-time high. This is the ultimate appointment-viewing thing to watch on TV. It is the premier TV flagship event, and it only gets more and more and more premier each year.

We might have a little more to say on this, but certainly the Taylor Swift crossover helped with the Super Bowl viewership numbers over the last couple of years.

Yes. One other point that I did miss while we’re in TV broadcast land on the episode: David, I don’t know if you knew this structurally, but TV networks actually get paid in 2 ways. When we were talking about how viewership had stagnated, so why do they get to charge more and more and more for ads? The networks buy the rights—you know, Fox or NBC buys a rights package, and they show the game. I assumed they were only getting compensated with ad revenue and then indirectly for retaining those viewers for whatever programming they also had on the network.

There is a second, very large revenue stream called retransmission fees. Did you know about this?

Ah, yes. Oh man, going back to my days as a media investment banker.

Yeah. So, starting in the mid-to-late 2000s—that’s at least when they became material—the networks started being able to charge cable companies for the right to retransmit stuff that they have the rights to.

Yeah, this is NBC, ABC, and Fox charging the cable companies to bring those broadcast networks onto cable systems, even though they are also available for free over the air to consumers.

Right. But if you have a cable package and, in your cable package, you choose to go to the NBC station, then NBC gets paid by the cable company for bringing you as a viewer. I think that revenue stream was almost as large as the advertising revenue stream.

So they have these 2 big pillars of their business: the direct subscription revenue that comes from retransmission fees and the advertising revenue. Obviously, retransmission is dwindling as cable dwindles, but the belief is, well, hey, with Peacock or with Fox Sports or any of these apps, we have our own direct monetization. Or even if we’re included in YouTube TV, one way or another, we’re getting the equivalent of a subscriber fee for this, too.

Obviously, that’s a subscription that is paid for all of the networks’ programming, but as we talked about on the episode, basically it’s the NFL that matters here.

Yeah. Sports, and in particular premium sports, and in particular the NFL, are really where TV ad spend is shifting.

It’s the reason consumers reach into their wallet.

Yes. And sports are eating a larger and larger percentage of the pie of TV ad revenue. And you could make an argument that they were under-earning for many years, but as the last thing that you actually watch on TV is these premium live sports, they are definitely commanding the revenues that they long deserved.

So why has viewership increased so much? Or why have people been really wanting to pay attention to NFL games over the last couple of years? What could have possibly changed that would make people pay attention?

Well, we said earlier in the episode that if you’ve got money riding on a game, you are much more likely to care about it, even if you don’t care about any of these teams. Gambling. So the Supreme Court decision came down—I believe it made it a states’ rights issue of what type of sports gambling to allow. I think that’s correct.

Many states made it legal. And so, in the episode, we said 46 million Americans bet on the NFL 3 years ago. Estimates are that this year that number has grown to 76 million Americans.

Yeah. This is a huge new revenue stream for the NFL, and it drives the flywheel, too. It’s not just directly participating through their relationships with the gambling companies, but also this drives Sunday Ticket subscriptions. This drives engagement with the game.

Yes. It’s a giant win for driving viewership.

Yeah. That’s another incremental 30-ish million people that are now betting on the NFL versus a couple of years ago.

That’s versus the 46 million from a couple of years ago.

That’s a lot more people who now care a lot more about what’s happening on Sundays and Mondays and Thursdays. Isn’t it funny that if something is illegal but people really want to do it, they do it? But then if you make it legal, a lot more people do it.

Sort of like a lot of people use Napster, but then when you let people buy songs on iTunes, easy beats free: a hell of a lot more people started actually buying music than had ever pirated it.

Yep.

Let’s actually quantify it. The estimates are that the NFL’s gambling-related sponsorships are about $200 million a year between DraftKings, FanDuel, and Caesars. And then there are these companies that they don’t have a partnership with, but that obviously drive a ton of interest, with Polymarket and Kalshi, these prediction markets that have popped up.

So you might say, “Oh, $200 million a year, that’s nothing compared to the NFL’s topline revenue.” But Nielsen estimated the indirect impact on the league—in every way that it helps the flywheel—to be about $2.3 billion per year, which is what the league benefits from through the legalization of sports betting.

That’s basically another Sunday Ticket package on top of the existing revenue streams.

Each of the packages is in the $2 billion neighborhood. So that’s exactly right.

When we’re talking about revenue, it just grew even more than they expected. When we did the episode, I think we said something about $18 billion a year. The league now does over $23 billion per year across all teams. That’s on track to surpass $25 billion, which was their goal by 2027. They’re going to easily beat this number.

I thought when we were recording, “Wow, by 2027, they really think they’re going to surpass $25 billion.” But if they’re already at $23 billion, yeah, they’ll beat it easily. The wild thing is Roger Goodell made that estimate in 2010. Revenue was only $8 billion then.

I think the takeaway is the league is extremely good at predicting what this revenue is going to look like. And because of the structure that we’ve talked about all episode, with the way that the salary cap and the TV deals interplay and the length of the TV deals, it’s just extremely knowable what the future of the league looks like.

Also, we should say, too, that is a superlative management performance to set a target like that and hit it.

Yeah.

Purely as a business management team, the owners collectively, Roger Goodell, and the office of the NFL have delivered a superlative management performance.

Yeah. They’re good at their job.

They’re very good at their jobs.

So, before I throw it over to you, I want to talk about streaming because we alluded to that. It has become much more prominent as a strategy for the NFL and as a way to consume games, and it has gone much better than we expected. We were sort of pooh-poohing the Amazon Prime partnership and saying, “Oh, they weren't hitting targets and they had to do make-goods.”

No more of those.

That's not happening anymore. In the 2025 season, Thursday Night Football on Prime averaged 15.33 million viewers, the highest-ever average for Thursday night games across its 20-year history. That's still slightly underperforming the average game viewership throughout the season, but it's Thursday night and it's only available via streaming.

Yeah. Compared to Thursday nights on the NFL Network back in the day, which we'll get into in a second, it's a big increase.

Plus, we had a century of training people that you watch football on Sundays and you watch it on a broadcast network. The fact that we're already close to parity with this completely different channel is wild. 122 million unique people watch Thursday Night Football. That's up 50 million people since 2022.

The Black Friday game on Prime was up 21% year over year. And probably the biggest sign either that it's working, or part of the reason it's working, is that Thursday night actually has great games now. I don't think I've missed a Thursday night all season.

Yeah, same.

There was the YouTube-exclusive game that we alluded to. This is just a very interesting prediction for the future. It was Week 1, their international game, and it was exclusively available on YouTube globally.

Yeah. The big thing here is that YouTube is an expansion opportunity for the NFL. It's the way to reach a global audience, and that is the NFL's ability to expand. We talked about how they've saturated America, so it's all these new eyeballs in exactly the markets where they're trying to expand to. It's different demographics, especially younger.

And again, David, your comment on the big bet to put it free in front of the paywall—that's sort of a tenet of the NFL: if you are a fan of a team, then you should be able to watch all of their games for free the entire year. But this is even one step further, which is that everyone in any market can watch this game for free, which is very different from how they approach most of their media rights.

Yeah. If the NFL can figure this out together with YouTube and then also Netflix, now they have the Christmas games with Netflix. Netflix is also a global streaming platform. That makes everything else look quaint. Fox or CBS in America—how many households is that going to? 100, 120, 130. How many users does YouTube have? A couple billion. That is a massive unlock.

Yep. And Netflix just announced they have 325 million paying subscribers.

Right. But if they can figure out YouTube globally, and Netflix of course will be part of that too, you can understand why they have been steadfast in investing internationally and investing in technology.

Yes. Isn't it crazy to think that the growth governor for the NFL was the reach of the national television networks?

Yes. That's the thing holding them back from having more of an addressable audience. Now, with these tech platforms, you actually do have a globally addressable audience—one single platform that aggregates all these people from all these different places—and you can distribute your content wider. But I keep going back to the saturation point. It's nuts that CBS and NBC's reach was the problem with the NFL's growth targets.

Right. Amazing. So, lastly, you mentioned Netflix. The Netflix Christmas games averaged 30 million people.

Oh, wow. Yeah. That's significantly larger than an average game on network TV.

Yeah. The 18 million figure. The NFL completely overtook the NBA to be the Christmas tradition.

Right. The NBA's got a new big media rights deal. Nobody should shed a tear for them.

Yes. Well, speaking of networks and media rights, one thing that we touched on briefly in the episode was that the NFL owned and operated its own cable network.

Curiously, for a while, sort of counter to their strategy.

Yeah, a little bit of strategy conflict there. It looks like that strategy conflict is going to be resolved in a huge way for the NFL. In August 2025, the NFL reached a deal with Disney and ESPN to essentially sell the NFL Network, the NFL's cable network, and the NFL's official fantasy app to ESPN for a 10% equity stake in all of ESPN in return for this swap.

This is awesome for all sides, assuming this deal goes through. It's in regulatory review right now. And the strategy that they have with everything else is just so genius: we don't have to bear the operational costs of producing the games. I saw an estimate that, over the course of a season, a broadcaster spends over $400 million rolling out cameras, paying cameramen, and covering production trucks and everything. It is funny that the NFL got into that business a little bit and built out a TV studio and had commentators.

I think this deal is awesome, assuming it goes through. The NFL, like we're saying, realized they don't really want to be in the business of operating a linear TV channel. This is just pure, nonstrategic overhead cost that they're offloading.

Similarly, though, it's not like Disney and ESPN are just taking this off their hands as a favor. They also know that they need to shift out of the linear cable TV business. The timing of this coincided right with launching the full ESPN direct-to-consumer, over-the-top streaming service, ESPN Unlimited.

For people who don't know, there used to be—or there is—a thing called ESPN+, which was basically ESPN Minus.

Yeah, it was a neutered version of ESPN.

It's like all the ESPN stuff except the stuff you want to watch, because you need to subscribe to a cable bundle for that. We make so much freaking money on the cable bundle that we're not going to give it to you direct. No SportsCenter, no live NFL games, blah blah blah. No Monday Night Football.

And now they have actual ESPN that you can get over the top in a streaming app.

Yeah. So this is now a whole dump of all of the NFL media rights for some games, but also all of this ancillary content and NFL Films content, right? Disney is now going out and making the pitch to consumers: “Hey, in addition to Disney+ and Hulu, also subscribe to ESPN Unlimited—your new digital streaming cable bundle, essentially.”

Yep. Now, here's where it gets really interesting for the NFL. Already, their rights partners were moving to much more of a tech-company digital mix than cable networks and broadcast networks, with Google, Netflix, Amazon, and so on. In doing this deal, they're now essentially helping stand up another digital bidder for future media rights with this new ESPN standalone streaming service.

It is vastly in the NFL's interest for a standalone digital ESPN streaming service to be viable and then also be a bidder on their future media rights. So, they're helping make sure that happens. And they're getting a 10% equity stake in the whole thing, too. This is a great deal.

It is a great deal. Giving a 10% ownership stake of ESPN to one sports league really does establish how important the NFL is to ESPN.

And to be clear, it's not like the NFL is just getting a 10% stake in the new ESPN streaming service. They're getting a 10% stake in ESPN, the whole thing.

Yeah. Fascinating deal. Some other things I wanted to follow up on: we made some pretty hefty points around Gen Z and their love for the NBA and how the NFL doesn't really hold a candle to it. This is really messy data. I realize the only real way to do this is to ask Amazon. They stream the NBA, they stream the NFL, and they have logged-in accounts where they know people's demographic information. That would be the real way to answer this question.

But I do kind of want to walk back some of my concerns about the NFL's future because Gen Z likes the NBA more. I think the data is just actually not that clear on that.

Yep.

And we also talked a lot, even outside of Gen Z, just about the rise of the NBA in popularity and fame and all that stuff. If you just look at the numbers, the Super Bowl draws 127 million viewers, and that is growing. The NBA Finals per game draws just 10 million viewers, down from its peak of 25 to 30 million during the Michael Jordan era in the '90s.

Wow. And if you look at viewership during the regular season, that tells a similar story. We threw out the 18 million number for the NFL per game. Even the NBA's national broadcasts—not just the regional sports networks, but the national ones on ESPN and TNT—average 1 to 2 million fans. This is everything we talked about in the episode. The NFL is the most perfectly designed league, maybe with the exception of the IPL, now that we've done that.

That's right.

The most perfectly designed American league for a media product.

Listeners, even if you don't care about cricket, if you like thinking about the design of sports leagues, that episode was very fun to do.

Very fun. But that said, even now, a couple of years later, and even after the Taylor Swift crossover, the social media gap between players in the NFL and players in the NBA absolutely still persists.

So, I believe Travis Kelce is, for now, the active NFL player with the highest number of Instagram followers these days.

He has just under 8 million followers on Instagram. Patrick Mahomes has 6.5 million. Tom Brady has 15 million. Obviously, he's retired. LeBron James has 157 million Instagram followers. And it's not just LeBron: Steph Curry has 60 million. There are a bunch of NBA players with 20 to 30 million. You can debate the value of all this, but it's wild that number one in the NFL is under 8 million, while number one in the NBA is at 157 million and number two is at 60 million.

Yes. The difference is staggering. I bet this is true when you look at follower counts, but if you think about it a different way—how much social media stuff do I get about the NFL versus the NBA? Most of the time, when you follow LeBron, it's not like he's putting up game footage 3 times a day. You're watching highlights, but I bet if you try to look at football content on social media versus basketball content on social media, it becomes clear that the follower counts are more due to celebrity status versus engagement around the game.

That's what I was going to say. Back when we originally made this episode, I think these numbers and the difference mattered a lot more. These days, whatever inning we're in with social media, we've shifted away from follower counts and more toward algorithms and more TikTokification of everything. So, yeah, I think pure follower counts are not a great measure. I think also, an unmeasurable thing is just cultural relevance. To me, it feels undeniable that the NFL's cultural relevance has grown a lot in the last few years.

Well, yes. And a thing that's extremely measurable is how much money people make, using that as a proxy. We were sort of ripping on the fact that LeBron makes $127 million a year in disclosed deals between his contract and all of his sponsorships, and no one in the NFL even comes close. That's just not true anymore. Patrick Mahomes is making $90 million annually, and about half of that is his Chiefs deal and about half of that is other endorsements: State Farm, Adidas, Oakley, Head & Shoulders, and equity ownership. And it's not just him, either. You've got Josh Allen at $75 million, Lamar Jackson, Joe Burrow, Aaron Rodgers. There are real comparable dollar amounts for sponsorships with these guys.

Even just to stick on Travis Kelce here for a minute, the New Heights podcast reportedly signed a $100 million-plus deal with Amazon. That's right there for one show. Forget everything else that Travis and Jason are doing, et cetera.

Yes. Exactly. I also just feel it in my life, too. My wife Jenny couldn't care less about football, but especially since Taylor and Travis, she knows whether Taylor's going to the games or not. She knows that Kyle Juszczyk is on the 49ers, and that his wife designed the jacket that Taylor wore to the playoffs last year. All of this might not be directly monetizable for the NFL, but it is growing the status and cultural relevance of the game.

All right. So, let's go to Taylor and Travis. I spent a long time really trying to find longitudinal, directly causal studies, data—anything—on this. The answer is very, very likely yes: there was a massive increase in NFL viewership, engagement, attention, and new fans from Taylor's effect on the NFL. But what we do know for sure is that there's heavy correlation on lots of little data points. So, here are a few of them, just to throw around at your next cocktail party.

I love that you did this, by the way. I was wondering how quantitative you would get with this.

So, in the first year of the relationship, September 2023 to September 2024, the NFL added 4 million female fans. The Chiefs were 3.4 million of those.

Wow. Okay. That is the Taylor effect right there.

Again, correlation, but—

Yeah, yeah, yeah. I'm not a statistician, but I think that's significant.

The biggest demographic, or subdemographic, of those 4 million is women under 35, which is a traditionally very weak demographic for the NFL. It's one of the few areas of the U.S. where they actually had room to expand. Another data point: Super Bowl 58 in February 2024 had a 24% increase in 18-to-24-year-old women and a 9% increase across all women. And then lastly, Clark Hunt, the owner of the Kansas City Chiefs, went on The Pat McAfee Show and said that before Taylor, the Chiefs fan base was about 50/50, male and female, which in itself is amazing.

That's surprising. Yeah. The league has just done a lot of work to make it a sort of family sport, a household sport. But post-Taylor, the fan base of the Chiefs is 57% women, 43% men.

Oh, that's amazing. And obviously, this is all really fun and is the ultimate crossover for us because we did our Taylor Swift episode on the business of Taylor Swift a couple of years ago. But having done our IPL episode last year, obviously we're not saying that the NFL strategy team designed or negotiated this relationship.

Right, right. But if you look at the IPL, this strategy was part of their plans from the very beginning, and it's how they made it a huge global sport and the biggest sport in India: make Bollywood an integral part of the product.

I'm sure the NFL has been watching that and has leaned into this opportunity in a way that they might not have a decade ago.

I'm fascinated that the NFL tried to take a hands-off approach at first, and the first couple broadcasts had a lot of heat for, “Stop showing Taylor Swift in the box,” so they sort of leaned away. But then the NFL definitely made a decision at some point that, okay, we trust this now. We're in on this. To me, that's one of the huge lessons from the IPL: the more culturally relevant you can make your sport and your league, the better it's going to be for everything, including and especially merchandise.

Yep. A thing that I paid zero attention to that was brought to my attention is the rise of flag football.

Yeah.

Have you seen any stats on this?

No, but I hear about it. So, it's the way that a lot of women get into the game, because girls actually play flag football now as kids, and they were never playing tackle football before. The NFL actually has leagues, or sponsors leagues, like local flag football leagues, where they all are named after NFL teams, and it's getting a lot more kids into the game, especially as tackle football sort of wanes in popularity due to the concussion risk and injury risk. So, from 2019 to 2023, tackle football decreased 5% for the youngest age group playing, but flag football increased by 16%.

This is, I believe, the fastest-growing youth sport in America. It's growing really fast internationally as well, which is the 30-year win for the NFL, because if kids are playing flag football in other countries, it's only a short number of years before we see a meaningful presence of NFL stars who are not from America, because they sort of grew up playing flag and then, when they hit 13, 14, 15, started playing tackle football. That's going to be huge for the international growth of the game.

Yeah, I mean, that feels like one of the last, if not the last, remaining big needle-moving pieces for the NFL. If you look at the NBA, if you look at MLB, if you look at Formula 1, if you look at the IPL, the fact that so many of the stars came from other countries and bring that fan base along with them is huge. And that has never happened in the NFL.

Yep. But we're a short number of years away from, I think, seeing a giant breakout star who started in flag football because it was a part of their school or YMCA program, from another country. Also, flag football is going to be in the Olympics.

Yeah. And the Pro Bowl has been flag football for the last several years, right?

Yep. Well, speaking of lower levels of football, we made a big deal early in the episode about the origins of American football being intertwined with this elite, rite-of-passage American collegiate experience. The NCAA is an absolute mess right now. You could not have made it more disorganized or done more of a disservice to their sport, their game, than the way this has all played out. If your goal is to pay the players, there are a thousand better ways to do it than the way it has actually played out.

Seriously. So, yeah, what actually happened? Okay, so, forever, college football—it was illegal to pay players because they were amateurs and they couldn't receive gifts or cars or endorsement deals or anything. Then there was a Supreme Court ruling a few years ago where name, image, and likeness became legal to monetize. What sort of ended up happening is that these booster groups popped up, with groups of—

Alumni or people with vested interests in the school.

Yes. They would pull money not through the school—completely different from the school—and they had organizations with funny-sounding names, LLCs, and websites that looked a lot like the school's colors, but weren't actually affiliated. And they would do these weird deals where they would tell the AD, the athletic director, or the coach of a team, “Hey, we've raised X money. Go tell that high school recruit that if that recruit plays for you, then we will do a private side deal with them to pay them money while they come and play for your team.”

So, you have this strange structure happening at the very same time that they created the transfer portal, which for a very long time, the college game had this rule where if you're going to change schools, you have to sit out for a year. So, it was a big penalty. You actually had people who were sort of loyal to their schools, who would play for their schools for 3 or 4 years before going to the NFL, who would sort of build a reputation with that alumni fan base. And with the transfer portal, every year, people just decide willy-nilly to enter it: “I'm going to go where I'm either going to make the most money or have the best shot at NFL draft prospects by getting more playing time.”

The interesting thing is that next year is when the schools will actually start being able to pay the players directly, and there’s a salary cap of sorts.

The reality is that right now, I think it’s all still too messy and in flux to definitively say what the impact of all this will be on the NFL. But to me, it’s just sort of the final formal nail in the coffin that football in America is the NFL these days, in a way that when the NFL was starting, football in America was the collegiate experience.

That’s interesting.

So, it’s now come full circle and fully flipped: the legitimate football league is the NFL, and the Wild West, illegitimate, who knows what’s going on, is the NCAA. It’s uncoordinated, everybody just acting in their own short-term best interest, including the schools—the way that the superconference realignment happened and the Pac-12 completely blew up. It’s just so sad to watch as someone that was, and is, a really big fan of college football.

One interesting take you and I both heard from separate people is that it’s actually been good for the NFL because now that players can make money in college, there’s not as much of an incentive to get thrust into the NFL before they’re ready. They can develop longer, mentally and physically, before coming to the NFL. So, we may have better rookie classes out of the draft in future years as you see more mature players coming out. Yeah, our teams can be more analytically confident in the draft choices that they’re making as a result of this. That said, it’s all still too chaotic right now to tell.

Yes. All right. So, our big ultimate thing here: team valuations have gone up way more than I would have predicted.

Yeah, it’s funny. We spent the whole original episode, and now this whole update section, talking about all the business drivers of the NFL, all the trends, and all the things that are going on that theoretically should increase the value of the league and its teams. And it’s ironic that probably the one really big, glaring area in the original episode that we didn’t cover at all was the dynamics of team ownership and, thus, collectively, in aggregate, league ownership of the NFL.

Now, this is actually probably good because this is also the single biggest thing that changed in the NFL since we made the original episode—

Right?

Okay. So, what has happened over the last couple of years? The NFL has long had a pretty strict code around team ownership. Other sports leagues have regulations, too, about who can own teams and what ownership groups can exist, et cetera, but the NFL has always had the strictest set of regulations around this. So, with the one grandfathered exception of the Green Bay Packers, which are a publicly owned nonprofit corporation—

Sort of.

Sort of except for them, every other team in the NFL must be controlled by a single principal owner who is a natural person and not a corporation. And that person and their family must have a minimum equity stake in their franchise of 30%. And that must be pure equity, funded with cash or by appreciation of the value of the ownership of the team by one person, one family. You are allowed to have debt in your capital structure, but the league imposes a ceiling. That ceiling is currently $800 million, with one exception.

Oh, they’ve denoted it as a number.

Yeah. Yeah. Yeah. It’s not a percentage because it’s debt. So, in your capital structure, you can have a maximum of $800 million of debt that you carry. You can have about twice that if you are buying a team. So, they let you double it in the process of purchasing to have more debt to finance the deal.

But obviously, still, double that to $1.6 billion. That’s not going to buy you a lot of an NFL team these days.

No. And we’ll get to the real numbers, but at most that’s probably a quarter of what a team would cost.

Maybe for the Bengals or somebody, you know, not for a real team.

No. No. The Bengals are great. Okay. So, the principal owner needs this 30% stake funded with cash. In addition to the principal owner, that person is allowed to have up to 24 other minority owners as part of their ownership group. But those 24 other people must be silent, with no operational control. And the way they actually structure this is hilarious: they structure it like an investment fund. It’s a GP/LP entity. So, the principal owner is the general partner, and then all the minority partners are limited partners.

Can they take fees and carry on their LPs, or is it a—

We’ll get back to that in a minute.

Okay. So, for a long time, this ownership structure and ownership code was actually, I think, a key part of making the NFL’s strategy work. It might have actually been the single biggest driver of this whole architecture that we’ve talked about all episode working.

Permanent capital, individually held by highly motivated, passionate individuals, not thinking like a pool of capital would.

Exactly. These are real, flesh-and-blood people, not corporations. They have enormous skin in the game. A huge portion of their family’s wealth is invested in the clubs. They run them personally. They make the decisions. They are effectively the CEOs of these organizations.

And you’re able to get all 32 of these people—or 31 plus the Packers—into a room a couple of times a year, and they can hash out and say, “Hey, these are the things—collective capitalism—these are the things we’re going to do that are going to be good for the league,” and put teams second, like negotiating central national media rights, et cetera, et cetera.

Yeah.

So, all of this worked great until the summer of 2023, when the Washington Commanders—formerly, until recently at that point, known as the Washington Redskins—stumbled into a distressed situation. We don’t need to get into all the details here, but most folks who are followers of the NFL probably know that then-principal team owner Dan Snyder, who had owned the team for almost a quarter century, essentially got brought down by a whole series of scandals. There was sexual harassment. There was workplace harassment. There were financial improprieties. There was the fact that he steadfastly refused to change the name of the team for, like, a decade, even after it was kind of untenable what the name was.

Yeah. You needed an ownership change, and suddenly you needed it fast.

Yeah. If you go to Dan Snyder’s Wikipedia page, it literally says on his Wikipedia page, “Snyder is widely considered to be one of the worst owners in the history of North American professional sports,” and has a whole train of citations after that.

This ultimately ends up in a 2021–23 U.S. congressional investigation into the Redskins/Commanders and Dan Snyder’s ownership of them. And at the end of 2022, as these investigations are ongoing, the rest of the owners in the NFL finally decide, “Enough. We need to kick this guy out of the league and force him to sell the team,” which they can do by the NFL’s bylaws. If there is a supermajority vote of at least 24 of the other principal team owners, they can force one of the other owners to divest the team.

Now, it doesn’t actually come down to a vote, but just by virtue of having that leverage in 2023, Snyder finally steps down, stops fighting, and says, “Okay, I will bow to the pressure and initiate a sale process here.” Well, the good news/bad news for the NFL is that because they’ve been so successful, and the Washington Football Team is a great franchise, with great stadium rights, et cetera—

Key market.

This is an extremely valuable asset. And so, yes, on the one hand, that’s great news. It’s validation of the NFL’s whole strategy for the past 100 years. On the other hand, they’ve kind of become hostages of their own success because of all those strict ownership rules that they have. They now need to come up with a new principal owner candidate who has enough liquid cash to cover an emergency purchase of at least 30% of the Washington football team.

And the most recent purchase was the year before—

When the Walton family bought the Broncos, I think, for $4.65 billion.

Yes. So, you already have this new, very high watermark, and you already found the family behind Walmart. So, like, okay, you need to keep going down your list of where can we find liquid, principal, family-owned capital.

So, just to put some numbers on this, the Commanders ultimately sell for just north of $6 billion. So, the minimum required cash-equity check here is at least $1.8 billion. You need somebody who just has that liquidity lying around, that they could, in a fast process, invest in an NFL team, and, oh yeah, they also have to fit the Venn diagram of wanting to own an NFL team based in Washington, D.C. This is not a large pool of buyers here.

So, ultimately, they do find a buyer, Josh Harris, who is the co-founder of the huge private-equity firm Apollo and already owned the Philadelphia 76ers in the NBA and the New Jersey Devils in the NHL. He comes in as the principal owner of the new ownership group of the Washington football franchise, along with 20 other limited partners, because, oh yeah, that’s the other problem here. You also need this person to have enough friends who are willing to throw in and who can cough up another $3–4 billion in cash here because, yes, there’s the $1.5 billion in debt, but that still means you need $4.5 billion in cash.

So, it’s kind of a miracle that this all happens. It started impacting the game, too. Because this is all during the offseason that this is going down, what’s going to happen to the Commanders? Are they going to continue operations? It’s crazy.

Uncertainty is not good for the league.

No, definitely not.

They forecast revenue 15 years in advance.

Yes.

So once all the dust settles, the owners are like, “All right, we can never have this happen again. We know we need to change something here.” So, in the next offseason, in the summer of 2024, they vote to allow private equity into the NFL.

Basically, all the other major sports leagues around the world had already done this, and the NFL was the last holdout. Again, you can understand why: having these strong principal owners who can all get in a room and negotiate, think long term, and have a huge part of their family’s net worth be the team—it all makes sense.

Yeah, it all makes sense.

But private equity desperately wants to get in. More than ever, you now need private equity’s money. But the NFL still has leverage. It’s still the cream-of-the-crop thing to own, and they’ve watched private equity go wrong in all these other sports leagues.

So this is where the NFL proves once again that they truly are N of 1. They meet with a bunch of private equity firms, talk among the ownership group, and hammer out a new set of ownership regulations for NFL teams. Here are the 4 major rules that they came up with.

Number one: the NFL will approve a set list of private equity firms—large private equity firms that have the opportunity, the option, and the ability to invest in league franchises. That list is vetted by the NFL, subject to change, and if you are not on that list, you are not allowed in. That set of firms right now is only 4 very large private equity firms that have the anointed ability to invest in NFL teams.

Number two: those private equity firms are now allowed to own up to 10% of the equity in NFL franchises, but no more than 10% under any circumstances. That is the smallest cap of any major sports league out there, if they have caps at all on private equity ownership.

Number three: these private equity firms will be fully silent limited partners in the ownership group, with no control and no rights. Pari passu—exactly the same, effectively, as all of the previous individual limited partners in the ownership groups. If you’re a random movie star who happens to own a little tiny bit of a team, you have the same rights as a private equity firm that owns 10%.

Yep. You have the same rights as Ares Management or Sixth Street or Carlyle or, you know, the small set of firms.

And then number four—this is the kicker. Upon any eventual sale or monetization of the ownership stake that private equity would have in an NFL franchise, a portion of the returns on that investment gets skimmed off the top, goes back to the NFL, and then gets distributed equally among all 32 NFL team ownership groups.

This is wild.

So, you texted me this, and I couldn’t believe it. But suddenly everything makes sense.

Yes.

That’s why there’s an anointed set of 4. It’s not just that there are only 4 private equity firms we trust. It’s that there are 4 private equity firms that we went and did a deal with, where if they buy into our league, we effectively get carry on their investment because when they sell, we get some of the profits.

It’s funny you asked about carry and the ownership structures. I don’t know mechanically and legally how this actually works, but in practice, this is exactly what it is. The NFL invented a way to charge carry on investor ownership of franchises in the league. It feels like the ultimate pinnacle of the collective-capitalism mindset and ethos of the NFL.

One interesting way to look at this is that it is the NFL pulling yet another lever at its disposal to achieve competitive parity. The league is using the fact that private equity firms desperately want to be in as a way to redistribute the wealth from increases in these incredibly high-value teams that private equity is buying into and distribute that out to all of the other 31 owners.

Yes, exactly. That’s what I was going to say. I think this was one of the big sticking points that emerged in the owner meetings as they were contemplating how to do this, which is that only a subset of the teams are going to avail themselves of the private equity option, either through sales of the franchises or through minority-stake investments, which have been happening a lot.

Right? If you do that, we all get paid, right?

But it would have created an imbalance, right? Some subset of the teams would have embraced private equity, gotten these big liquidity stakes, and had their valuations reset, while the other set of teams hadn’t, for whatever reason. Maybe the family wants to keep 100% or near-100% ownership. This is just brilliant.

Yeah. So, quick, interesting math: as of today, Forbes estimates the average team is worth $7.1 billion, up from $4.5 billion when we did the team-valuation episode. Team valuations are now $228 billion in total, up from $140 billion when we recorded the episode. That’s up 62%.

Again, these are estimates because these are mostly not liquid assets, but it’s interesting to know that.

Well, it’s funny you say “mostly not liquid assets.” A large number of them have become liquid assets.

They have opened up sales to minority owners. What’s basically happened is that there have been no full-team sales since the Commanders transaction that precipitated all of this. But a large number of teams have used this as a way, either with private equity or, interestingly, more often without private equity—usually with family offices—to sell minority stakes in the franchises and get liquidity for the ownership group.

But private equity being able to buy in, since they’re a bidder, drives up the valuation. So even though they’re opening up sales to all these individual people—

The prices are set by institutional capital. The Dolphins, Bills, Chargers, Giants, Eagles, 49ers, Raiders, Browns, and Patriots have all sold minority stakes over the last, call it, 2 years, and all at much higher valuations than they would have had if this had not happened.

I also heard from some wealth managers who advise people buying into teams that they are allocating this to people’s fixed-income portfolios.

Wow. Buying into an NFL team—you almost treat it like an annuity.

An annuity. Yeah. I just know that it’s going to spin off this much cash each year, and it’s like buying a bond.

I mean, everything we’ve talked about in this update has basically been an extremely positive development for the NFL and its business. But nothing we talked about until now would have caused 60% asset-value appreciation in 3 years except for this.

Oh, multiple expansion is crazy. Forbes now estimates the average revenue multiple in the NFL is 10.7x, which is up from 9x in 2024 and 6.4x 5 years ago. So in 5 years, it went from 6.4x to 10.7x.

It’s funny how supply and demand will do that.

Investors either think there’s much more durability and growth in these franchises than they did before, or they just don’t care and want to own a scarce asset. The NFL ownership group had so constrained the buyer and investor market before, to such a tiny, narrow window, that buyers and investors actually had a lot of leverage. This has opened that window much, much wider.

It is funny to do the quick math on what the carry is on the carry-type thing. At a 10% stake of a team that’s worth $8 billion or so, you’re putting up $800 million as a private equity firm. Let’s say that goes up 30% before you exit your position. That’s a gain of $240 million.

I have no idea what the spiff or the carry is. Let’s assume it’s 10%. I don’t know if that’s conservative or not, but it’s less than 20%. That 10% would be $24 million that the rest of the owners just get for free, as a little thank-you for letting private equity participate in our league.

In the context of the revenue of the NFL, that’s not a lot. But that’s just for a transaction around an individual team. Collectively, the transaction potential is 32 of those.

Right.

So my last comment on valuations and how each of these teams are doing as businesses gives you a couple of other data points. Forbes now estimates the Cowboys are worth $13 billion. The Cowboys are the high-water mark because they have an exceptional amount of local revenue—the revenue that they produce.

As we mentioned earlier in the episode, the estimated 2024 revenue of the Cowboys was $1.2 billion, while posting operating income of $630 million.

That’s actually a reasonable valuation. You’re talking about 10x revenue and 20x operating income.

But to my point on the disparity here between the most thriving team and the least thriving, sure, the Cowboys can spin off $630 million in profit. The average team spins off $127 million in profit, and the least profitable team only generates $21 million in profit.

So, a couple of points here. One, NFL teams are now just always reliably profitable businesses. That’s not true in most sports, and it wasn’t true in the NFL’s history. But if you own an NFL team, you are going to get—I believe you get—a dividend check every year, since they’re cash-generative.

But two, this league-first mentality is going to be really tested in the coming years with these enormously profitable teams at the top and these teams at the bottom. I mean, $21 million really illustrates why a $24 million payday coming from private equity—every individual million that you stack on top of that $21 million—is very impactful to your profitability as a business overall.

So even though valuations have become stratospheric and the NFL is a better business than ever, the team disparity, especially on the bottom-line side, continues to concern me.

That remains the bear case for the NFL going forward.

Yep.

All that said, for the moment at least, communist capitalism is alive and well in the NFL.

Yes. And the answer to the question we had 3 years ago—could the NFL grow from here?—is resoundingly abso-freaking-lutely.

Yeah. If by asset value, if nothing else.

Yep. And that is a great place to leave it. Well, we have some thank-yous, especially to folks who helped us with the follow-up research. My biggest one goes to Jeff Dunn, the chief strategy officer of the Seattle Seahawks, who I spent a good amount of time with prepping for this, especially while we're here on our playoff run. We are recording this right ahead of the NFC Championship. So, sorry.

Well, my thank-yous are to all of our many friends in the 49ers organization, whom, sadly, I felt less bad about emailing this week after your Seahawks. Yeah, they had some free time. Yeah, yeah, yeah—they knocked us out of the playoffs last week.

They're great. Every single person we've worked with at the 49ers, talked to to help prep, and just gotten to know over the last few years has been great.

They've been immensely helpful and become good friends.

And we also have them to thank for helping bring Super Bowl 60 back to the Bay Area, launching the Super Bowl Innovation Summit, and having us be part of it. I know it's funny that we talked about the whole creation of Super Bowl Media Week as this big innovation and all the gloss and sheen that it adds to the game, and now we get to be part of the gloss and—

Acquired as part of the gloss and sheen. If you had told us that 3 years ago, I don't know what we would have said.

Absolutely not.